Blacklists and Golden Parachutes

Tell me if you've heard this story before. A women balances her checkbook and transposes two of the digits, so instead writing .83 she writes .38. So when she writes a check she is over drawn by .50 or so on her account. Her check bounces and the bank starts hitting her with fines, she calls the bank and receives gets customer no-service. Months later the bank has her overdrawn on the account by hundreds of dollars thanks to fines and blacklists her with all the banks in the state.

When I first wanted to open a bank account my dad told me this story, he said it happened in over on the east coast but was an important lesson. He then pointed out that I was eligible to bank at a credit union. The lesson was more than just math the lesson is to watch the money. As a member of the credit union you are a share holder, as a member of a bank you are the customer.

Now, I don't believe that credit unions are the end-all be-all of the financial world but the news has certainly attracted attention to banks. The woman in the antidote couldn't bank within the state until she paid the bank hundreds of dollars over a .50 mistake. I overdrew my checking account one time, the credit union posted a fifteen dollar fine to my account. That's it that was the end of the issue. But to be fair banks tend be more profitable for investors, especially the CEO's. http://www.youtube.com/watch?v=1FV4c4QJZ2c Now I don't begrudge him is pension of 53 million, but he is supposedly walking away with 125 million dollars. That is quite the golden parachute for a CEO who had to be bailed out by the United States government.

I have to wonder what are the stock holders getting? At the current moment Bank of America Stock is worth $16.34, yet last year around this time it was worth $30.00. To be fair the credit union I belong to only gave me a ten dollar dividend at the end of of last year, but I only had two shares. Plus the American taxpayer now has a vested stake in Bank of America without receiving any of the protection or rights that share holders get.

Maybe a new CEO will be better for Bank of America, but somehow I don't think so. In the meantime just remember credit unions help people through life. Bank of America helps Ken Lewis. Follow the money and watch your stocks, because a ten dollar profit is better that a loss and a government bailout any day.