So long WaMu. I’m done with you. (For those of you ready to join me, and not interested in the story, jump to my escape plan.)
The last straw was two month’s statements closing with a missing $18. I still use paper statements and checks for my banking, and balance my checkbook every month—like my grandfather taught me. For similarly cautious reasons, when WaMu collapsed and was seized by the FDIC, I printed out a current statement from online and suggested you do the same. I’m still getting ridicule for this. Bankers seem to think anyone foolish enough to mistrust their honesty or competence are fools. Digging after my missing $18, Chase finally fessed up to a ‘service charge’ on my formerly free checking. My account predated the current WaMu free checking program. Upon the transfer over to Chase, it became a $1500 minimum account. Chase quietly started pocketing money from my account. I caught them. I’m done.
Chase’s business strategy for years—to the extent the financial industry has any strategy at all beyond ultra-short-term greed—has been to fee the shit out of their retail banking customers. Failing at the idiotically simple task of lending at slightly higher interest rate then they pay to their depositors, all of the remaining superbanks are resorting to ever higher and pettier fees to return to profitability, while still reliant upon public funds to operate. It’s sociopathic; as for-profit businesses, they must be sociopathic. What’s going on here are the banks are switching from being incompetent sociopaths to competent sociopaths. Their stocks have been rising on the good news.
Back when I was still living in Baltimore, I left (what was First National when I joined, then Allfirst, and then finally became) Bank of America after a similar pocketing of cash. Bank of America cashed a check I had deposited in their ATM, but failed to credit my account. Faced with the canceled check, with my account number and name clearly on the front and back and the Allfirst stamp indicating they had cashed the check, they refused to credit my account. I demanded all my money and walked right across the hall to the Johns Hopkins Federal Credit Union. Bank of America’s latest innovation in screwing over customers is something called balance chasing. It’s a brilliant way to take advantage of the newly draconian consumer bankruptcy bill and make a qick profit from the total downfall of people who otherwise would be likely to make it. Nice work, boys! Short term private profit at the cost of long term public debt.
In my opinion—and as many note time and time again, I’m a biologist not an economist or financial adviser. Take my thoughts seriously or as advice at your own peril—anyone still doing retail banking at one of the huge, bailout dependent banks, is a sucker. The banks think you’re a sucker, and are rapidly proliferating the ways they can separate you from whatever meager savings and financial security you can muster. Leave them.
Yes, all of these banks are FDIC insured. And the FDIC is amazingly competent at what it does. Staying with one of these failed banks is like getting into a car of a totally drunk friend because he has insurance “and dude, it’ll cover whatever medical costs of anyone I hurt would have to pay.”
Why do we need banks? The multiplier effect. For every dollar you deposit in your bank, the bank is legally allowed to lend out several dollars. Those lent dollars allow people to buy cars, homes or other stuff now. These spent dollars can, in turn, be saved or spent again. With a bank, your dollar allows the economy to grow and expand. A bank’s biggest societal benefit is to lend money wisely; it’s the task these huge banks have proven totally incapable of.
So, if you’re ready to leave the big banks, there’s an obvious place to go: Credit Unions. Like banks, you can deposit, write checks and even earn a bit of interest for lending your money. And like banks, credit unions give out loans—typically carefully vetted mortgages and auto loans. Credit unions have their own Federally-backed insurance system, very much like the FDIC, called the NCUA. The biggest difference between credit unions and banks? Credit unions are non-profit. A credit union has all the societal benefits of a bank with none of the sociopathy. A winner.
A Chase exec will tell you “all this hippy non-profit shit sounds great now, but what are you going to do when you need an ATM and your little crappy credit union, with only one branch, is across town?” Credit unions have banded together, allowing members of one to use the ATMs and even the branches of others.
1. I opened an account at the Boeing Employee Credit Union. The ATM card works for free at the Group Health Co-op credit union, WSECU and BECU ATMs right next to my house and workplaces.
2. For when I just need an ATM, I opened a Schwab high-yield saving account. Schwab, for now, will pay any ATM fee for withdrawals at any ATM. WaMu ATMs. Chase ATMs. Shitty high fee ATM at the corner store. Any.
It took a month for my last WaMu checks to clear and now I’m done and about to get the cashier’s check for the rest of my remaining balance. It’s working. I couldn’t be happier going back to not worrying about my bank. You might want to join me.
Updated:
Just be clear, as I’ve gotten a few concerned emails, these mystery fees showed up on the detailed, end of month, printed balance sheet and online a few days after they were assessed. But only as a “service fee” with no details of why I was charged. I caught the discrepancy when I noticed an ATM balance of my account was off. The discovery of this $1500 minimum took a few calls and messages.
I also love using QuickenOnline or Mint.com to keep track of all of my spending, and discover fees before the end of the month.
For credit card holders, particularly with Chase or Bank of America, watch out for a sudden decrease in your grace period (the time they give you to pay off your balance in full if you don’t want a finance charge.) The banks are looking for a way to gouge people who rigorously avoid finance fees. Discover has never fucked with me in this way.
