Sunday, June 05, 2011

It's Not Just the Big Banks...

It's not really news that everyone hates banks right now. They were at least partially responsible for the economic malaise we're in right now, they needed a bailout with our tax dollars to keep afloat, and they have used some decidedly shady practices in the mortgage industry. And to top things off they continue to nickel and dime their customers in any way they can while they continue to lobby the government to relax regulations on their industry while they pay ridiculous salaries and bonuses to their upper management. It's pretty easy to hate on the big banks right now.  With the big banks dealing with so much negativity, I would assume that smaller banks, credit unions, and financial institutions would be doing all they could to keep their current customers, make them glad they're not stuck with one of the huge evil banks, and attempt to lure in new customers. What's amazing is it doesn't seem like they're willing to do this, or even care in the least to make an effort to help customers.

In the last 6 months I've had 3 different experiences with 3 different small-ish banks that were all extremely frustrating, headache-inducing, and forehead slappingly stupid.  This has only reinforced in me that we don't just have problems with the big banks, but that the banking and financial industries are systemically flawed right now and it just doesn't look like it will be getting better any time soon.

The first involved TCF Bank. They're not a "tiny" bank by any means, but they're also not as huge as the big 4 banks. Anyhow, we had a second mortgage with them on our previous house. Before buying our new house, we wanted to pay off that second mortgage as we'd been planning on doing so before moving. We were trying to be responsible home buyers unlike, seemingly, every other home owner on the friggin' planet.  So we requested a payoff amount, but I made the mistake of doing so over the phone. I tried 3 different branches and their general customer service number and none of them would or could give me a payoff amount. I didn't think getting a payoff amount was that difficult, but they said they could only do it in a branch with a mortgage unit with me there in person, which is hard to do when they're only open during the hours that I, and most people, are at work.

So what I did is basically beg the final person I was talking to about what to do if I couldn't make it in because of the aforementioned work schedule (I wasn't going to sacrifice a vacation day because of a bank's incompetence). His advice: "Just overpay. We'll cut you a check back for the balance when it's processed." Fine, I gave up and simply calculated the payoff amount for the date my check would arrive and overpaid by $25 just to be safe (since this is a bank that usually processed my checks weeks after they received them). I have yet, to this day, received a final notice that our loan was paid off or a check for the overage I paid. When I called to check they simply had my mortgage noted as being paid. So, essentially, I ended up paying a $25 "you're an idiot for trusting a bank" fee.

The second experience was with Endura Financial. For our current home, we used the same strategy to buy it as we did our first house (80/10/10). Our second mortgage was with Endura and the terms of it were such that we needed to open a checking account and savings account with them in order for them to provide us with a loan. We did so, but they didn't disclose to use that they would start charging monthly non-use fees if we didn't use the accounts. All we were told when securing our mortgage, and all that was in our closing packet, was an account opening page that we had to sign. We were not told of these fees.

When calling and talking to the bank, they continually dodged the question about why I wasn't told about this at closing and would not provide any information about their standard process or how to alleviate these fees for accounts we weren't using. "Well, use the accounts to keep the fees from occurring." That was their solution. What I ended up setting up with them to avoid the situation was making a monthly transfer from my Wells Fargo checking account to my Endura checking account and then paying their mortgage from my Endura account. The whole fee situation and how they set up our accounts seems quite fishy to me... but at least I have it set up to avoid any of their fees going forward.

The final experience was with Home Federal, a quite local Minnesota bank. We have a loan through them for an investment property we own and over the last year or so, I've had quite a few interactions with them that have left me in fits of frustration. First, they were completely incapable, until the 3rd try, of changing the address on the account that statements and documents should be sent to. Second, they are incapable, or I should say they state their systems are incapable, of providing me with actual monthly or automated statements for our payment history. It has to be manually requested.  Third, and this is what is really dumb, they did an escrow rebalance on our loan and changed the monthly payment amount. They told us of this in the middle of the last week of May... and our first payment at the next rate was due June 1. For just about anyone, including us, that wants to have payments in on time will be mailing it before or during the last week of May. If I wouldn't have caught this and sent a quick differential payment we would have been assessed a fee for that billing. When I called and asked about this and how they expected people to have sufficient time to make their payments when modified, their response was, "Yes, we can see that might be difficult, but we'll work on it in the future. Thanks!"

At the end of these minor, but frustrating, ordeals I'm left with wasted time, a sense that no bank really gives half a thought to their customers as anything more than revenue sources, and numerous wishes that I didn't need the services of banks. The reality is, though, that in order to have a house, make investments, and participate in today's society I have to have bank accounts and mortgages and use bank's services. It's just unfortunate that they all seem to be equally incompetent, uncaring, and difficult to deal with. If I could find a financial institution that somehow seemed competent, I would put every last dollar of business I could through them, but I've yet to find that institution. The closest I've found, crazily enough, has been Wells Fargo. Go figure.

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