banks

Dear Banks: This Is Why Nobody Trusts You

/ Jack Marshall / 35 Comments

I know I’ve been hard on the Occupy movement, but I don’t want to let the protesters think that I’m pals with all of their targets. Take the banks, for example.

The “waiting for the check to clear” scam engaged in by banks has always been annoying, but I now realize, thanks to bitter personal experience, that we have been fools to tolerate it. Once upon a time, before electronic transfers and computers, it really did take a check at least “five business days” to go from one bank to another, but the banks have held on to the fiction that nothing has changed, presumably to give them free use of our money while we patiently wait for the completion of transactions that have already been completed. Running a small business with perpetual cash-flow problems, the Marshalls constantly hectored our bank (then Wachovia, which bought it from American Security Trust, and there may have been another one in there somewhere) about speeding up the process, and in fact they did: our checks from clients often had money available to us within a day or two. That’s right—the bank let us use our own money while telling less long-standing, savvy, or persistent customers that the checks they deposited were taking almost a week to clear. Continue reading →

Outrageous Corporate Conduct 2011: Transocean’s Unconscionable Bonuses

/ Jack Marshall / 11 Comments

"Sure, but other than THAT: great night at the theater, right?"

I believe that much of the time the corporate sector is unfairly treated by the media, politicians, and the public. Part of this conviction arises from my experience working at the U.S. Chamber of Commerce, directly under its current president when he was a rising young Turk. I dealt with corporate executives every day, and got to see the challenges of big business from their side. Most of the time, they struck me as genuinely concerned about workers, communities, fairness, while believing, of course, that an unfettered private sector was in the economic interest of everyone.

Increasingly, however, I see corporate behavior that is so arrogant, so transparently greedy, so contemptuous of the public’s intelligence, so blatantly, obnoxiously wrong that I wonder if it was all a dream. There was AIG, accepting billions from American taxpayers to save it from the consequences of its own fiduciary crimes, immediately spending some of it on lush retreats and parties for its executives. There were the leaders of Goldman Sachs, telling gape-jawed U.S. Senators that, no, they didn’t see anything unethical about selling their trusted clients investment products so awful that the company made money betting on their failure. There are the U.S. banks, hoarding their money and refusing to refinance mortgages that were unconscionable to begin with,  preferring to make the nation’s economic problems worse by foreclosing on families’ homes rather than making a good faith effort to undo a human and social catastrophe that was substantially of their own making.

Now comes the news that Transocean Ltd., owner of the Deepwater Horizon oil rig, has announced that it is giving millions of dollars in bonuses to its executives after “the best year in safety performance in our company’s history.”  Which seems perfectly reasonable, unless you want to make a big deal over that one little Gulf oil spill incident last April…you know, the one that began when a Transocean oil rig exploded, killing eleven people including nine Transocean employees. Continue reading →

The Kardashian Kard Saga: Proof That We Are Doomed?

/ Jack Marshall / 4 Comments

In “Terminator II,” there is  a scene in which young John Connor–desperately trying, along with his mother and the android killing machine sent from the future to protect the boy, to prevent the apocalyptic future that waits for him—sees young children gleefully pretending to murder each other with toy guns.  “We’re not going to make it, are we?” he asks the Terminator. “People, I mean.” The fact that a bank has chosen the Trashy Kardashian Sisters to promote a credit card aimed at teenagers prompts approximately the same sense of futility. At a time of crisis in which our culture that desperately needs to encourage responsible fiscal conduct led by financial institutions we can trust, this is what we get.

We’re doomed. Continue reading →

One More Reason to Distrust Banks

/ Jack Marshall / 2 Comments

National Public Radio did a feature on foreclosure auctions, following one real estate investor as he sought a bargain at an auction in Boston. The auction held a surprise for the investor, the reporter, and me. After the young man who was being followed by the NPR correspondent won a lively bidding battle for a $300,000 house at the bargain price of $84,000, the bank refused to sell it to him. The reason: the auction was a “reserve” auction rather than an “absolute” auction, meaning that there was an unpublished price at which the bank would sell the property, but winning bids below that amount could be rejected. The investor was angry. The NPR reporter was confused.

The auction was rigged. Continue reading →

The Ethics of Voluntary Mortgage Default

/ Jack Marshall / 17 Comments

Friend and reader Loren Platzman alerted me to the article, “Walk Away From Your Mortgage!” in the Sunday Times Magazine ( the magazine was, in fact, sitting unopened by my desk at the time. Some days, I just know that reading Randy Cohen’s “The Ethicist” column is going to ruin my weekend.) The thrust of the article, an installment in the “The Way We Live Now” series, is that American cultural tradition has reinforced the belief that there is something unethical and shameful about voluntarily letting the bank foreclose on a property when falling property values have placed the mortgage “under water,” meaning that the home is worth less than the amount still owed on it. Continue reading →

Ethics Quote of the Week

/ Jack Marshall / 2 Comments

“A lot of our folks have second and third homes and alimony payments and other obligations that require substantial current cash.”

—-A banker quoted anonymously by Stephen Brill in his essay, “What’s a Bailed-Out Banker Worth?” in the Jan.3  New York Times Magazine. The article discusses that financial industry’s rationale (or rationalizations) for its compensation culture.