Thursday, October 20, 2011

A solution to banking

The biggest issue facing a lot of people right now is where and how to put their money aside so it's safe. A lot of people, for example, use big nationalized banks like Bank of America for their savings and investments. Unfortunately, these big banks have shown to have to qualities that are not very attractive to customers: greed, and unreliability.

BofA, you will know if you pay attention to news, recently said that they were going to charge people $5 just for having a debit card, on top of other fees and so on that people have to pay. The bank's argument for this was that they had a right to make a profit and that recent restrictions placed on them by the government were restricting their cash flow. That's all well and good, except for the fact that BofA then posted profits in the billions of dollars. Which begs the question, how much profit does a company have a "right" to?

Also, BofA is one of the banks that has been targeted for less-than-ethical practices, questionably legal operations, ridiculously risky trading of their customers' savings, and wholehearted acceptance of government bailout money which they then used to give their president's and CEO's bonuses. BofA currently has billions of dollars in surplus cash, yet they continue to cut jobs and bemoan their inability to operate effectively in such a constricting environment of regulations.

And keep in mind, BofA is just one example of a nationalized bank or financial institution that has sucked our economy dry while they continue to prosper.

So what is the solution? The biggest draw of a national bank was that you didn't have to worry about whether it was going to survive a financial crisis. Of course now, the concern is whether that bank is going to cause the financial crisis.

My solution to the national bank issue is to invest your money in small, local banks or, even better, credit unions. These are great because your money stays local, doesn't go to a business that is able to invest it crazily in the markets and lose everything you ever earened, and a bank that is more flexible and personal for your own needs.

I use a credit union, and have had no complaints from them. The interest rates are very good, loans are easy to get and pay off, and I don't have to worry about who is using my money.

The best thing about using local banks and CUs is that you are then taking your money out of the hands of a large business that has shown that it doesn't care for you, only your money and it's own wealth and prosperity. If we all took our money away from the national banks, they would be either forced to close or forced to adopt different policies that attract customers. Their recent history of waste, fraud, and abuse has turned a lot of people off from them, and so this may be the right time to make a push for local banks.

Any local business is going to be a better option on average than a chain or franchise. Local businesses are more flexible, they don't react as much to major national economic shifts because their sphere of influence is smaller. They tend to be able to weather hard economic times well, as long as they have the support from the community. Finally, supporting local keeps your money local. When I pay bills, I'm sending my money all over the country. What I want is to keep my money where I live. Investing in our communities means building a stronger one, and America is built on its communities.

Our currency all bears the words E Pluribus Unum, which means "out of many, one." Supporting local banks and Credit Unions supports your local economy. And out of many local economies, we forge one strong nation. Let's take a few steps back from nationalization and globalization and support the people in our own back yard.

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