Jonathan,
Its time to do another dear science podcast, and keep doing them regularly, we need that dorky chic voice.
We just opened our Chase Bank-affiliated credit card bill today and found a $39 late fee plus $6 in finance charges because our last payment was “late.” I mailed the payment to them on 3/22 and they didn’t process it until 4/8. When I called about this, I was essentially told that since there is a recession on, they don’t “forgive” any of their fees anymore.
I said, “But this was probably your fault — it certainly wasn’t MY fault,” and she just got really snarky and essentially told me tough shit; if I didn’t want to risk late fees, I should pay electronically or take my payment into a WaMu branch. I told her to close my account, and she did so happily, despite the fact we’ve been great customers for years now (never had a late payment before, always paid the balance in full). Apparently, Chase would rather lose ALL our business than forgive an erroneous $39 late fee.
Great business model. Good luck with that one!
I’m making my husband close his WaMu/Chase bank account on Monday. After reading this Slog post, it wouldn’t surprise me at all if Chase charged me that fee not because my payment was late but because they wanted to see if they could get away with it. We’ll be checking our bank account balances closely for other mysterious fees. Asshats.
Chase bought my mortgage 5 years ago, and I have to say that I’ve been happy w/their customer service, so I wasn’t that alarmed when they took over WaMu.
That was then. Now my 2 “totally free” checking accounts each have a 15.00 monthly fee, and the interest on my Wamu (now Chase) Mastercard jumped 8 percentage points for absolutely no reason. I called to see if there was anything that could be done about the interest increase, and the woman on the phone was super rude. So I got a 0% balance transfer to a Discover Card (even w/ the fees, it’ll be better than the extortion, and I’m going to switch over to BECU.
If you have a credit card w/Chase, read your bill carefully. I had no idea about the interest bump. Nasty, nasty surprise.
Gawd, and don’t get me started on Wamu’s overdraft fees for debit cards. I had money in savings, but overdrew my checking. I thought (silly me) that the accounts were automatically linked as they had been at my bank. No. I had 7 overdrafts a day for 2 days before I realized what was happening. Latte at Starbucks? That’ll be 38.00, counting the fees. You get the idea. Each overdraft fee was ten times the amount of the overdraft.
Why, oh why, is there no alert when you use a debit card on an overdrawn account? If I’d been asked “Do you *really* want to spend $37.00 on a quart of milk?” I know what my answer would’ve been.
@54 and everyone:
Bank fees for such things as overdrafts and out-of-system ATM’s represent a huge portion of bank revenues. Quotes from Center for Responsible Lending:
“In a system enormously out of balance, fees for abusive overdraft loans have reach $17.5 billion per year, more than the loans themselves, which now amount to $15.8 billion per year.”
“Common banking practices increase the number of overdrafts, practices like clearing high-dollar debits before subtracting smaller debit amounts, holding deposits longer than necessary, and failing to decline overdrafts or warn customers at the checkout or ATM if they have insufficient funds. Most banks gave these warnings in the past, and customers want them and would most often decline transactions that were not covered if given proper warning”
See entire article here:
http://www.responsiblelending.org/issues…
The good news is there is legislation pending before Congress to put an end to this unconscionable customer manipulation and abuse:
“On March 12, 2009, Representative Carolyn Maloney, Chairwoman of the Financial Institutions Subcommittee (D-NY), and Representatives Ackerman, Miller of North Carolina, Ellison, Speier, Tierney, and Eshoo introduced legislation [H.R. 1456] to protect consumers from abusive overdraft loan programs and stop financial institutions from deliberately manipulating their systems to generate more overdrafts—while preserving the institutions’ ability to cover occasional overdrafts as a courtesy without triggering the Act’s requirements. The Act would:
(1) Amend the Truth in Lending Act to clarify that overdraft fees are finance charges, so that annual interest rates are reported. Consumers would then be able to compare the cost of overdraft loans with the cost of other credit options.
(2) Require written consent before enrollment in the overdraft loan program.
(3) Require financial institutions to warn the customer when an ATM withdrawal will trigger a fee—and allow the customer to cancel the transaction at that time.
(4) Prohibit financial institutions from manipulating the order of check clearing to increase customers’ overdraft loan fees.”
More info here:
http://www.responsiblelending.org/issues…
Want to save some money? Write or call your representitives and support this bill.
@55: Thank you. That’s very informative.
So, Jonathan, the March 21 article from the Washington Post entitled “Two Big Credit Unions Seized; US Moves as Losses Threaten Entire Network” didn’t give you pause? As a credit union depositor, it sure gave me pause. Here’s the whole story: http://tinyurl.com/c5v9e6
It’s amazing: we have a thread where EVERYONE is agreeing and it’s because EVERYONE has issues with the American banking system…apparently, solidarity comes with mutual hatred of corrupt capitalistic institutions running amuck.
@50 Thanks for the input on Homestreet. They seem like a good possible option, but it is always so hard to tell without hearing from anyone who knows anything about them.
BECU is at QFC on Bwy. and Safeway at 23rd and Madison – great org.
CHEAP loan rates if you need to borrow.
