With the recent collapse of the Silicon Valley Bank (SVB), people are waking up to the fact that the banks don’t actually have their money in their accounts. If I had a Liberty Paige bank account with $1000, there would not actually be $1000 in the bank vault in my name. It’s just a bunch of digits on a computer and that $1000 is used to loan dollars out to other people and businesses, for bank investments and for many other things. It’s basically an account with an IOU and you hope that when the time comes, like with Social Security, there is money available.
I have never actually had a “bank” account because banks have too many rules and charge too many fees. I have always had an account at a credit union. But it’s really not much different in how they use our funds. And being on the board of a local credit union, I have learned even more about how the financial sector operates.
In my opinion, the average person does not actually need a “bank” or a credit union. We just need somewhere to cash our paycheck and a way to pay bills and spend money. I really am not all that enamored by the $1.42 in interest I made on my account last year. I just need a way to conveniently transfer money in and out of my account.
There should be businesses that just do this for people – transfer money back and forth – for people who have less than $10K going in and out of their account each month. If people need loans or want to invest in CDs or have a retirement account or want other products, that’s where banks and credit unions can come in. But I don’t think it should all be tied together in one institution.
Maybe this is a pipe dream and not doable in the real world. Maybe it would destroy the economy if all of us poor folk took our money out of banks and credit unions. Maybe there’s no way to do what I want because maybe this new business wouldn’t be able to make a profit off of us and stay in business.
I’m just saying that there are a lot of us who only need to cash a paycheck, pay our bills and use a debit card tied to our account and nothing more.
I don’t want to be beholden to the government and their rules and their interest rate changes and then POOF – my money is gone or I’m not able to access it. I also don’t like the fact that banks and credit unions are buying products like CDs and making investments with “my” money.
And some banks and credit unions are willing to be more risky than other, including the idiots who buy into the ESG scam (Environmental, Social, Governance) which totally goes agains their fiduciary duties of acting in the best interests of their members. ESG means scoring companies and people and funds based on whether they adhere to priorities of the Democrat party like equity and climate change policies – not by financial measures.
With ESG priorities in place, there will be more bank failures in the future – not to mention pension failures since President Biden signed an Executive Order allowing pension fund managers to base investment decisions on ESG scores.
Why would anyone want to be in a bank who embraces ESG? That means they can prioritize loans for companies with high ESG scores, invest in “green” bonds, waste time and money on green economy teams within their organizations, waste money on becoming low-carbon organization and invest in companies with high ESG scores regardless of their ability to return any profits to anyone.
SVB was such a bank. The Daily Mail  says they hired a board who was “obsessed with diversity” and planned to invest $5 billion for a “healthier planet” by 2027.
That’s definitely not something I want to be involved in and it’s a road to disaster for the economy of the United States. If that is the wave of the future, I’ll go back to cash.