“And of course because this is a foreign check we’ll have to hold it for 5 days.  Which account would you like it held against?”  The question was absolutely serious.  And He of We was absolutely dumbfounded.  “Foreign?  Well yes, it does come all the way from Kentucky.”  And thus he found himself on the receiving end of a lecture, a real honest to gosh lecture, about how the banking industry works to protect our deposits.

She of We got her own lecture two weeks later when her credit union debit card was refused by a merchant because the bank had inactivated it.  It was very good of the bank to do so since it appeared that someone had possibly stolen her card numbers and attempted to buy something out of country.  But nobody told her.  She found out 3 days later.  During that time she attempted two local purchases which were refused and called the credit union.  She spoke with a live operator who suggested she try her card again in an ATM.  After the ATM was no more help than the live telephone version she went to the branch to inquire and was then told that her card had been suspended.

While She of We was waiting at the teller window another patron at the next window was having his own issues with cards and funds.  It seems he stopped at a gas station and “Paid at the Pump” with his debit card.  Forty-five dollars.  But his computer statement told him the account had been debited $70.  Where was the other $25?  And why was it not in his account where it would have stopped a check of his from being returned unpaid for which the institution charged him another fee.

If we remember all the details, a foreign check is one drawn against an account from any bank other than the one to which He of We was attempting to deposit it.  If that check should not clear we will be charged a fee for depositing a check that is not backed by sufficient funds and we’d be charged a fee immediately and thus place our account balance in jeopardy.  So it’s for our safety. 

Purchases against a debit card are transferred to the bank for approval and if it will be paid or not the merchant is apprised of that by electronic message.  Anywhere in the world.  Immediately.  For our safety.

Unspecified cash total purchases, such as a “pre-approval” to buy gasoline sometime in the future (and apparently sometime in the next 30 seconds of the pump reset is “the future”), is transmitted to the gas pump’s mini-computer with a predetermined spending limit.  Eventually, the predetermined already debited amount is re-credited to the account.  Probably for somebody’s safety.

It’s commendable that a bank would want to protect its customers from fraudulent transactions but we have some questions.  What if the debit card number thief had try to make a purchase in Hartford Connecticut rather than Hamburg Germany?  Was somebody ever going to contact She of We that she was walking around with a useless piece of plastic in her wallet?  Why isn’t the card holder made aware of the amount of held funds for pre-approved purchases and for how long they will be held?  And explain again why Kentucky is foreign? 

These are all accepted US banking practices protected by US and individual states’ banking laws.  A bank can hold funds guaranteed by a check for 5, 7, or 10 days until the issuing bank confirms there is money in the account against which the check is written.  That’s only good practice.  Good practice to hold the check until the receiving bank finds out if the issuing bank has the money.  Good practice for it to take 10 days if the receiving bank is planning on sending a representative by stagecoach to the issuing bank to collect the money. 

The rules were written before electronic funds transfers were common, before the average American had 3 phones and 5 e-mail addresses, before people traded in their folding money for a piece of plastic that is easier to carry, and if lost or stolen easier to report, manage and recover.  Why would anybody want to re-write the rules?  They provide the bank with the opportunity to use somebody else’s money for 3, 5, 10 days to collect additional interest for their accounts.  And after all, they protect our accounts.

When the banks can’t get enough by squirrelling away our money for a week or so they charge fees.  ATM fees, teller fees, call center fees, credit card fees, debit card fees, paper statement fees.  We read recently of a bank that tried to establish fees for using their website.  It was a monthly electronic access fee. The banking is free.  The accounts are “service charge free.”  However, if you want to find out how much money you have on deposit you have to pay a fee.

Used to be all banks were worried about was someone holding up the stage coach.  A banks real challenge now is measured by how to creatively phrase the next fee they will charge you and convince you that by paying these small fees translates into large balances later.  If you believe that, we have a bridge we’d like to sell you. 

But you have to pay the closing cost fees.  It’s for your safety.

Now, that’s what we think.  Really.  How ‘bout you?