Just checking in…

My disdain for the US Banking system should be obvious to anyone who follows my blog. Their attempts at modernizing, really are just “lipstick on a pig”.

While most countries are looking for ways to get out of the check processing business, and many to avoid it all together, using micro-banking and straight-through-processing to enable both a more effective user experience, and also reduce risk inherent in a real-time banking system. The UK even initially announced an end-date for the use of “cheques” in 2018, although that was later withdrawn. It’s still possible to transfer money between accounts in different banks within the UK banking system almost instantly and within 15-minutes, and for free.

Not so here in the USA. Much to my disappointment, I recently ran out of checks for my Texas FCU. It was the easiest and most effective way to pay some big bills for the construction work we’ve been doing, as well as bills for our wedding. I went online to the FCU and clicked order checks, it took me to an external website, where I was unable to order checks. Turns out the 3rd party had my address from when I first ordered 250 checks back in 2006.

You can’t change the address online, I had to call the FCU, they had to go through the update process and order the checks for me. Sure enough 8-dys later they appeared in my mailbox.

Mobile Ready Checks

Much to my “surprise” the checks have changed, just a little bit. They now include accommodation of the process which allows us to pay cheques in by taking pictures and submitting them on out phones via an app. I’m sure someone is feeling pretty smug, they’ve just invented pig lipstick.

Everything a consumer or non-financial institution does in terms of moving money around depends on the ACH, it’s not just checks, it’s pretty much anything online. Hey, but there’s an eCheck API.

Bloomberg had a good article on America’s addiction to checks back in July, by @kate_robertson – I think though they tackled it from the wrong angle, the reason people are addicted is because they work, and the patchwork of alternatives and restrictions on how they can be used has put them off if they’ve tried them.

My local credit union, Elevations FCU does a pretty good job at working within the confines of the American Clearing House and Federal Reserve straight jackets. Their technology is pretty solid, and their process limits, reasonable. Their mobile app has fingerprint sign-in, a good UI, and access to Popmoney, with useable daily and monthly limit. Their effectiveness and ability to innovate though is still hampered by the “system”.

My Texas FCU, Amplify, so mirrors their roots and seems incapable of escaping them. They started life as the IBM Federal Credit Union in Texas in 1967, and they’ve struggled much like their namesake to move with the times. While they have Internet/Web banking, I’ve had numerous problems and one acknowledged defect between their web and backend systems which frustrated my efforts to avoid paying by checks. They also claim Texas State rules prevent them from allowing various amounts above $1,000 in an out of accounts, especially Home Equity Line of Credit (HELOC) accounts.

Two small deposits

I’ve often commented on my absolute disdain for the US Banking system. I’ve been poking around with what I can do to remove some of the barrier to the time delay and inefficiency in the system.

I used my online banking system to add the bank details of a friend. I did it by adding it as an “external account”, providing the ABA routing number and the account number. It informed me that two small deposits would be made into the account, and once I had the details to come back and confirm.

I emailed my friend and said I’d done it and why, and asked to be notified when they arrived and what they were. Once notified, I confirmed with my online bank and immediately did an online funds transfer of $100, it arrived overnight. Next day, I initiated a transfer from my friends account of $50, again, it arrived overnight. I then did another transfer of $50, no problem.

So, while there is no way for me to do any formal set-up or account management, without a single signature, and as far as we can see, no way for my friend to stop me crediting, or more importantly debiting from their account. I’m hopeful that a call to the bank could stop it, surely?

For the record, we bank at completely different banks. Yep, the US Banking system truly sucks, 3rd world at best of function and performance. Out of this world on profits though…