Steve Hoffacker's Sales Quips

We already know that banks are too big to fail - at least the major ones. Now they are giving us more proof. Since the Dodd-Frank bill has restricted what banks can charge for using debit cards in a transaction ("swipe fees"), they are making it up in other ways. They have cut free checking services, have instituted monthly account fees, have raised the price of ATM withdrawals at non-networkmachines, and are now going to charge a monthly fee for just using your debit card.

While debit cards are convenient for us, they are super easy for banks. No checks to process and instantaneous payment to the merchant. If they aren't from another bank, there's nothing to collect. Of course banks miss out on using the funds during the float while the checks are in process.

Wells Fargo has announced that they are going to be charging $3 per month for people who use their debit cards to make up for lost revenue in swipe fees. This is a test program at first in Georgia, Nevada, New Mexico, and Oregon.

Everytime the fed or the government steps in to "help" us, the make matters worse. Look for other banks to jump in on this.

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For more information on my coaching and educational programs and services, visit my website stevehoffacker.com, or go to my other bloghomesalesinsights.com for additional sales tips, insights, and commentary. Listen to my free podcast messages at Steve Hoffacker's Happenings.

Steve Hoffacker - Consultant, Coach, Author, Blogger, Photographer, Motivator, Teacher, & Strategist - for Realtors, Real Estate Sales Professionals, Home Builders, New Home Salespeople, Entrepreneurs, Small Business Owners, and Independent Sales Representatives.

© Steve Hoffacker, 2011. All Rights Reserved.

Banks are not a good example of free enterprise - although they should be. They are a repository for our money and financial services and should really be courting our business. No longer true. They get bailouts from the feds. They are over-regulated to the point where they are afraid to lend. They are anything but consumer-friendly - even though they advertise to make it appear that they are interested in us.

Maybe it's the demise of the community and regional bank - although there does seem to be some resurgence.

Go back a couple of decades, and banks were giving away toasters, glassware, and other items for opening a new account or for starting a new CD. Banks competed with each other for interest rates and services. Free checking was quite common.

Then free checking went away. Then the attractive interest rates on credit cards went away. Then loans themselves have gone away.

Excessive charges for overdrafts, stop payment orders, and other services have been instituted - including fees for ATM use - which are going up.

Now, banks want to charge us for using our debit card. They are testing fees from $3 to $15 per month to use a card that they introduced, promoted, and encourge. Everyone wins when a debit card is used. We don't need to carry large sums of cash. The transaction is processed much quicker than with a check, there is no waiting time for a check to clear, the merchant gets their money, and the bank gets a processing fee (not that they need it), and there are no additional statements or receipts. Now banks want more money for doing what already works and already compensates them well.

They don't have to play by free market rules. Of course they may charge for these services, and of course there is going to be pushback. That's not going to stop them though in the short term. Consumers are going to think twice about using a debit card if it's going to cost them to do so. One of the advantages has been that it's the same as cash or check without the downside of carrying a lot of cash or a checkbook.

Banks are not receptive or responsive to consumer needs. They used to be. Not so much anymore. They are more of a collective monopoly who can set their own rules. Where else can you get banking services? Perhaps a credit union. Maybe at the community bank.

Banks need competition. That's the only thing that going to cause them to offer what we want and need.

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For more information on my coaching and educational programs and services, visit my website stevehoffacker.com, or go to my other bloghomesalesinsights.com for additional sales tips, insights, and commentary. Listen to my free podcast messages at Steve Hoffacker's Happenings.

Steve Hoffacker - Consultant, Coach, Author, Blogger, Photographer, Motivator, Teacher, & Strategist - for Realtors, Real Estate Sales Professionals, Home Builders, New Home Salespeople, Entrepreneurs, Small Business Owners, and Independent Sales Representatives.

© Steve Hoffacker, 2011. All Rights Reserved.

Thanks to TARP, QE 1, and QE 2, our banks are so flush with cash they don't have any option except to grow their nest eggs. They aren't lending. There are very few construction loans and no AD&C loans. There is no lending for construction of multifamily units.

So what are banks doing?

They are now charging as much as $5 to use a competitor's or public ATM.

They have eliminated rewards points for debit card usage - for new customers now and likely spreading to everyone.

Bank of America is closing 10% of its branch offices.

Chase is actually stepping out and adding 37 branches and 400 jobs this year - mostly in South Florida. Maybe to provide more access points for people to give them their money.

Don't you feel sorry for the banks?

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For more information on my coaching and educational programs and services, visit my website stevehoffacker.com, or go to my other blog homesalesinsights.com for additional sales tips, insights, and commentary. Listen to my free podcast messages at Steve Hoffacker's Happenings.

Steve Hoffacker - Consultant, Coach, Author, Blogger, Photographer, Motivator, Teacher, & Strategist - for Realtors, Real Estate Sales Professionals, Home Builders, New Home Salespeople, Entrepreneurs, Small Business Owners, and Independent Sales Representatives.

© Steve Hoffacker, 2011. All Rights Reserved.