A ‘hold’ for you, interest for the bank
.floatimg-left-hort { float:left; } .floatimg-left-caption-hort { float:left; margin-bottom:10px; width:300px; margin-right:10px; clear:left;} .floatimg-left-vert { float:left; margin-top:10px; margin-right:15px; width:200px;} .floatimg-left-caption-vert { float:left; margin-right:10px; margin-bottom:10px; font-size: 12px; width:200px;} .floatimg-right-hort { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 300px;} .floatimg-right-caption-hort { float:left; margin-right:10px; margin-bottom:10px; width: 300px; font-size: 12px; } .floatimg-right-vert { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px;} .floatimg-right-caption-vert { float:left; margin-right:10px; margin-bottom:10px; width: 200px; font-size: 12px; } .floatimgright-sidebar { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 200px; border-top-style: double; border-top-color: black; border-bottom-style: double; border-bottom-color: black;} .floatimgright-sidebar p { line-height: 115%; text-indent: 10px; } .floatimgright-sidebar h4 { font-variant:small-caps; } .pullquote { float:right; margin-top:10px; margin-left:10px; margin-bottom:10px; width: 150px; background: url(http://www.dmbusinessdaily.com/DAILY/editorial/extras/closequote.gif) no-repeat bottom right !important ; line-height: 150%; font-size: 125%; border-top: 1px solid; border-bottom: 1px solid;} .floatvidleft { float:left; margin-bottom:10px; width:325px; margin-right:10px; clear:left;} .floatvidright { float:right; margin-bottom:10px; width:325px; margin-right:10px; clear:left;}
Dear Mr. Berko:
I recently deposited a $19,525 Wells Fargo check in Chase Bank, which used to be Washington Mutual, where I had my checking account for nine years. The teller told me that they were putting a 14-day hold on the Wells Fargo check. I never had this problem at Washington Mutual. Well, I needed $11,000 from this check in seven days, but the teller said no funds for 14 days because it takes that long for Chase to process that check and collect the money. I talked with the branch manager, and I was given the same story, that it takes 14 days to process the check, but Chase could lend me the money until the Wells Fargo check clears. I told the manager that this was not acceptable. The manager got real huffy with me and told me that I could close my account and move it to another bank. I called my lawyer, who said that Chase sets the rules, and I have no alternative. How can Chase get away with this? Is this fair? Am I the only one who has complained about this? Now I’m so mad that I’m going to sell my 150 shares of JPMorgan Chase Co. that I bought early last year at $23 on your recommendation. I would like to have your response to this unfair practice.
G.R.: Punta Gorda, Fla.
Dear G.R.:
First of all, I did not recommend JPMorgan Chase Co. at $23, but I wish I had. And second of all, don’t for a Sioux City second believe that it takes JPMorgan (JPM-$41.92) 14 days to clear a Wells Fargo check. Chase clears that check overnight. The teller may not know it, but the branch manager knows checks clear electronically, and in the time it takes an electron to circle an atom, that $19,525 is credited to Chase’s master account.
Consider the following: Have you ever written a Chase check to someone on Tuesday, which is deposited with Wells Fargo on Wednesday, and on Thursday Chase tells you that there are insufficient funds in your account? Then, POW, they ding you with a $40 BCSC, or a Bounced Check Sucker Charge.
Frankly, that Chase manager is a bleeding liar, and he’s paid to tell you that lie. His branch places a hold on that Wells Fargo check, earning 14 days of interest on your $19,525 deposit. Now multiply your incident by tens of thousands of daily delayed deposits and that accumulates to many tens of millions of dollars of interest income to Chase each year. But when Kraft or McDonald’s deposits $100 million in a JPMorgan Chase checking account, those funds clear just a little slower than the speed of light.
Chase and other banks get away with this because tens of thousands of schnooks like you are too timid to bite a biscuit and take corrective action. Chase knows this and doesn’t give a hoot in Hoboken what you think. They know that most depositors are powerless to complain or react. However, there are some excellent smaller banks in Punta Gorda that dearly want your business and won’t treat you with such cold contempt. So I suggest that you and others who don’t care for Chase’s tactics vote with your feet.
But do not sell your JPM stock. For the foreseeable future, JPM will continue to siphon billions of dollars from mooks like you. JPM is a well-oiled, politically connected money machine, and like Goldman Sachs, it can do almost anything it wants to do.
JPM employs 240,000 folks at 5,125 branches in 50 countries and has more than $2 trillion in assets. Yes, that is “trillion” with a “t,” and many congresspeople are mindful that JPM can make or break an election.
Now, although JPM’s credit card business is losing billions, and consumer loan losses remain high, its Capital Market group is gaining strength; its trading activity (which controls the price of oil, gold, copper, etc.) is raking in billions; retail margins are expanding; profits from Washington Mutual will soon enrich JPM’s income statement; and its asset management segment is bringing in the bucks. JPM has repaid its government loan. Its equity capital ratios are healthy; return on shareholders’ equity has improved quite nicely; and the shares trade just a bit above the $40 book value.
JPM is on track to earn $3.05 per share this year and may increase its 20-cent dividend to 65 cents. The Street expects JPM’s earnings, dividends and book value to grow nicely in 2011. So the Street’s consensus is that your 150 shares could ratchet up to $55 or $60 in the coming 18 months. Keep the stock, but change banks if you would like to be treated like a valued customer rather than a piney woods redneck.
Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, Fla. 33775 or e-mail him at mjberko@yahoo.com. © 2010 Creators.Com
Trending News