Wa Mutual is messed to the max. My story, I have no accounts at WaMU – but cashed a ck from a friend to pay back a 300.00 loan. Some sort of problem and now they call me to give back the money, cause his account was messed up and the check should not have been cashed.
True. My response is very direct, you cashed it, you own it. Hang up. Three calls in the past four months, at my job. Apparently from the endorsement.
Apparently they sold all these “problems” to some butt wipe collection place … not my problem at all.
Credit Unions rock.
The first mention of JP Morgan getting involved with WAMU I marched over and canceled my account, I knew this was going to happen. WAMU was a fucking awesome bank, I know a manager at a branch and she didn’t hate her job anywhere near as much as she despises it now, when JP Morgan came in they screwed everyone over and no one gets to have any fun anymore. It’s seriously one of the world’s worst companies ever, I wouldn’t trust it with a dime.
I started with Wells Fargo and I’ve been ‘stuck’ with them due to some poor decisions when I was a teenager (now resolved) and my auto loan. BECU won’t take my auto loan because the car is over 100k miles (106k fuck) but their bill pay system seems 100% free so far and I can just send money over to it, no need to keep anything with wells fargo anymore. I really wish I would have done this when I started, I could have had a savings. My only advise to anyone is in this article, go with a credit union over a bank, you won’t regret it.
BECU and WASECU branches in the U Dist, SECUWA branch just down the hill from Capitol Hill next to REI.
Tons of ATMs everywhere to take out your money – free.
@55 – Thanks for the link. It’s nice to see someone actually admitting it’s a problem. My credit union completely screwed me over with this – at one point, I ended up post-direct-deposit with $100. I went completely ballistic, and they just insisted that they were really helping me.
They had no good answer to the question of why I would want a $30+ cup of coffee.
Bella – BNSF (Burlington Northern Credit Union) has an actual office near you. It’s south of the Ship Canal in Interbay, near Magnolia, but I don’t recall exactly where. I once stopped by with a friend who was a member. I know they have a lobby and a drive up. Anyone who lives in a 10-mile radius can join.
My small, local bank was gobbled up about 10-15 years ago by a large, West Coast bank, that then merged with Wells Fargo. After years of being charged all sorts of fees, I switched to BECU, and have been happy since.
Thanks TJ, I’ll check one out : )
Hmmm, I found (online) a Burlington Northern Credit Union which seems to be located only in North Dakota, and a BNSF CU which is in Texas. Nothing from either in this state, and I don’t recall seeing any credit unions in the Interbay area on the CU Service Center list posted earlier!
How curious.
Sorry. Either they changed, or I incorrectly remembered. It’s Cascade Federal Credit Union (http://www.cascadefcu.org at 4035 23rd Ave W). Looks like eligibility is restricted to employees of certain companies, but there’s a number and email to check elibility if the employer is not listed. Your business may have to join if not currently eligible.
For anyone who’s been banned from the American banking system due to unpaid overdraft fees, lack of social security number, etc., check out Bank on Seattle-King County: http://www.everyoneiswelcome.org/
It’s a grant-funded program (read: nice people who care!) that lets you open an account at many credit unions and banks even if you have a bad bank or credit history.
A friend opened a credit union account through this program and it was literally no questions asked– just, “We’ll send you a debit card in a couple of days, and come back and talk to me when you want help getting your credit together again.”
No more paying fees to check cashing places, no more money in mattress.
BECU are bunch of assholes. Their customer service sucks. You go into one of there fake branches and the people don’t know a fucking thing and then you call the assholes on the phone and they are just a bunch of combative fools that play games.
BECU are bunch of assholes. Their customer service sucks. You go into one of there fake branches and the people don’t know a fucking thing and then you call the assholes on the phone and they are just a bunch of combative fools that play games.
I finally left Chase for a Credit Union last week, and spent half a day getting all my Bill Pay and Direct Deposit information set up and transferred over. Was it a pain? Yes. Was it worth it? H-E-L-L Y-E-S!!! Those SOB’s at Chase screwed me over royally by closing my credit card, which was not behind or in arrears AT ALL, with no explanation, and hurt my credit score. I am steaming mad!!! I will NEVER go back to a for-profit bank EVER AGAIN! I am a permanent credit union customer from here on out! May those SOB’s burn in hell forever!!!
I just have to rant about my BoA story: I recently just discovered that I’m now being charged a fee for having a checking account at BoA. I also have a credit card with them and a year ago when I lost my job for 3 months, missed one payment. I finally got my debt under control and called BoA because my card had expired. I was transferred to some clearly miserable person, who barraged me with questions about my income and job title, then slashed my credit rate down to what I started with when I was 18. I also lived abroad for a while, and for every time I used my card, I was charged an international transaction fee of $35 and then 10% of whatever I purchased. So all of the money that I had worked so hard to save to study abroad and make the most of my secondary education was wasted on fees. I have been desperate to find an alternative to BoA and had thought that Chase would be better, but now I see that banks really ARE the devil, just like great grandma told me.
My only question is which CU is better? WSECU or BECU?