ING Direct

As popular as it is, ING Direct’s parent company, Dutch bank ING, is having their fair share of economic problems.  In October 2008, they received a $10 billion euro bailout from the Dutch government.  ING is the biggest Dutch bank and insurance company, and is being rocked by credit defaults with the rest of the banking sector.  They announced plans today to sell $10.6 billion (8 billion euros) worth of operations, and focus mostly on its European operation.

What does that mean for those of us with accounts in global ING Direct?  Probably nothing.  ING does not plan to sell ING Direct, as it is the profitable arm of its operations in the Americas.  Your deposits in the US are still covered by FDIC protection up to $250,000.  ING is not being forced to sell their assets as part of a fire sale; they are choosing to do so to streamline operations.  This looks like a smart decision, and investors seem to agree.  Shares of ING increased on the news.

Source: Reuters: ING to shed up to $10.6 billion of assets

Shark Attacks Decline Worldwide in Midst of Economic Recession

Are you avoiding shark infested waters due to the recession?

It’s no surprise the banking industry supports the opt-out proposal while consumer groups want the rule that requires customers to opt-in. The American Bankers Association says not only is automatic enrollment better for people; it’s what people want. “Customers have demonstrated this is their overwhelming preference” says the ABA’s Feddis.

If that were true, then why aren’t we given a choice for opt-in or opt-out?  If this is about consumer preference, then let the consumer decide.  I agree with the bottom line – when making an electronic transaction, the bank already knows if you have enough to process or decline.

Then there was this whopper:

Many banks automatically process daily debits from largest to smallest. The banks say this is another customer service. Because the bigger amount is more likely to be a mortgage, rent or other important payment, they think customers would want those to go through and have smaller debits bounce.

Since many banks are not bouncing any transactions at all, this argument is completely disingenuous.  They reorder from highest to lowest, then charge a fee on each overdraft.  This might be true if customers could opt out.

When I was banking with Washington Mutual, I linked my checking account to my savings account.  When I made an overdraft, they withdrew the money from my savings, but still charged me a $35 fee.  I did not expect this.  I moved my accounts to a credit union.  There it works like I expect – if there was money in savings to cover the difference, there’s no fee.  I guess I opted out by changing banks.

While I have since reorganized my finances, there have been a couple of occasions when a shared account has gone slightly over due to spending more on groceries/dining out than we expected.  The credit union withdraws any excess from savings, so there isn’t a problem.  They HAVE declined transactions for us as well, in which case we used a different card.  Again, no problem.

Sure, an overdraft on a $3 coffee is irresponsible.  However, my take is a $3 overdraft shouldn’t suddenly put you in debt for $38.  If this kid wandered over to the comic book store after the coffee, he could have been looking at an $80 fee.  Because the bank processed his coffee transaction, he likely didn’t know he didn’t have the money until later.  Yes, he should take better care of his finances.  In order to do that, I’m sure he would choose ‘opt-out’.

I’m certain the number of opt-outs will be very disappointing to the banks.