I've never been a big admirer of SunTrust Bank. There are a lot of reasons but the best one is that I think it's unfair to take people's money when it doesn't belong to you. I believe that when a SunTrust client gives a man a paycheck drawn on a SunTrust account, the bank shouldn't then charge an additional $5 "cashing fee" to "the payee" but SunTrust likes to do that.
In my opinion that's unethical. The client (who already pays checking-account fees) wants the employee to be paid in full -- right? -- but SunTrust, as well as some other banks, nick the poor guy if he doesn't also have an account. So imagine my ire on Sunday when I read an interview with SunTrust regional vice president Rob McNeilly in the Nashville Tennessean.
The newspaper's finance reporter, Bobby Allyn, interviewed McNeilly about the bank's new debit card fees after it was just announced SunTrust, Regions and Well Fargo are now charging people $4-to-5 a month to use their debit cards.
A debit card works like a checking account -- you put cash into an account and, instead of writing a check, the card works like a credit card but no credit is involved. The money is guaranteed because it already secured in the bank. It is easier and safer to use than a check and actually saves the banking industry a lot of money.
At first the idea was that if a lot of debit card users had cash in the bank, the financial institutions would be able to earn interest on it. But all the banks got greedy and started charging retailers a "swipe fee." Then Congress slashed those fees last year in a financial overhaul package and the banking lobbyists went crazy, saying it was a "$12 billion-a-year gift to retailers." Please!
So here comes McNeilly in Sunday's Nashville newspaper, trying to explain what has happened, what occurs "when one revenue stream is diminished" and why "banks are getting creative." He says "banks had no choice" and said the debit-card charges have been carefully vetted through customer surveys so he doesn't expect a vigorous backlash from consumers. Are you kidding me?
Asked if he felt new debit-card fees would hurt lower-income customers, his answer was a classic: "Our clients can choose whether or not they want to use debit cards. We will have options available so our clients can minimize or avoid recurring fees." My goodness, this guy ought to be in Congress.
At another point he was asked if public opinion still treats banks with heavy skepticism. McNeilly said, "In the national press, banks have taken a hit to their reputation. One of the things we are trying to do is overcome that perception with a dose of reality. Our employees are volunteering with United Way and other organizations and getting paid for up to 16 hours of their volunteer work." (That's his answer -- I'm not making this up.)
Alright, let's veer away from Rob McNeilly for a different dose of reality. SunTrust's stock is down 44 percent for the year. At the start of 2011 SunTrust shares on the New York Stock Exchange were right at $30 a share and this weekend the same share was worth $16.91.
True, in March SunTrust paid back the $4.85 billion in bailout money it had gotten under the Troubled Asset Relief Program and, in Nashville, its commercial and industrial loans are 15 percent better than a year ago but construction loans are 52 percent lower than a year ago. That's because, as even McNeilly admits, "there is a lot of scrutiny."
But the clincher, reported by Bloomberg in late February, was that SunTrust CEO James Wells -- with headquarters in Atlanta -- got a 34 percent salary increase in 2010. Wells was paid $10.3 million last year alone, which I believe also needs "a lot of scrutiny," given the sluggish economy, SunTrust's unsure footing and now its unpredictable future.
Of course, Wells probably doesn't have a debit card and he hardly needs to "minimize or avoid recurring fees" like the thousands of SunTrust clients across the Southeast who once counted on a reputable bank to do what was best for them.
Let me give you some more reality. It's not right for SunTrust to nick "a stranger" $5 to cash a SunTrust check. It seems to me that's "double dipping" and, more often than not, the victim at the teller's window is helpless, but when SunTrust decides to start charging its valued customers to use their own deposits, I believe that's even worse.
If I were James Wells or Rob McNeilly, I'd look awfully hard at the fact SunTrust stock has plunged 44 percent this year. When greed becomes so great it causes bankers to begin to finally prey on the very people who made a bank what it is today, the same clients aren't going to put up with it.
You don't need a customer survey to know that.