Commentary –

Fleeing Fleet

By William A. Collins

Banker, banker,

Cut some slack;

I just want,

My money back.

Last year, Bob Kuttner, editor of the American Prospect, wrote a chilling article for the Hartford Courant about Fleet Bank. It seems that Fleet kept buying up the independent banks in Massachusetts where he was trying to escape them. The BankBoston acquisition pushed him over the edge.

Here in Connecticut we know the feeling. BankBoston used to operate here too, though for us the memorable Shawmut merger was even bigger. Our family, too, fled that one. But now it’s happening again. Fleet is buying Summit, a competitor that had surprisingly retained the good service of the local banks it, in turn, had bought. Well, we can kiss that service goodbye. The Summit branch we currently frequent is only a few hundred yards from the Fleet branch we had earlier escaped, so it’s a likely candidate to close. Our only hope is that the Banking Commissioner will make them sell it to someone else.

An official at rival Hudson Bank described the whole process with disarming candor. He liked the merger a lot, he said, because it meant “one less competitor.”

That’s it in a nutshell. Ironically, the deregulation of banking, which began in the Reagan administration, has resulted in less competition, not more. Well, perhaps “ironically” is not the right word. That suggests an unexpected outcome. But the promoters of deregulation did not actually expect more competition. They just promised it to keep us happy. If they had actually expected it, they wouldn’t have promoted deregulation in the first place.

For another example, try Broad Street in New Britain. Webster Bank bought the local People’s Bank in that town a few years ago, including the heavily Polish-American Broad Street branch. Webster promised to keep it open, and to retain the bilingual members of its staff. Now they’re closing it. It doesn’t meet Webster’s corporate guidelines for profitability. But still possessed of that blessed immigrant ingenuity, the good citizens of Broad Street are now organizing a credit union.

And Webster may actually be behind the curve. Some big banks now use slick software to help them manage their fee and interest schedules so that they can even make a bundle off poor customers. As long as low-income folks are willing to pay exorbitant fees for bounced checks and monthly maintenance, the bank is willing to string them along. Many residents just can’t afford that, and so they find themselves using check-cashing services and cookie jars.

As a wily practitioner of this art, Fleet took a lot of heat outside its last annual meeting. Representatives of the poor put on quite a show. They pointed out that Fleet now even imposes penalties for using tellers instead of ATM machines. Confirming this overall trend of skyrocketing fees, the Federal Reserve released a study showing that large interstate banks do indeed charge more than their smaller single-state rivals. It’s like that with credit cards too. Our attorney general recently concluded that Providian of San Francisco was similarly victimizing its Connecticut customers.

The ideal solution to these mean-spirited big bankers is to once again impose regulation. Fat chance. Our congressmen and senators of both parties are in their pocket. Bankers donate heavily to their political campaigns. Ralph Nader alone would support us.

In practice then, the only real recourse from this victimization is a credit union. The banks periodically try to kill them off, but voters like them. Unfortunately, they are often inconvenient, but they are honest and cheap, plus you can feel good about no longer being part of some bank’s rip-off system.

(Columnist William A. Collins is a former state representative and a former mayor of Norwalk.)