February seems as good a month as any to discuss your relationship – with your bank. Like Greg Ahrendt, who wrote He’s Just Not That Into You says, “I’m tired of seeing great women in bull*%#! relationships.” The movie is a humorous look at unhealthy relationships and when and how to move on. Do you know what’s not funny though? That feeling you get when someone you care about describes their relationship and what you hear is they are not being valued or respected. When I heard my clients’ stories about BIG* Bank, I felt the same way Gigi’s friends in the movie did when she talked about men not making a reciprocal investment in her, or even showing basic respect. I feel angry for those clients, and I want them to stop wasting their time and energy on “someone” who isn’t into them.
Here are a couple of stories to illustrate my point.
The first is two examples of successful women entrepreneurs who were each turned down for credit in remarkably similar circumstances. One client had credit taken out fraudulently by a relative, and the other’s boyfriend did the same. They both banked at BIG when each one was, twice, refused a loan: early in 2019 for a line of credit and again in 2020 for a PPP loan. Their credit, earnings, and net worth support the funding requested. One client moved her business to a community bank and her personal banking to an online bank. She told me, “I needed to change banks. If they won’t support me and my business, then it just isn’t wise for me to continue to do business with them.” The other is still at BIG.
The second story is of a successful management consultant for 30 years whose client base includes major banks, utilities, mining, and engineering firms. She put her business account with BIG three years ago and successfully applied for a line of credit that year. However, in May of 2020 when she contacted the business banker at her local branch, she was told they were not taking applications for PPP and that her banker was instructed by management not to return phone calls to business customers inquiring into PPP loans.
I’m not sure how you are feeling about these stories or if you have had similar experiences at BIG but they make me angry and I don’t want you to tolerate this kind of treatment. A banking system that doesn’t care about the people it serves is broken. Do you know how I know? There’s no one in there. At my local BIG office there are two tellers, a customer service rep and an intern that says have a nice day at the Purell dispenser by the door. Alternatively, go down the street to the Apple Store and it is teaming with customers and service people buzzing with activity. When the disruptor comes along that makes banking like a trip to the Apple store, and it is coming, BIG will cease to exist in record time.
I believe we are all best served to take our money and leave these institutions. My wife and I already started doing that after our personal experience with BIG. I recommend moving your accounts to a community bank or credit union. At a credit union you’re a stakeholder and a decision-maker there. You get a dividend, a say in certain decisions, and you might even get a hometown business experience where people remember who you are. Start with savings and checking accounts, and when you feel it’s safe to go deeper, you might just find a motivated competitor for your mortgage, auto, and credit cards.
Get out of predatory relationships with credit card companies. Banks are driven by the profit of high-interest credit cards. They lure you with double airline miles or the status of a shiny metal card. The free flights will never outweigh the 18% interest you’ll pay if you overspend one month and carry a balance. I have no problem with using credit strategically. Run all your expenses through a high mileage card and take your family for a Hawaiian vacation. Be that person, but if you think there is a chance you will not be able to pay the balance one month you might be better off just paying with that not so shiny, single color debit card. You’ll be better off in the long run.
Almost everything else BIG does is low margin and they need to provide services like checking and savings to keep you coming in. Banks like BIG will keep charging all those fees as long as we let them. It’s up to us to make the decisions to stop taking part. We can take a page from the book and apply it to our relationships with our banks and lenders, “It’s very tempting when you really want to be with someone to settle for much, much less — even a vague pathetic facsimile of less — than you would have ever imagined. Remember always what you set out to get and please don’t settle for less. These guys exist because there are a lot of women out there who allow them to.” Take out “guys” and insert BIG in the above and it is excellent financial advice.
*I substituted the word BIG here for the bank in question. I don’t think it is fair to single out one bank though it happens to be the same one in the stories above. I recently wrote a letter to the CEO though it is still on my desktop unsent. I haven’t sent it because I just didn’t expect that it would be read or that it would make a difference. Sad, because it happens to be one of the best run of the big banks and I am a shareholder and a former client of BIG.