Since the financial crisis this has been a very hot topic. Because it fits well with my “FIRE Wall Street” message and recent banking scandals I thought I’d take a minute to inform my readers. So here are 3 reasons you should fire your banker:
- Banks don’t work like they used to. Back in the day, banks used to take your deposits and lend them to your neighbor to buy a house or a car. They made money on the difference between what your neighbor paid them and what they paid you in interest. The money stayed in the neighborhood and everything was hunky dory. Today, the big banks take your money and do all kinds of crazy stuff with it (see below).
- By supporting big banks you’re enabling and endorsing their bad behaviors: manipulating interest rates, risking your deposits in prop trading and massive portfolios of derivatives, seizing homes they have no right to by using corrupt and unjust foreclosure practices, stealing your money to meet their own obligations, etc.
- By working with a community credit union you will keep the funds in your community and get products and prices that are typically much better than those offered by the big banks. And because they are not-for-profit they have no incentive to screw you like the big banks do.
Vote with your wallet. Fire your “too big to fail” banker and join a credit union. It’s a win/win.