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 The UK even initially announced an end-date for the use of “cheques” in 2018, although that was later withdrawn.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.

Laughing at US Banks

aka too big to do anything useful.

So, most mornings lately, during breakfast, Chase Bank has been running these commercials on TV. Yep, they are selling their bank on the basis of being able to make easy check deposits. Most US Banks and Credit Unions provide some form of ATM check deposit, similar to this…

no-checks-400x506[1]So while most western countries are running from checks as fast as they can, some have even announced the end of checks/cheques as we know them, the US is not only persisting with the check model and clearance process, they are making ATM’s better at accepting checks and spending money to promote it.

Meanwhile, I can login to my UK Bank, and for free, transfer money to my Son in Berlin in a different country, and different currency and it is in his account in about an hour. To send money to people in the UK, it’s even quicker, less than 15-minutes on average. I’ve had the account for nearly 15-years and not had a checkbook for the last 12-years.

The easiest, simplest and by far thecheapest way for a person in the USA to send me money is to write a physical check, take a picture of the check on their cellphone, and email me the picture. I remote deposit it in either of my USA Bank Accounts. Way to go USA.

Check’s in the mail

Another frustrating, and wasted effort trying to deal with my FCU over online/electronic payments. I tried to set up an online payment to pay my Attorneys. They gave me all their banks details and double checked they could receive online payments. I went online entered my Attorneys details, it asked for the account number but not the ABA Routing number.

I asked online via chat and then in person while at a branch doing a wire transfer today, both reps from the bank confirmed that when I made a payment, the payment would generate a check; the check could be mailed either to the bank, or to the attorneys office depending on what address I used.

I got back on chat, to keep a record, and ask the agent, Shannon about Bill Payer. She insisted it was a dept of the bank rather than a 3rd party service, gave me a number to contact them along with a 5466 extension. I repeatedly asked for the name of the person who owned the relationship with Bill Payer, she insisted it was a dept and I call them. I called, the extension I was given wasn’t valid. I called the FCU, spoke to Cindy. Asked the same question, she said that extension was internal use only; said it was a 3rd party provider and gave me a 1-888 number to call.

I called, it turns out at least after a long validation that it is indeed a dept. of the bank, or at least that’s what the woman who answered said. She was unable to actually help with a list, frankly either because of my accent, or for some other reason, she kept saying OK sir when I asked questions. Finally I specifically asked if she was an FCU employee, she said she was. When I asked what service the FCU used for their Bill Payer service, she didn’t seem to understand the question, and said I see, OK Sir. I asked again, saying is it checkfree or similar because the FCU wasn’t listed on their website.

So, a wasted effort. It seems the only way I can pay a bill from one bank on Congress Ave in Austin, to another bank on Congress Ave in Austin, is either to write the check myself, or go online, put all the payee details into the FCU bill payer service, which then prints a check overnight; sends it the next day, that the post office gets that night; it gets delivered the next day(if you are lucky); the receiving bank then scans in the check and OCR’s it; and sends via the ACH for 7-day clearing… it’s like the 1990’s didn’t happen…

I really want to be wrong about this and have written to the FCU Vice President – Information Technology and Software Development. I’m afraid otherwise I need to go back to one of the big banks, which be a real shame.

ACH – We got ya by the checks

The Planet Money podcast has a great summary of the topic I was frustrated and grumpy over about 15-months ago, the US Payments clearing system, known as the Automated Clearing House. which I discussed in a follow-up comment to this post.

Except, they really didn’t get to the bottom of the problem. I wrote in a comment on their facebook page, here, but figured I’d post my comment here as well.

“I was excited to hear this and actually set aside time to do it via the podcast. Your description of the problems and the explanation of the ACH was right on the “money” but then you let it slip through your hands.

Yes, the US System has a scale issue compared to the UK. But does the US system have problems with credit cards? No. Which is a much, much larger scale. The difference is with credit cards the banks are lending us money, with bank payments they already have our money so it’s in their interest(pun intended) to make it hard for us.

You really dropped the ball when you got to the end of the piece and discussing local banks. It’s as if you accepted that local banks and financial institutions don’t have computerized records, they still pay people to write entries and process checks using ledgers.

Please consider doing a follow up show. I’d be happy to contribute, I have a ton of knowledge and background, I was part of the first online banking project, Pronto at Chemical Bank in the early 1980’s where even then we were complaining about the way the ACH was implemented. I went on to work at IBM, for whom I taught COBOL programming as part of a workshop in Atlanta for college graduates… I can also explain how COBOL is not really needed anymore and why that is to a degree another fallacy foisted on you/us by the banking industry as a reason they can’t change.”

The Bike Through Bank

New tube Sir?So, as I pulled into the drive through ATM at the Amplify Brockton Branch yesterday to deposit two checks, worth combined less than $2, something grabbed my attention out of the corner of my eye. Yep, there was a guy on a bicycle in the drive through bank.

Apparently it’s not all that uncommon, all I know is I laughed hard until I started to try to deposit the checks. Here is a zoomed version.

No Hassle Cash – My foot

I’ve got one of those CapitalOne No Hassle cards, instead of getting worthless points, I get cash back based on how much I spend. I can use that “cash” on the same sort of useless purchases as I could with worthless points, or I can request a credit in my CapitalOne card account, or, yes, a check. I elected to just get the credit, $67.18 as an account credit.

Seemed like a good thing, I clicked, confirmed etc. and then got the message

Order Number: 19330721
Order Date: April 4, 2012
Estimated Posting Date: 5-7 business days

I guess they send themselves a check, after all an electronic transfer couldn’t take 5-7 business days, could it?

Less than a buck, WTF

I continue to be amazed, saddened and I some ways angry about the inefficiencies in the US Banking system and the inability for big financial institutions to see how much this is costing the economy.

I’m sat in line for a drive up teller, coz the bank closed at 4:30 or 5pm, whatever, that’s not the point. The point is I have two checks to deposit, one for $0.07 from an IBM Share account I thought I closed 2-years ago, and the other, as attached my US GOVERNMENT TAX refund.

You’d think the government would save its money and the banks by just carrying this amount as a credit into the next year, or at least do a electronic credit. I could just rip the check up and let the government have the money but it doesn’t work like that in account the money just gets held in a suspense account for nearly ever.

Lets not even get started on how crappy the admin is behind the IBM share system that has been issuing ever decreasing amounts for the last 16-months…

The problem is the paper check. Its like many other things, when you don’t think the the system is broken, you can’t see how things could be. If nothing else, the processing banks, ie where I’m depositing the checks should be able to levy a processing charge from the issuing account, but not from mine. If issuing a check for $0.07 is the best they can do, and processing it costs $4.50, then they should be charged $4.57

Ps. If anyone from Amplify Credit Union is watching, that’s me sat out in the parking lot, your ATM workflow sucks if you are depositing more than one check. Oh yeah tell Sheryl I’m still waiting for a reply…

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