I recently received a Customer Satisfaction Survey from my new bank. They asked me to fill in lots of bubbles and they provided a few lines for my comments. Instead, I wrote them with this letter, which maybe someone will read and maybe no one will read.
But if, as we are often told, our most powerful function in this society is to consume (“so the terrorists don’t win” as Dubya put it), then fine: let’s inject some meaning into where we put our money and where we don’t put our money. The bank in question required a minimum credit score from new customers to open a checking account. I believe that policy oversteps the bounds of the consumer banking relationship. Below is the letter I sent them.
I was satisfied with Alpine Bank’s menu of products for consumers, as well as the treatment I received from employees at your Ridgway branch. However, I was unpleasantly surprised by Alpine’s policy of checking new customers’ credit scores as a prerequisite for opening an account. An employee explained to me that Alpine does this credit check to ensure that new customers “are not writing bad checks.”
Writing bad checks is a felony. A credit score is a record of the repayment of consumer debts, not of criminal activity.
I imagine that somewhere in the bowels of the banking industry, an actuary has composed an algorithm that correlates credit scores with something that your bank wants to know about customers.
However, the fact remains that in this relationship, it is I who am granting you the privilege of using my money for your investments. In return for that privilege, you service my financial transactions. You are not granting me credit, nor am I seeking credit from you. Your policy of checking my credit score is out of line with the nature of the banking relationship.
I do not write bad checks, but these days, my credit score is a thing of woe. At the end of my previous marriage I got left with a mortgage on a house whose value has fallen and fallen. I tried but failed to get it sold- several times over the last three years. So I paid the mortgage. And paid and paid and paid.
The bank which held this mortgage repeatedly and bafflingly refused to refinance the loan to a better interest rate. They said I didn’t “qualify” to refinance… meaning that they didn’t think I was financially capable of paying them less each month than I was paying them. Funny! Or, it would have been funny, in a bitterly ironic way, if I weren’t actually paying them a shit-ton of money every month on an increasingly worthless investment.
Prior to this financial crisis, I had sterling credit. I have done everything I could do to cover that mortgage. My lousy credit score is a partial record of the sacrifices I’ve had to make, and the unpleasant options I’ve had to take.
My story is typical. I asked the bank employee whether your policy inhibits your bank from taking on customers, and she conceded, “Hardly anyone has good credit these days.”
I relate this story to you for three reasons. First, I appreciate the willingness of the Ridgway branch’s employees to see my husband and me as human beings, and to listen to our circumstances rather than just staring at the scores on the page. This behavior was consistent with the way Alpine markets itself as a local bank, committed to local people. It’s refreshing when a bank’s marketing platform actually correlates with its business practices.
Second, I want you to consider the implications of your credit check policy: credit scores are made of many components, including some that are actually contrary to sound financial behavior. For example, my husband’s lack of recent credit activity weighs down his score, but is the result of our avoidance of debt, our efforts to pay off what debt we have, and our policy of living within our means. Those behaviors may not benefit the purveyors of debt products, but neither do they make us bad customers for Alpine Bank.
Finally, I am a person who pays attention to how I am treated by businesses, and I make consumer decisions accordingly.
Can we agree that it was the banking industry, rather than me, that created the financial crisis in which my house lost value, and jobs with good salaries disappeared? No? Given the shabby treatment I enjoyed from my lender, perhaps it’s evident that we cannot agree. My mortgage was a standard, 30 year fixed loan with a 20% down payment. The lender sent me through round after round of reapplication and rejection, frequently losing track of my materials and asking me to start from scratch. I will never forget when the mortgage broker told me, “We are not a charity.” As if I were asking for a hand-out instead of a fair deal… one that they kept advertising in glossy postcards that they sent to my house a few times a week.
That bank (and whatever banks they acquire, or that acquire them as they become ever more gigantic) will not have me as a customer again.
My husband and I will recover from the recession. We, along with millions of people like us, will invest our wealth. The institutions that treat us shabbily will be getting not one dime.