Dear Washington Mutual —
I have been a loyal customer of yours for 10 years, if loyalty is measured only in terms of not abandoning you for another bank. I have often considered doing this, usually when you have treated me with disrespect or apathy, but I’ve always reminded myself that another bank would probably treat me the same way, so why bother changing? So maybe I’m not a “loyal” customer so much as I’m a “resigned” customer, or a customer who has “given up.”
At any rate, I’m writing to you because it seems that you are in desperate straits, and I want to point and laugh at your misfortune the way you have frequently pointed and laughed at mine.
Like many banks, you have been struggling because of the recent problems on Wall Street, which I do not pretend to understand. Well, that’s not entirely accurate. I do pretend to understand them. I nod my head and frown thoughtfully when I read news articles about the crisis, but secretly I’m thinking about Hot Pockets, and how I would like to eat some.
Now comes the news that you, Washington Mutual, have FAILED! In fact, you are the biggest bank failure in HISTORY! Panicked customers withdrew $16.7 billion in just 10 days, making you no longer solvent, and the federal government had to step in and seize you. Then JPMorgan Chase purchased your entire company for a scant $1.9 billion. If no buyer had been found and you’d collapsed entirely, you would have nearly depleted the FDIC’s insurance funds. In short, you are a burden on society and an embarrassment to the banking community. You are the Kevin Federline of banks.
You have no idea how delighted I am by this news. Your shareholders are wiped out, of course, but I’m not a shareholder. I merely have a checking account with you, the scant assets of which are safely insured by the FDIC no matter what JPMorgan Chase decides to do with you. Even if JPMorgan Chase turns every Washington Mutual branch into a homeless shelter for all your former employees, the money in my checking account is still safe.
You’re probably feeling very reflective right about now, Washington Mutual. You’re probably asking yourself, “Where did we go wrong?” A lot of people will blame your failure on the fact that for a few years there, you were giving out home mortgages the way the Special Olympics gives out medals. You were very promiscuous with those mortgages. You were giving them to people who obviously had no ability to repay them, people who didn’t have jobs, or collateral, or last names. Someone would come in and say, “I’d like a mortgage, please,” and you’d say, “Certainly, sir, what’s your name?” And he would say, “Seymour. Seymour Butts.” And you would say, “OK, Mr. Butts, here’s your mortgage! Pay it back anytime you like!” And he’d be down the street before you realized it was a fake name, but you figured, hey, what the heck? Let ol’ whatever-his-name-really-is have a mortgage!
So that’s what most people will attribute your collapse to. You were too free with your money, you lent it to people who you knew could not repay it, and then, sure enough, they could not repay it. It’s as obvious as it was completely preventable. But I think your failure is more attributable to something else. I think it’s because of the way you have treated me, Eric D. Snider.
I get credit card offers in the mail all the time, including about three a week from you, Washington Mutual. Like all credit card offers, yours assure me that I am “pre-approved,” a term that, at this point, fools no one. Surely by now everyone realizes that the pre-approval process merely involves learning someone’s address. If you have an address and a mailbox, you are pre-approved.
How do I know that “pre-approved” doesn’t mean anything? Because I have terrible credit. I ruined it in the folly of my youth. Even a cursory glance at my record would show that I should not be pre-approved for so much as a Target gift card, let alone a credit card. I shouldn’t even be allowed to order food at a restaurant without paying for it up front. If I actually applied for one of these credit cards for which I am allegedly “pre-approved,” I would be turned down. This is why I no longer have any credit cards. I don’t want them, and even if I did, no bank would give them to me.
That being said, I’m pretty sure I could have still gotten a mortgage from you.
Anyway, none of this stops you, Washington Mutual, from sending me three credit card offers a week. It also does not stop you from having your tellers try to sell me a credit card every time I go into a branch. This is demeaning to the tellers, and I’m sure they hate it. They are reduced to making the same kind of pitch that fast-food employees are forced to make. (“Welcome to McDonald’s, would you like to try the new McRib sandwich?” “Thanks for making a deposit, Eric, would you be interested in applying for a Washington Mutual MasterCard?”)
