Tuesday, June 5, 2012

Banks - Bleargh!

Having gotten the credit cards taken care of, I've been able to do something I've wanted to do for quite some time - get my account out of Chase. After a short time with Wells Fargo following my move to Oregon in 2000, I switched my checking to Washington Mutual, which had branches all over and in more convenient locations. That was fine until a few years ago when Chase used some of the money it got from the government because it was "too big to fail" to buy up WaMu.

That wasn't something I liked, not only because Chase used bailout money to buy up another bank, but also because it put my checking account in the same bank as my Amazon-linked credit card. I've always felt that was a bad idea.

So just before the Memorial Day weekend, I opened an account with a credit union that has a branch right near a MAX stop about the same distance in the other direction from the nearest Chase branch. I was able to do it online, transferring money from Chase, mostly to checking and a little to savings (I heard today that it's the savings account that makes one a member of the credit union). Simple enough, and I even went to the credit union in person to get my debit card.

Of course, Chase took the money out of my account within a very short time on Friday - or at least they made it unavailable to me. But they didn't transfer the money out until last Wednesday, the 30th, five days (but only three business days) after I'd done the transaction. Also, it didn't show up in my online activity page until Thursday.

On Thursday I decided to deposit a check I'd gotten. I took it to the credit union and was asked if I wanted to put $5 in savings. Turned out the money from Chase wasn't in my account. I was surprised since it was an electronic transfer and I thought it would have been in the account since Tuesday, two days before I took in the check.

So I kept looking at my account online and the money from Chase simply wasn't showing up. On Monday I called the credit union and they did some looking. I even went in so I wouldn't have to use up TracFone minutes. The woman I spoke to did some research and what she came up with was they needed the routing number that Chase had used to send the money.

Today I went into Chase. I'd been up in the middle of the night and had checked my balance in the credit union, which still wasn't reflecting the money from Chase. A very nice woman who also spoke Russian started researching. She discovered the money had been sent to a bank in California, but that wasn't a mistake. The California bank is a clearinghouse. She really did a lot of research, calling various places including the California bank. Eventually she asked if I'd checked my credit union account today. Well, I had during the wee hours, but not before I'd gone to Chase.

So she turned her computer screen toward me and moved the keyboard so I could log in to the credit union. I was asked a security question since I wasn't using my own computer. As soon as I saw my balances, I realized finally, easily six business days after my online transaction, the money was in the account.

So if you think online transactions are quicker, consider this: Each bank, Chase and First National in California, held my money for three business days before I had use of it again. Why? Well, in banking, there's something called "the float." It consists of money that's not available to the person initiating the transaction or the person receiving the money - both being me in this case. While that money is unavailable to people like you and me, it exists and banks use this float money, which even in small banks can be a sizeable amount, to make money through short-term loans.

Back in the '70s I worked at a bank in Worcester, MA. One of my jobs each day was to figure out if the bank had more than enough money to satisfy the minimum amount they have to hold in reserve or less. If more, I would compute how much more, get it approved by the comptroller whom I reported to, and sell the extra money to the government by calling other banks that could receive the money on behalf of Uncle Sam. Or if the bank didn't have enough, I'd make calls to those banks to buy money to meet the reserve. At that time, nearly 40 years ago, interest rates were in the double digits, so the bank could make or spend thousands of dollars a day. It all came down to the figures computed by one low-paid clerk and approved by the comptroller and it probably took me an hour or so. That's one of the things banks can do with the money that's not mine any more but not yet yours.

So if you're expecting money to move from your account to some other account (yours or someone else's) really quickly because you did it online, think again.

After I visited Chase, I went home, then looked up a Chase branch near the credit union. I went to the Chase outdoor ATM about a mile away from the credit union, took out as much as I could in one transaction in cash, then deposited it with the credit union, where it was reflected in my balance online when I got home.

It's not all I did on that trip. I also checked out a few stores in the area and got a few sets of battery-operated light strings for my wizard robe and wizard hat. I ended up doing a lot of walking. I need to get in shape for all the roaming around I'll be doing at Faerieworlds.

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