Banks vs. credit unions

One dollar a month might not sound like much, but let it ride for a couple million years and pretty soon you are talking about real money.

It felt like the last straw.

“I don’t know if we’re going to be able to do business,” I told the nice woman sitting across the desk from us.

We were at a local bank here in Elkins, setting up new checking and savings accounts, and it seemed like all we’d been hearing about for the last fifteen minutes were the many opportunities we would have for transferring our money directly into the pockets of the bank’s shareholders. These included:

• A $5 charge every time money is transferred from savings to checking to cover an overdraft.
• A $33 charge per overdrawn transaction if there isn’t enough money in our savings account to cover an overdraft, and an additional $33 charge for every ten days that this situation persists.
• And the aforementioned $1 charge in any month that our savings account falls below $100.

Not to mention the $10 charge we’ll incur if we need to replace a lost savings-account “passbook.” My eye fell on this item as I scanned the “Schedule of Fees and Charges.” At first I dismissed this, imagining that it only applied to little old ladies who archaically insist on keeping paper records of their withdrawals of crisp, new twenty-dollar bills to insert in their grandchildren’s birthday cards. Who else would even use a passbook in the first place, much less replace it if they lost it?

Then I looked inside our passbook and learned that “it must be presented when money is deposited or withdrawn.”

What year is it again?

Admittedly, there is part of me that had been looking forward to moving to Elkins because of the somewhat more old-fashioned way of life available there. But I was excited about things like my son being able to ride his bike to friends’ houses. I didn’t think about the way a small town with an aging population might serve as a sort of time capsule for the old way of doing business, in which banks made their problems into their customers’ problems without worrying about losing anyone to more attractive competitors because, well, the presidents of all three local banks eat lunch together.

I suppose it’s not really all that “old-fashioned” for a bank to charge its customers essentially every fee it thinks it can get away with. It’s probably not all that different from what most banks do, no matter what size town they are in.

It’s just different from the credit unions I’ve been using for the last eleven years, which imposed no account minimums (well, maybe $5), and which came to me to suggest setting up an overdraft line-of-credit to avoid being charged fees for nonsufficient funds.

This last option is technically available at our new bank, but I had to ask about it, and it’s hard to imagine the bank’s directors deciding not to foreground this option for any other reason than to protect profits. It’s not that I mind a business making profits, of course, but I’m reluctant to get involved with a financial institution whose business plan includes a dependency on its customers making financial mistakes. Something just feels off about that.

In the end, we finished signing the forms and opening the new accounts, but there’s a good chance we won’t really use them for anything except a place to deposit any paper checks before transferring them to ING DIrect, the online bank—assuming ING can give me a larger line of credit than the $25 one they offer as a starter. And we’ll stick a few checks from the local bank in our wallets, in case of emergencies; that’s also unfortunately not an option with ING.

After all, thrift is among the many virtues we assign to small towns (with varying degrees of actual connection to reality, admittedly), and I just can’t see throwing money away, even in such small increments, when I don’t have to.

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