I don’t believe anything is too big or too small to fail. I think when your customers and stakeholders withdraw permission for an institution to exist, you should fail. So when banks, large and small act in ways that make no sense, and harm society, I think they should be put out of their misery, get out of the way, and let new institutions arise and take their place. Never has this been more true than Citizens Bank in Berlin, NH.
When we first moved the business to Berlin, NH we opened an account with Citizens because it was the only bank we knew of with branches both on the Seacoast and in Berlin. If I’d known that Laconia Savings Bank would be in both places, this might not have happened. However, at the time, Citizens was also advertising favorable rates on lines of credit to people who were creating jobs in the North Country. Since we were moving up there and creating about 20 jobs, it seemed like a good fit. How wrong we were.
First we find that they charge us extra fees at every turn. The vaunted “special programs” for job creation in the North Country were never available to us. But as any small business person knows, switching banks is a major pain, so we didn’t. Even when they charged one of my employees $1500 in fees for one overdraft, and even when other employees routinely reported similar bad experiences. Until now. Now they’ve shown me just how backwards arbitrary and ridiculous modern banking can be.
A month ago, one of our larger clients put in place a credit card system for paying invoices. They issue us a credit card with the value equal to an invoice on it, and theoretically we can then transfer the funds into our bank account. But not with Citizens. As soon as we heard of this new system, I went to Citizens and started the lengthy process of setting up a credit card system. It is neither cheap nor easy. There are numerous forms, lots of back and forth and lots of confusing stuff about rates, fees, terminals etc. I thought I’d gotten it all sorted out until last Friday when I was informed that because of my PERSONAL credit score – not the company’s – they couldn’t provide us with a credit card account.
So, because of some arbitrary rule and a number that has nothing to do with my business, I can’t deposit some $20,000 in revenue into my bank account from a Fortune 500 company?
Fine, I’ll take my business somewhere else. We went to Paypal and in one hour, had the account set up and the money transferred. This is why Paypal will succeed and banks like Citizens deserve to fail. Tim Geitner, are you listening?
Ocean National is another bank that deserves to fail. Two years ago, I approached them with a plan to restructure the mortgage on my farm to make it more affordable and avoid foreclosure. I had a guaranteed offer to purchase 1/3 of my farm, which would lower both the taxes and the mortgage. They wouldn’t even discuss it and moved to foreclose. Through the incredible generosity of friends and relatives, I was able to avoid foreclosure, but that didn’t mean the problem went away. A year later I was still struggling to pay both the mortgage and the taxes and approached them again, since I still had a buyer for 1/3 of the land. Again, they refused to even talk to me about it, referring me to their lawyer. Three months ago, when the Feds announced the various programs designed to reduce the number of foreclosures, I approached them yet again, and again they referred me to their attorney who again refused to even discuss it.
When will the various regulators realize that by propping up
these anachronistic institutions, that don’t listen to their customers, don’t
listen to reason and adhere to policies and systems that make dinosaurs look
advanced, they are only delaying the inevitable? Sooner or later, society will
withdraw permission for them to exist. I certainly have.
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