We live under the unfortunate false assumption that the money we make and put in the bank is ours. That we can access it at any time and that we have a right to it. After all this is America. Once upon a time, in America, the money you put in the bank (your money) could yield 5 to 6 percent interest. It was a form of shared compensation from the bank for using your money to invest or loan to other people and businesses.
Today, we are subjected to a never ending onslaught of fees, fines, and arbitrary charges that pop up when we least expect it. Some banks are seriously considering a tellers fee. If you walk into a bank and talk to a teller, you're charged a fee.
It's become almost comical to watch as the financial industry systematically ravages everyday people in this country and then watch as our elected officials oppose an organization that would protect their constituents from being fleeced.
Forty-four Republican Senators wrote a letter saying that they will block anyone from serving as Director of the newly formed Consumer Financial Protection Bureau -- an agency that we, the consumer, need now more than ever.
Elizabeth Warren, recently addressed that issue in a recent HuffPost piece:
I hope that when those Senators next go home, they ask their constituents how they feel about fine print, about signing contracts with terms that are incomprehensible, and about learning the true costs of a financial transaction only later when fees are piled on or interest rates are reset. I hope they will ask the people in their districts if they are opposed to an agency that is working to make prices clear or if they think budgets should be cut for an agency that is trying to make sure that trillion-dollar banks follow the law.
For some reason we've all accepted these crimes as normal. That it's normal to pay a bank for the privilege of using your money to gamble with and in some cases lose. That it's normal to be charged ridiculous fees for things we were never told about; that arbitrary policies can pop-up at any time, and that banks can hold our money hostage.
In a recent post on Credit Slips, Adam Levitin, Professor of Law at Georgetown University, wrote about an arbitrary charge that he received when transferring money to his American bank account from Israel.
I recently received the check from one of the largest banks in France as part of a life insurance policy from my recently deceased godmother -- a bank check in euros. I deposited the check in my account nearly a month ago and have yet to have access to any of those funds. According to my bank, Eastern Bank of Massachusetts, the process of cashing a check from a foreign bank can take 6-8 weeks. A detail they didn't tell me about until a few days later.
I recently received a reimbursement payment from an Israeli university for some travel expenses for a talk. The reimbursement was for $553 and was done via wire transfer. To my surprise, my account was only credited with $525. $28 was taken out as a fee. I inquired with my bank about this, and they said that they didn't charge the fee -- it must have been an intermediary bank. But the wire transfer receipt didn't indicate any intermediary. In fact, I was surprised to hear that there was an intermediary -- the transfer was from one of Israel's largest banks to the largest bank in the United States.
I'm rather puzzled by this fee. I didn't agree to it, as far as I know (although who knows what is buried in my bank account agreement). There was no indication of how it was calculated, etc., or to whom it was paid, only an indication that $28 was taken out of the transfer.
The bank in France however, claims that the funds were debited and made available on July 5 (a week after my deposit) but Eastern Bank claims it could take until the end July or longer. Meanwhile my money is floating around and being used to invest, speculate, and gain interest for someone else -- in short, make someone else more money.
Eastern Bank is a regional New England bank with assets upwards of $6.7 billion. My wife and I chose it in order to avoid having to deal with behemoths like Bank of America and Wells Fargo. We figured, naïvely, that a bank of this size was small enough to care about customers, yet big enough to meet our business and personal needs.
Like with any bank however, as we see in countless stories of abuses by banks, the customer doesn't matter and neither does their money, at least not once it becomes the bank's money. I spent several hours over the course of a few days on the phone with customer service or in branch offices with absolutely no results and no explanation as to where my money is.
