By Daniel Willis
The Times
© Copyright 2011, Bay Area News Group
Posted: 11/05/2011 12:01:00 AM PDT
Updated: 11/05/2011 06:01:54 PM PDT
On Saturday, I closed all my accounts at Chase Bank. I didn’t do this because I’m a protester or a self-styled revolutionary. I didn’t do it for political reasons. I transferred my money out of Chase because it’s my duty as a capitalist.
Capitalism, at its core, is economic democracy. The analogy isn’t perfect, of course — it’s certainly not one person, one vote — but the basic concept is true. Every time you spend any money, you’re casting a vote for that business to survive and grow instead of competing businesses.
In most cases, this serves as incentive for the business you don’t vote for to improve their product. If two restaurants are next door to each other, for example, you’re going to eat at the one with the best food. The other will see the empty tables and improve its menu. The first restaurant, in turn, has to improve to maintain its lead. In the end, you, as a connoisseur of fine cuisine, win.
Banks don’t have a tangible product. Interest rates are negligible for checking and savings accounts if they exist at all, so with a couple minor exceptions such as smartphone apps and ATMs that accept checks, they’re a generic service. That means the distinguishing features of any given bank are its fees. Chase has, over the course of this year, gone from not charging me a fee for my checking account to charging $5 per month and, currently, $10 per month. My savings account incurs a fee as well.
By keeping these accounts open, I’m implicitly giving Chase my permission to invest and earn a return off my savings. This means I’m paying Chase about $200 per year for the privilege of letting them earn money off my money. I’ve come to realize that this is my fault. By paying these fees while other banks don’t charge them, I’ve been endorsing them, removing the bank’s incentive to improve its value. If you’re also paying these essentially voluntary fees to Chase, Bank of America, Wells Fargo or a long list of others, it’s your fault as well. By paying them, we’re telling banks that they don’t have to bother to do better. We’re casting our votes in favor of paying hundreds of dollars per year unnecessarily.
I’m done letting one of the core principles of capitalism wither away because of my inaction. I’m moving my money and casting my vote for any of the numerous local banks and credit unions that don’t charge monthly fees and, in some cases, even refund other banks’ ATM fees. The minor inconvenience of opening and closing accounts is a small price to pay to help make sure that the system works as intended.
Since I was closing my accounts anyway, I did it on Bank Transfer Day and it felt good. Really good. If we all transfer our money into small banks and credit unions in the next few weeks, the collective action will be harder to write off as due to anything but customer satisfaction. It will be our Economic Election of 2011.
The system has a mechanism to improve itself. Our economy is designed to constantly provide us with lower costs and better service. It’s well past time to put that mechanism into action. Go to www.moveyourmoneyproject.org to find a local bank or credit union and do your part for capitalism.
Daniel Willis is a database producer at the Bay Area News Group.
Nice article, but misses the point. Banks don’t like charging individual customers direct maintenance fees because it gets peoples’ undies in a twist, like this guy. However, the supreme law of economics is TINSTAAFL - there is no such thing as a free lunch - and banks are as much subject to it as anyone else. Banks are not charities and must earn at least the costs of the services they provide through some means, and since the oh-so-concerned liberals in government are constantly, and futilely, trying to create what cannot exist - Nature abhors a free lunch almost as much as it abhors a vacuum - the need to cover your costs has to be satisfied one way or another, and charging individual customers maintenance fees for their accounts is the latest cranny from which this irrepressible urge has now popped.
I agree with you EBH. I live in Spain and keep an account in a small bank in Kansas - it only has two branches but it is the most efficient bank I have every done business with.
It seems that the larger banks just want to nickle and dime their customers to death.