FiLife

According to the Blueprint for Stronger Regulatory Structure, fresh from the steaming hot presses of the U.S. Treasury, the era of financial market band-aids is over.

On Monday morning, Treasury Secretary Henry Paulson revealed an overarching plan for straightening up mortgage lending, consolidating banking and securities oversight, as well as establishing “optional” federal monitoring of insurance.

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So how the hell did we get here?

You’ve got big fancy investment banks hitting the skids, the Federal Reserve running around like a spaz and everyone speaking of the coming Armageddon.

If you want a simple and entertaining way of understanding what has caused all this mess, you could do a lot worse than this crudely-drawn but sophisticatedly simple PowerPoint presentation that came in over the transom. Watch and learn, friends.

– Sam Grobart

If you ask these people, today’s twentysomethings are swarming with financial scabies.

KeepItInYourPants.org is handing out a $5,000 scholarship for the student who can produce the best Debt Disease PSA and perpetuate its gimmick of likening credit-card debt to STDs. You can see the Pants People’s intro video (Barry White alert!) here, via US News and World Report.

I admire the general mission of the campaign, but I think most of us would rather take a missed credit-card bill payment over the clap any day. And unlike STDs, credit cards can actually be good for you. Last I checked, there weren’t any rewards program out there for herpes infections.

It’s no secret that banks and credit-card companies seek out college kids like underage frat boys looking for a kegger. And the average undergrad will have $2,327 in credit card debt by graduation.

But what about the irony of handing out a $5,000 scholarship to promote debt awareness and not even breathing a word about ballooning student loan debt? I looked all over the Debt Disease site with its nifty iPod icons and awkward pop-punk design (because kids today LOVE that stuff) and couldn’t find ANY information about how to use credit cards responsibly, establishing credit history or the fundamentals of student loans.

So who are the sexually-charged folks behind this campaign? (more…)

It’s a scene that I’ve witnessed all too many times.

Last week, I strolled up to my Washington Mutual ATM only to find a stranger’s forgotten Citibank card already in the machine. I quickly grabbed the card before the thieves could and handed it in to the customer service desk. The WaMu employee thanked me and rolled his eyes – a face of frustration, as if this happens all the time.

The absent-minded Citi customer was probably used to the “dip reader” ATMs (for a visual, click here). At Citi locations, for instance, you insert your card, wait for the machine to recognize it and then remove the card before you tell the machine what you want to do. The card never disappears into the machine.

In contrast, the “manual card reader,” (for a visual, click here) like the one at WaMu branches, takes your card, sucks it all the way into the machine and doesn’t let go until after you’ve received your cash and told the machine that you’re done.

So why don’t all banks use the dip reader ATMs? (more…)

So last week a banking-industry consulting firm, the Tower Group, issued a report that showed that more banks could make more money if:

a) They installed coin-counting machines in their branches

b) They charged customers for the service

By Tower’s lights, the banking industry could rake in an additional $500 million if they took these two steps.

Reading the report, I think that Tower is absolutely right and absolutely wrong about this issue. Let me explain:

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Ok, for those of you tuning in to the middle of our programming, here’s the briefest of recaps:

• I bank at Citibank
• Like most of you that use the bank on the corner, I get hit with all sorts of fees.
• I hate Citibank.
• I want a checking account that reimburses me for all ATM fees, has no fees or minimums of its own, has a good online setup and pays me a stupid amount of interest for storing my money there.
• Until recently, I thought that none of this was possible.
• I was wrong.
• Turns out most, if not all, of the best banking deals can be found at online banks.
• After some initial research, I thought that Charles Schwab had the best deal going.

So that should bring us up to speed. Since my last post, I’ve had a course correction. I was all set to sign up with Charles Schwab (had the application filled out and everything), but then a little birdy whispered “Fidelity” in my ear, so I went to check out what that mutual-fund and brokerage company was offering.

Turns out they were offering almost the exact same thing. Except the interest rate on their checking account was 3.5%. Schwab’s is 4%. Game over, you would think.

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New Jersey-based Commerce Bancorp, the home of actually convenient business hours (often open from 7.30am to 7pm, not to mention Sunday hours) and the free coin-counting Penny Arcade, has agreed to be acquired by Toronto-Dominion Bank of Canada. While you may not know them by their full name, Toronto-Dominion operates both the Northeast retail-bank chain TD Banknorth and has a stake in Law & Order spinoff/online brokerage TD Ameritrade. Further coverage on the deal can be found here.

Any TD Banknorth customers out there? What can Commerce people expect?

–Sam Grobart

First things first: Happy Rocktober, everybody.

So last Friday, the Office of Thrift Supervision (aka The Government) closed online bank NetBank. Citing “significant losses in 2006 primarily due to early payment defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls, and failed business strategies” the federal agency appointed the Federal Deposit Insurance Corporation as receiver. The FDIC is like an insurance company that makes sure a bank’s customers don’t lose all their money when a bank goes belly up.

Meanwhile another internet bank, ING Direct, took over all of NetBank’s deposits that the FDIC covered. EverBank, another online-only bank (and erstwhile potential savior) assumed the bank’s mortgage assets.

With more than 100,000 customers and $2 billion on deposit, NetBank’s closing is the largest bank failure in 14 years. And NetBank was one of the early players in online banking, having set up shop in 1996 (!). Some online-bank haters may feel this is the proof they were waiting for. “See, suckers,” they cry, “we told you those online banks were bunk! Good thing I’ve got my money in the local savings & loan.”

The problem with this sentiment is that it’s wrong. (more…)

Have you ever noticed those beautiful, acne-free faces staring back at you when you browse a bank’s web pages?

These are often stock photos—existing photographs supplied by a stock photography agency that can be licensed by advertisers and publishers. The images are typically of good-looking, stylish people with blindingly white teeth and satisfied grins, often leaping into the air at the sheer excitement of a decent home-equity loan. The message here is that the people using the bank are not your old-fart parents but the cool kids who are just like you—or who you wish or think you are like.

Here’s a thought though: How about products speaking for themselves? We all like to look at a pretty face. But, when we’re shopping around for a new checking account or a loan, we are much more turned on by terrific money-saving deals than we are by the youth and hipness level of a bank’s customer base.

It would be nice if these banks put as much effort into clear, detailed explanations of their products and easily reachable customer service as they do into plastering their sites with beautiful faces. I don’t care if Iggy Pop or Dick Cheney is pitching me a student loan as long as I get a reasonable interest rate and a waived origination fee.

Here’s what popped into our heads when we saw these smiling, attractive people pitching everything from mortgages to CDs and credit cards:

Chase home-equity loan calculators bring the kind of fire to our relationship that we’ve been waiting for.

More silliness after the break…

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Ok, so a few weeks ago I posted about opening a checking account online, and now I’m ready to narrow the field.

But let me set the terms. What, exactly, am I looking for? Well, this, for starters:

I want unlimited, automatic ATM-fee reimbursement. I don’t want to have to fill out forms and mail them in to get my money back, and I don’t want to hit a limit when my fees reach, say, $25 in a given month. I want to use any ATM I want, anywhere I want, as often as I want–and I don’t want to have to think about whether it’s costing me any money. Period.

And I want a high-interest checking account. A ludicrously high-interest checking account. And I don’t want to have to keep some ridiculous amount of money in the account to get it. This is for short-term savings, after all.

And I want a good–no, great–web site interface that lets me move money around and get help whenever I need it. I also want something better than the usual phone-rep runaround that I’ve been getting for years from Citibank.

So which to pick?

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