Moreover, it seems a little curious to me that a bank — an institution that is supposed to encourage financial prudence, careful investment, and economic wisdom — is pimping credit cards. Credit cards encourage risky, unwise financial behavior. A bank trying to foist them upon its clients is like a doctor trying to sell his patients cigarettes.
The offers you send me in the mail must cost you a total of about a dollar a week in postage, not to mention the paper and printing. We’ll say it’s around two dollars all together. That’s $104 a year that you might just as well have set on fire. Then, when I tear up the offers and mail them back to you in the postage-paid envelopes you provide, that costs you about another dollar a week. So we’re looking at something like $150 a year that you spend in your attempts to give me a credit card — a credit card that I’m NEVER GOING TO ACCEPT and that you WOULD NEVER ACTUALLY GIVE ME ANYWAY!
Washington Mutual, this is very irresponsible of you. Believe me, I’m a Generation-X American — I know what irresponsible financial behavior looks like. In fact, you have frequently punished me for behavior far less reckless than that. Shall we discuss the incident of the Balance Transfer? YES. WE SHALL.
A few months ago, I had $350 in my Washington Mutual checking account, and I transferred $300 of it to my Paypal account. I do this sort of thing regularly, and it always takes about three business days for the transfer to be completed, don’t ask me why. I mean, it’s not like someone has to physically carry a sack of money from Washington Mutual to Paypal. There’s not a stage coach conveying gold bars across the Indian-infested prairie.
Anyway, while the transfer was being processed, a check for $100 that I’d written months earlier and forgotten about finally went through, reducing my Washington Mutual balance from $350 to $250. It was too late to stop the Paypal thing, though, so when it came along the next day to take $300, you went ahead and gave it to them, thus overdrawing my account by $50 and allowing you to charge me a $35 penalty.
Obviously, this was my mistake. I had overlooked the $100 check. But it seems to me that if I try to transfer a balance of money that I don’t actually have, something in your system should say, “Hey, wait a minute! You can’t move $300 to Paypal! You don’t HAVE $300!” If I had walked into a Washington Mutual branch and tried to withdraw $300, the teller would have said, “Actually, you only have $250. Did you know that this check cleared yesterday?” And I’d have said, “Oh, my stars! I did not! Thank you for alerting me!”
I explained all of this when I called your customer support and said I thought the overdraft fee should be reversed. If I had realized I only had $250, I wouldn’t have withdrawn $300. Your people said that the system is set up this way because sometimes people WANT to overdraw their accounts. They know they only have $250, but they need $300, and it’s important enough that they’re willing to pay the $35 overdraft fee.
I said I could see how this would happen occasionally, but shouldn’t there be something in the system that says, “Are you SURE you want to do this?”? Just as a courtesy to your customers, you know. Just to let ’em know that you’re lookin’ out for ’em. Of course, this would result in fewer overdraft fees being charged, which is probably why your people seemed baffled by the idea. It didn’t make sense to them: Provide better customer care AND make less profit? That’s a lose-lose scenario.
And now, guess what? You’re a laughingstock. You had to be rescued, at a tremendous loss, by your former competitors at another bank. You were absurdly reckless with your money, and now nobody has any sympathy for you. How does it feel, jerkfaces? I hope that $35 you got from me helped tide you over!
Eric D. Snider
Proud JPMorgan Chase customer since 2008
True fact: I was going to write about Washington Mutual's constant attempts to sell me a credit card anyway, and then the collapse happened and made the whole thing more timely. I appreciate Washington Mutual's consideration in failing just when it helped me the most.
I don't remember where I got the idea of tearing up credit card offers and mailing them back at the sender's expense, but I wasn't kidding when I said I do that. It's very therapeutic. I know it has no effect whatsoever, and that it's some poor sucker at the processing center who has to open an envelope containing a shredded credit card offer. Nonetheless, it makes me feel better.
Image source (and inspiration for the column title): the Internets. No idea who created it, but I'm glad to give credit if the original source contacts me.
SnideCast intro & outro: "Fidelity Fiduciary Bank," from the "Mary Poppins" original motion picture soundtrack.