Are Banks The Modern-day Marie Antoinette?

Is there such a thing as a financial institution that is interested in social good, or one that puts “customer-first?” It isn’t a rhetorical question. I’m really asking. 

It seems that few days go by when I don’t open up the paper (yes, I still get the printed version The Wall Street Journal delivered to my doorstep) and see yet another financial services company being caught, or indicted for doing something completely counter to the social good, and not in the best interest of its customers. This morning, it was ING Bank that agreed to pay a record penalty of $619 million for illegally moving billions of dollars through the U.S. Banking system on behalf of Cuban and Iranian clients and threatening to punish employees if they failed to conceal the origins of the money. Now, one could argue that they were putting “customer first” as they laundered money for these clients, but of course that’s not what I am talking about.

Consumers are slaves to the system.

In our society, we are beholden to banks and other financial services companies to conduct life and business in an orderly fashion. You can do virtually nothing without credit cards and bank accounts; lines of credit and mortgages. In fact, several countries seem to be doing away with cash money all together.

So, in a society where consumers must interact with banks to move through a normal daily life, what is the motivation for banks to care about consumers? Competition usually sets rules of consumer service, but with few banking choices most of us do business with a small fist-full of mega financial institutions like JP Morgan Chase, Bank of America, Wells Fargo and Citibank. And sadly, the smaller banks don’t do much better. You need to go no further than Andrew Ross Sorkin’s Too Big To Fail to see what a hold these mega organizations have over our society. Or, examine how the banks colluded in the Sub-Prime Banking scandal that brought the country financially to its knees, and threw hundreds of thousands of families out on the street in foreclosure after giving them loans they knew they could not afford.

A broken bond.

The reality is that the bond between banks and consumers is broken. There seem to be few examples of banks putting customers first, therefore consumers must not trust banks to do the right thing, or anything in their best interest.

Many who critique the financial industry say that it is bank’s job to make money first, rather than pay attention to their customers. And others who cry “socialist” any time the issue of governmental regulation is raised. But if consumers are beholden to the system, how can they vote with their feet and change a system that cares nothing for them? Consumers appear to be voiceless participants in a broken system. This feels like a system without consumer representation.

My mom calls bank behavior “criminal”—she uses the word as hyperbole to demonstrate her outrage at an industry that in “her day” (she’s now 76) used to give at least the appearance of providing a service to customers. With fees for everything from cashing a check to paying her mortgage via the phone—who is serving who?

I recently re-financed my house, and decided to hire an attorney to handle the details--to fill out and read all the documents, and handle all discussions with the bank. He was my advocate to try to level the playing field of an industry too often caught with its hand in the cookie jar.

“Let them eat cake.”

Has the financial services industry become the hated dictator, or ruthless monarch that does nothing for its people other than take their money and demand they are subservient to the needs of the bank? Are banks a modern day Marie Antoinette and consumers people who have no bread to eat?

I’m not a financial industry guru or pundit, so don’t expect an answer from me. I’m just asking the question— Is there such a thing as a financial institution that is interested in social good, or one that puts “customer-first?”

And what if there were.

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