Passing the Buck

by Ron Daly 

Wonder why the largest banks in America continue to post profits during these trying times? It’s because they are great at passing the buck (or the bill) on to consumers and small business owners alike. While we were all focusing on the Credit Card Act of 2009 the past few weeks, a story came out on how some banks are sending bailout bills to biz customers (click here).To summarize...

In May, the Federal Deposit Insurance Corp. (FDIC) assessed the nation's banks $5.6 billion to restock its insurance fund after costly bank failures, reported Dow Jones News Service (July 29). It was noted that JPMorgan Chase & Co. paid $675 million out of second-quarter earnings and Wells Fargo & Co. paid $565 million. "But those two banks, along with many others, are passing their FDIC bills to some business customers," the article said. Other banks are burying the cost in the compensating balances at they are requiring business accounts to have in their accounts. 

 Looks like another great opportunity for credit unions to outshine banks when it comes to business banking. Small businesses can’t get the working capital they need to grow and they are getting slammed by fees and poor service. 

How can the CU industry simplify business banking and take advantage of the ill will small business owners have? Are CUSOs like the one in the news this week (click to read about Small Business America), which offers member business loans, deposits and other services to small businesses the answer? 

The questions that linger in my mind as small business owner and loyal credit union fan - Why do credit unions continue to sit on the sidelines when opportunities present themselves? And, for those CUs in the game - Why do we make it so hard for business owners to use credit unions?