Neither Teresa Sarno nor Estela Budo, Eastern Bank Assistant VP and Assistant Manager respectively, could tell me where my check was or what process was used to retrieve the funds. Nor could they tell me when I could expect the funds. The only thing that they could tell me however, was that I would get the exchange rate that is posted on the day my funds were deposited to my account -- which, as of today is significantly less than what it was the day I deposited it. The actual numbers are irrelevant, but let's say that the amount I've lost so far (and the euro is dropping) is somewhere between a night on the town and an entire month's pay, depending on what rung of the socioeconomic ladder you find yourself. I'm going to guess that Eastern Bank's customers aren't pulling in multimillion dollar Wall Street salaries, so the misuse and disregard for other people's money in this case is borne by the people who can least afford it and have the most to lose. In all, it would have been cheaper for me to fly to France and cash the check myself.
What's particularly concerning in all of this is that neither an Assistant Manager nor a Vice President of a significantly large bank can tell me where my money is, who has it, what bank or country it's in, or why it's taking so long to make it to my account. So really, the exchange rate is completely arbitrary and doesn't quite follow the rules of reality.
If I were to use my debit card to buy a signed picture or a T-shirt of the Dalai Lama from a mountaintop gift shop in Tibet, the transaction would show up instantaneously, charges would be applied in the blink of an eye, and if I was for any reason overdrawn, I'd get hit with a fee far exceeding the price of a T-shirt.
A check, by definition, is a legal contract between two parties, given to a bank in good faith to act as an intermediary to retrieve those funds. It is not handed over to them to gamble with or "play the float" -- where a bank holds your money, watches the ever fluctuating exchange rate, dumps it into your account at the lowest possible time and pockets the difference.
I called the Attorney General's office, the Fed, the FDIC, the OCC, and the Division Banking to try to get answers about this. Not one of those agencies could provide an adequate response as to who handles these complaints and according to some who didn't want to be on the record, the matter is unregulated.
We've been conditioned to think that a shoulder shrug and a simple "I don't know what to tell you" or "I'm sorry you feel that way" from the VP of a bank is an acceptable answer to what happened to our money and that the intricate workings of the financial markets are too complex for us to understand, when the simple fact is that we have little control over our own money and we're essentially just handing it over for them to play with until it's no longer profitable. At which point they toss us whatever is left over.
Incidentally Bank of America and PNC, both of whom Eastern Bank apparently uses for foreign transactions, told me that as an account holder my money would be available to me the next day. Out of curiosity, I also called a handful of credit unions in the area, all of whom quoted me a time frame of 5 to 10 days.
I reached out to a few of the highly competent attorneys on our network at Home Preservation Network to ask about this very topic. Here's one of the emails I got back from Florida attorney Matt Weidner:
What if Americans finally just got totally fed up, and every time they were abused they marched into court and filed suit? Talk about a revolution. Talk about death by ten million cuts. Improper fee... lawsuit. Improper hold.... lawsuit. Lying on marketing material... lawsuit. Manipulate stock returns.... lawsuit.
Our American court system is supposed to be a forum for redressing abuses right? Our entire country is grounded on the notion that there is a higher law and that the higher law is owned by the people, right?
Screw the elections. We're all ignoring the third branch of government. In reality, the only one in which we have immediate, guaranteed, and very inexpensive access. I'm tired of hearing people complain without standing up and doing something -- either symbolic or practical.
The law is not just for lawyers. Our courts are not just for attorneys. Our courts are FOR THE PEOPLE.
You really want to get their attention? Make these multi-national corporations face lawsuits for their bad conduct in every single county court in this country. Screw them and their $600/hour attorneys. Screw them and their call centers in India. File a small claims case and drag their asses into a dirty, cramped small claims court.
I'm thinking that an action like that, by the tens of thousands of people experiencing what I'm experiencing, might send a message. It's clear that not everyone in America is cashing checks from foreign countries, but there are enough doing so that "playing the float" is more than likely a profit center worth tens of millions of dollars to the banks. There are more ways to rob people that holding on to foreign currency and certainly more ways to hold money hostage.
Once upon a time in America, people used to stand up for themselves and have the self-respect and dignity to take their business elsewhere when they knew they were getting screwed. At least there was a cop on the beat you could call when you were robbed and we protected our citizens. Today we hand the crooks the keys and help them load up the truck.