D BANK

We were talking today about the changes on Lovers Lane –where Rutherfords has moved closer to Inwood Road, leaving its former charmingly quirky space empty. The Silver Vault is also gone, moved down the street. So Rebecca tells me that a bank is moving into the spaces vacated by Rutherfords and The Silver Vault. Just what we all need, another bank!

What is particularly irritating is that there could be 16 banks all within spitting distance of one another, and they would still rape us with overcharges and fees!

Full disclosure: I am angry at my own bank now, and currently I am negotiating some fee refunds with them lest I pack up and move five accounts. A few years back I was in upstate New York with my college student daughter, and we walked into a Key Bank and asked for a roll of quarters–being a nice mom, I wanted to leave her with a good supply of laundry money. First we waited forever though the bank was empty, then we were told they could not give us $10 worth of quarters because we didn’t have an account at the bank. You don’t understand, I said, I do not want to steal the quarters. Here’s a ten dollar bill; may I please have some quarters? No. No way.

Get this: They wanted to CHARGE me $10 for $5 worth of quarters!

I was livid. I am Republican enough to understand covering business costs–I do understand why banks charge to cash checks if you are not a customer. What is so irritating is that they can so easily pass these costs onto consumers–unlike health care providers, for example–and we have no choice but to suck it up and take it unless we want to live with cash under our mattress. And they must be making money hand over fist because everyone, it seems, wants to go into banking–even now the Home Depot–see the article below from Realtor.Org.

So Wick, Christine, how about a bank at D Home? Maybe we can even get into the mortgage business? I can see that big red D now….D Bank!

Home Depot Applies to Acquire a Bank

On May 9, 2006, Home Depot agreed to acquire EnerBank, an industrial loan company (ILC), a type of state bank. The Federal Deposit Insurance Corporation (FDIC) must approve the proposed acquisition.

A loophole in existing law permits commercial firms like Wal-Mart and Home Depot to own ILCs. NAR is opposed to Home Depot acquiring a bank, consistent with its opposition to Wal-Mart’s application for deposit insurance for Wal-Mart Bank.

The Home Depot business plan is even more troublesome than Wal-Mart’s because it would use its bank to make loans to customers of home improvement contractors that are customers of Home Depot. This creates a conflict of interest because the Home Depot parent will have an incentive to encourage its bank to make as many loans as possible to increase its sales.

NAR will write to the Federal Deposit Insurance Corporation to urge it to hold a public hearing on the Home Depot application to acquire an ILC, not to approve the Home Depot application, and in any case to defer making a decision until Congress has an opportunity to decide whether it is appropriate to permit the mixing of banking and commerce under these circumstances.

CONTACTS: Jeff Lischer 202-383-1117, Lynn King 202-383-1156