Remember the 1993 Michael Douglas movie Falling Down? Directed by Joel Schumacher, the film is the story of an unemployed defense worker who has a breakdown because of society's ills, and as a result, he goes on a violent yet oddly cathartic for the viewer vigilante spree as he travels home. I'd like to suggest that Schumacher follow up the movie with Falling Down 2 only this time the protagonist is a homeowner who goes nuts because it took him almost a year to do a simple refi that cost twice as much as he thought it would and required him to fill out the same paperwork again and again. Later, the same guy goes shopping for a home equity line of credit, but decides to try a smaller, local bank, hoping for better customer service. But that experience is also fraught with problems. They misspell his name on all the paperwork. He spots it early and asks them three times to fix it, but when he shows up to what was supposed to be the closing, it was still misspelled, and as a result he can't close. This, of course, causes a complete mental collapse and the movie ends with him on the floor of the bank in the fetal position.
This story, I confess, bears a striking resemblance to my own travails in the world of retail banking. Chances are many can relate. These days complaints about banks aren't exactly rare. Just ask the Consumer Financial Protection Bureau, whose complaints database has topped 180,000. Or you can read the comments on the articles at Credit.com, the site I edit. We frequently hear from people who are at their wits' end, struggling to find answers and resolutions to their banking problems. Some people have trouble completing what they think should be straightforward transactions like a refi, while others may be dealing with debt collectors, nondischargeable student loans or errors on credit reports. All of these issues can create an enormous amount of stress for individuals.
I bring this up not to point fingers. From the financial institutions' perspective, these are complicated, highly regulated transactions, which require a number of steps that the average consumer likely can't fully appreciate. Anyone who has closed a mortgage and tried to read the HUD-1 knows that. Plus, none of us is above human error. I think, however, it's worth reminding financial institutions that these interactions can affect the psychological well-being of their clients. Often even simple transactions represent significant financial commitment and risk on the part of the consumer, and when the institutions err during the process, often over and over again, people can get really stressed out. And these all-too-common red-tape issues can seem insignificant compared with some of the stuff we've heard about from our readers and others.
There's the story by about a woman who was told she was responsible for paying off her recently deceased mother's old student loans. She told us she felt like the issue went into a bureaucratic black hole.
There's also the story of a Pennsylvania woman who was foreclosed on despite the fact that she was current on all but one of her mortgage payments. Her doors were padlocked, her utilities were cut off and, finally, her pet parrot was confiscated.
Or the commenter who says she spotted fraud on her credit card but couldn't get the bank to close her account, despite a multitude of letters and a trip to the branch. She asked, Why are banks so irresponsible for their errors and unwilling to be helpful?
These stories could all be made into movies, but those of us who work in financial news hear them all the time, along with the more pedestrian tales like the year-long refi saga. (To be fair, this column could easily be adapted to car dealers, cable companies and hospitals.)
The point is that these issues are far from unique. They happen in big financial institutions and small and they all take a real toll some obviously more than others. It feels to many that the financial institutions don't fully grasp the impact they have. Perhaps that's understandable. They are overwhelmed too and they deal with so many people in various states of distress, maybe they've become desensitized to it on an institutional level. But banks should remember that despite the necessary focus on balance sheets, liquidity, interest rates, tranches, and so on, they aren't simply in the money business. They are in the people business. We are the raw materials and without us all of us there is no business.