Why Wall Street should pay attention to Occupy Wall Street

Occupy Wall Street is now a favorite subject for the media. They seem to vacillate between admiration and disdain. Certainly Fox News leans more towards disdain while MSNBC is more open to examining their complaints. I hope that Wall Street is paying attention. Whether you like them or not, Occupy Wall Street is one symptom of a greater issue – falling confidence.

Each month consumer confidence is reported as an indicator of expected future economic performance. Confidence in the value of the dollar is evidenced by foreign currency exchange rates. Confidence in the Federal Government is reflected in surveys with the general public and by investors with the yield rates on treasury bills. Confidence is a valuable indicator and positive economic outcomes in the long run require confidence – the confidence to spend, the confidence to borrow, he confidence that you will have a job and the confidence to invest.

The Occupy __ (fill in your city) movement is, fundamentally, about fairness; the belief that the economic system is not fair to most people in the United States. Protestors believe that if you work hard to get an education and a job, that you should be able to prosper. The reality they see is that people in finance who game the system have prospered enormously while following the rules may leave you jobless and in debt. They believe that if you should start to get ahead, the financial system is set up to fleece small investors while the powerful prosper at the rest of society’s expense. That is, they have lost confidence in our economic system.

As long as that loss of confidence is limited to scattered encampments in large cities around the country (and world) the protestors are merely a noisy distraction to Wall Street, and perhaps a tourist draw for the curious.

But surveys taken since the beginning of the protests indicate that the OWS movement is the true cutting edge of a wave of dissatisfaction with the direction of our country. TEA Party groups blame the government for their dissatisfaction, while OWS blames greed and the influence of money on the political process.  Both groups know something is wrong, and the OWS movement has been growing in influence.

Our stock markets require investor confidence to attract capital. No investor will send money to his broker with the expectation that he will be fleeced. As more investors examine the arguments of the OWS movement, they may come to agree that the system is rigged against them. If this results in dollars slowly being pulled out of the market, then Wall Street ignores the complaints of the OWS movement at its peril. This loss of confidence will likely not result in a run on the markets, rather is would be evidenced by a slow decline as individuals come to the conclusion that the American dream does not flow through Wall Street.

Is Occupy Wall Street the tip of the iceberg or an annoyance to the wealthy? The public is now focusing on the growing income gap and time will tell.

They wonder why we don’t like them

With the ongoing Occupy demonstrations going on around the country, I’d like to tell two stories about working with banks. Neither of these stories involves large sums of money or great issues, but it is the little things like this that leave us with a negative attitude towards financial institutions. Issues of substance are now magnifying that attitude.  

The refinancing

About a year ago I decided to refinance my house to take care of lower interest rates. I was not taking any cash out, nor was I lowering my payments. The only objective was to cut down the repayment term to pay the house off faster.

I immediately locked the interest rate for 90 days and sent the requested document dump to Bank of America. Then I waited. After a couple of weeks I got an additional document request from a new loan officer. My first contact was no longer on the transaction.  My second loan officer only lasted one day, having apparently left the company about the time that my folder landed on her desk. There was a mix up with the third loan officer, and my refinancing ended up on the desk of a fourth person.

By this time the bank had lost many of the original documents and I was asked to resend them. Several times.

The fourth loan officer was not on the scene long, nor was number five. Because of the churning of the loan officers Bank of America had to extend the 90-day rate lock. Upon the extension I had to update all of my documentation. 

After four months and six loan officers we closed the loan. The final insult of this story is that at the closing we were given the option to have our checking account automatically drafted each month to pay for the loan, and the bank would only charge us $4.00 extra per payment for the honor.

I’m an accountant. I know that the ACH transfer that the bank would use to draft our account is much cheaper for the bank to process than the paper check we would be sending. Yes folks, the bank was charge us $4.00 per transaction to save THEM money. We declined their generous offer.

The checking account

Until last week I had a checking account at Citibank. Two weeks ago I received a notice in the mail that Citi was raising its service charge on checking accounts to $15 per month. The letter also let me know that as long as I maintained a minimum savings balance, I would not be charged – and congratulations I had that minimum balance. After a checking account is set up maintenance on the bank’s mainframe has a negligible cost. I could understand a per check charge – processing checks costs money. But $15 per month just to maintain the account is unconscionable. Although the account would have cost me nothing, I have now closed my Citi checking and savings accounts and am one of the newest members of my local credit union.

We all have a choice. Don’t let yourself be treated like a sheep to be sheared. Don’t do business with companies that don’t value you as a customer.