Saturday, February 27, 2010

The Parental Trap / Spank Your Bank

There comes a time in each of our lives when circumstances compel us to drastically change the relationships we have with certain others, and our roles in those relationships may be forced to change as well. Changing roles is not always an easy thing to consciously do. It frightens us if we think about it too much, yet we often do it unconsciously throughout the course of our day. When we reach that point of knowing that a change is necessary, sometimes it is better to just act than to think too heavily about it. Change never comes if we talk ourselves out if it.

For as long as many can remember the banks have adopted a stern paternal role - writing the rules and handing out discipline - and we've accepted the role of the child - dutifully depositing money into our accounts, handing more of our money over to the banks as payment for having done some form of misdeed in their eyes, and accepting the diminishing crumbs (ie: interest) the banks have handed us as some sort of reward - because we have allowed ourselves to be convinced that this is the way the power structure is, and these are the things that the "parent" expects of us.

Meanwhile the banks have taken the power we've lent them and used it as a fifteen year old boy might - greedily and recklessly and with the arrogance that comes with quickly amassed and ill-gotten power. The banks show a smug indifference toward public opinion and they thumb their noses at the government. Spoiled little brats, all of them.

Now with each passing day - each new fee - each increase in your interest rate - it becomes more and more obvious that we have to turn the tables on these out-of-control-teenagers we commonly refer to as the banks, and assume the parental role. It's a matter not only of what is right, but of our survival as well. Congress won't do it. Too many of our dollars have been used by the banking industry to lobby against us and our best interests. That means it is up to US to make the changes happen.

I've been asked why it shouldn't be enough to move one's money to a smaller bank or credit union - without having to hand a bank employee an envelope containing the Proclamation. I spelled out some of my reasons in a previous entry, but there's another reason.

It is common when you have a child who is misbehaving to take away something it values so as to encourage that child to correct its behavior. To the child the incentive to improve lies almost completely in the promise of a reward at the end. Usually that's understood to mean returning the item. Sometimes it means replacing it with something else of equal or higher value. In any case, the reward is the carrot we dangle in front of children to entice them into developing better patterns of behavior.

But... without direction the kid can flounder around a long time before figuring out exactly what change in behavior is going to win them their reward. So we give the child instructions to help him/her correct their behavior faster, and tailor it to our liking. Bearing that in mind, if we do not give the banks instructions - if we do not tell them what we want - it could be snowing in hell before the bankers figure it out. You see, bankers are a crafty lot. They are sneaky, sly, and unscrupulous. But what they are NOT is SMART. They can come up with the most unbelievable reasons to charge you a fee and some even more unbelievable justifications for charging it. But they are apparently not smart enough to comprehend that their actions are driving customers away.

Now, a smart person would look at the situation and say, "Okay... something here isn't working. Maybe we should stop doing the things that are causing us to lose business." But have they done that? No. Instead the banks just pass the burden of their losses on to their remaining customers by increasing their fees and interest rates.

The smart money says that's a sure-fire way to run your business aground. Even though they need no pointers on how to do this, I've prepared a list of the five steps any big bank CEO may use to successfully tank his bank:

1) Don't lend money.
2) Keep raising existing fees and inventing new ones.
3) Pass the burden of your profit "losses" on to your remaining clients.
4) Refuse to work with customers when they address you with problems.
5) Use "Customer Service" as a euphemism for your collections department.

As you can see, Bank of America is employing every single one of these practices. Since they are doing it there's no doubt that other banks are doing the same as well. Thus it would seem that the banks are not smart enough to see how the greed and corruption that has infected their industry is hurting them, or how they are positioning themselves for a failure they believe they are too big to suffer.

And this is why we are obligated to be the parents and give the banks a swat on the bottom and a new set of rules. The rules will keep the banks focused on what we will and won't allow - what is acceptable behavior and what is not. And this will permit them to grow up. Mature a bit. Perhaps even develop an attitude of gratitude (you'd be surprised at how much gratitude can come out of someone who has very few options).

"PROC 7", the Proclamation of Required Change, is our behavior guide for the banks. It is a tool for restoring the proper balance of power between the banks and us. It is a powerful gift that we give the bank which can help them remain solvent while creating a much better relationship with its customers and a much better future for our nation's economy. Think of it as "tough love", for that's what it is.

People I meet have been agreeing that it is far better to tell the banks what we expect them to do following the withdrawal of our money than to silently withdraw our money and put it somewhere else. So let's all be the "good parents" and give the banks a dose of some much-needed tough love. We shall all benefit from the results!

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