WaMu shareholders force meeting

WaMu shareholders have apparently been able to force a shareholders meeting and hope to change the direction that bankruptcy is currently taking:

Washington Mutual shareholders have won a battle to force the bankrupt thrift to hold a shareholder’s meeting. With the victory, WaMu shareholders can potentially unseat the majority of company’s board of directors and, in so doing, upend the trajectory of the case. Washington Mutual last held an annual shareholders meeting in April 2008.

(From here and more here.)

Chase’s ATM use fee language

You’ve got to love this story, which add more fuel to the feeling most people have these days that banks are just looking to cheat customers with all the small print and unclear language.

Chase says this about using non-Chase ATMs: “$2 each for any non-Chase ATM withdrawal, balance inquiry or transfer. $3 per ATM withdrawal outside the U.S.” You might think that means it costs $2 in the U.S., and $3 outside. You’d be wrong.

Now, a reasonable business would strive to clearly communicate its policies, both to reduce the amount of customer service expense required to deal with customers calling up to ask what gives, and to create a positive rapport with their customers.  That clearly isn’t what is going on here.

Chase does away with courtesy late fee waiver

According to this story, Chase has officially decided to stop waiving any late fees as a courtesy to loyal and good customers.

When I had forgotten to make my payment this last month, I went online and made the payment and saw that there was a late fee of $39.00. I called Chase and spoke to a representative who refused to waive the late fee, stating that the company has decided not to waive late fees as a courtesy from now on. I asked for a supervisor and she told me she was an account manager and that no matter who I talked to, the fee would not be waived.

Asking to have a late fee waived is not an unreasonable request.  Even the most organized of people will occasionally slip-up and when a bank can accommodate that, it’s called good customer service.

This fits in nicely with my theory on Chase not really wanting retail banking customers (just their money).

More evidence that Chase doesn’t want customers, just their money

Take a look at the rates for Chase’s freedom card.  Sure, you get 0% for a year, but after that, customers with perfect credit get a 13.24% rate, customers with good credit get a 17.24% rate, and customers with poor credit get a 22.24% rate.

Loan mod not working, try David Lowman

David Lowman is the CEO of home lending at JP Morgan Chase.  During recent testimony before the House Committee on Financial Services, in response to questions about what people could do if there weren’t getting help with problems like, being in a loan modification program but still getting collection letters, he told the committee that people should come to him for help.

As the video link above shows, he literally got mobbed after making that statement.  Anyone with problems should take him up on his offer and try to contact him for help.

Chase and lending to the military

Not sure what the status is today, but back in 2005, Chase got in hot water for apparently blatantly ignoring the laws that control lending to military personnel; in particular, they were accused of charging higher than allowed interest rates for people on active duty.

The growing headwinds against bad bank customer service

It’s one thing for people to complain amongst themselves.  It is another thing for people to complain on the internet where anyone can read it.  But when journalists start writing their columns around bad bank customer service, like this recent article in my local daily print only paper, it makes me wonder if the contempt of retail banking by the public is reaching the point where Congress will start to notice and propose even more legislation to keep them in line.  Chase is one of the chief culprits in the article.  Among the authors complaints:

  • Being overly marketed to by bank employees
  • Pathetically low interest rate on what Chase calls a “high yield” savings account (0.045%)
  • Taking way too many people and way too many days to answer a simple question
  • Fees that are “accidentally” and inappropriately applied

In the end the author concludes that banks have lost their fiduciary morality.  I would go as far to say that banks want our capital without the hassle of actually having us as customers anymore.  Perhaps banks simply see customers like a factory farm dairy sees cows, and we see how well that has worked out for the cows (not well).

What is the solution?  Well, for one, find yourself a bank that does actually want to be in retail banking.  You are most likely to find this at a smaller bank such as a credit union or community bank.  Second, when your bank does something ridiculous and inappropriate, hold them accountable, even for the smallest infraction.  If enough people did this, banks simply would find it unprofitable to try and cheat us in all the ways they do.

Why does Chase want banking customers?

The way Chase treats its retail banking customers makes me think they don’t really want them.  In particular, in light of the fact that banking customers are a drain on profits lately and all the banks profits come from their trading and investment banking operations, why do they continue to run a retail bank and why in particular was Chase interested in Washington Mutual?

Why indeed?  Because of banking capital requirements.  Chase’s ability to make money depends on its capital, capital that it can leverage many times over to trade on its own behalf to make money.  Hybrid investment/retail banks today make a lot of money trading on their own account, and capital is a very necessary part of this.  Retail banking in particular is a cheap way to get capital that they can then use in their other operations, and when those operations become unhealthy, as they did for most banks in 2007-2009, they needed more capital to meet minimum required capital levels and to appear healthy.

So, Chase customers, you are really only there because Chase needs your money, not because Chase wants a banking customer.

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