This is a test. It is only a test. A test to see if anyone is willing to think critically or if you will be triggered and lose all rational thought. Ready? Let's begin.

First, can we agree on what a bank does? A bank exists to turn a profit. It does not exist to give you stuff for free. It's not a charitable holding space. It doesn't pay tellers, processors, loan originators, or even instructional designers out of sheer generosity. It exists to turn a profit.

That means all of its offerings are designed to bring in money. Those CD rates? Yeah. It's offering you 2% because the bank can turn around and invest that money somewhere else and get a better rate of return. Those deposit rates? Same. And yeah, it does lend out your money to other folks at a higher rate. It works like DeFi does -- you get 5% for staking, but those poor saps taking out a loan? They're paying 6-10%. That's how you get your money, and that's how the bank gets its money. If you really hate the rates, understand that the bank bases its rates on the Prime rate, which is set by the feds.

Still with me? Now defending banking as a business does not mean that we defend everything that every bank has done. I think we can all agree that Countrywide was made up of some really sketchy people. It's obvious that Wells Fargo systematically pressured its folks to push stuff on people that didn't want or need it. Banking is like any other business. Sometimes banks (big and small) have done some pretty crappy things.

One of the worst things I think banks do, honestly, is charge overdraft fees. That's because overdraft fees hit people who already have no money when they're down. Worse yet, if you look at who tends to overdraft, it's almost always the bottom 25% of income-earners. That's predatory, and that's why at least some banks (Suntrust for example) have moved away from that model. There's more ethical money to be made elsewhere.

Another point - there's a huge difference in impact between a regional bank, a national bank, and an international bank. I think a lot of people angry about "banksters" are not really ticked at the president of their local 5th/3rd branch. They're angry at the people whom have way too much power and influence, and use it to do shady stuff. I completely understand. Too much power in the hands of too few is always a bad thing. However, the regional bank doesn't affect the course of a nation or a state like say Wells Fargo or VISA does. And credit unions are wholly owned by their members; who's to blame when they misbehave? :)

But banks have engaged in racial discrimination! Yes, the process of redlining has occurred. However, you need to really think hard if you think that's the only business that ever discriminated against people. You also need to think hard if you think that the law meant to remedy that (the Community Reinvestment Act) really did any good. In fact, it drove the subprime collapse, and the head of Fannie Mae committed suicide. Remember that? So applying a 10,000-ton hammer to fix a social problem didn't work out well. A lesson that I hope we bear in mind in the crypto space.

Lastly, do you think that banks (profit-seeking businesses, remember) really want to shove a bunch of weird laws and restrictions down your throat? The answer would be "nooooooooo". Nobody wants to do stuff that will make it harder or more expensive to do business. Those deposit restrictions courtesy of the Patriot Act weren't dreamed up by the industry, but by the US Congress. It's just more forms they have to fill out and track and hope they don't get audited. Now of course, will any big business side with regulations in hopes of absorbing the hit when they know their smaller competitors can't? Sure, and big business does that to small business all the time.

With all that said, banks as physical location, and as a way of doing business, are being eaten alive by fintech, online banks, and crypto companies. Outside of Capital One, I don't see anyone in this space even hoping to keep pace with technology. So don't worry. If you seriously hate banks, you'll be seeing a lot less of them in the future as the national and international banks swallow up the regional banks. It's like what happened to over-the-air TV - consolidation and then, thanks to technology and courage, an explosion of choices.

Banking is dead, but was it ever really the enemy?

Photo by Etienne Martin on Unsplash.