Flush Your Money Down the Drain!

BlueStem Winery is a full-service Iowa winery which also sells Cellar Craft and WinExpert wine kits plus winemaking equipment, wine making supplies and ingredients, homebrewing supplies, beer brewing equipment and home brewing ingredients.

But . . . in a prior life, I was a commercial banker for most of my working lifetime (26 years). I graduated from the University of Northern Iowa, served 4 years in the United States Air Force where I flew 126 combat reconnaissance missions out of DaNang, South Viet Nam (winning a Distinguished Flying Cross and 4 Air Medals), held a top secret signal intelligence clearance while serving with a unit attached to the National Security Agency, and then taught high school business for 4 years prior to becoming a commercial banker. After leaving the banking industry in 2003 my wife and I opened our winery business.

So where is this all heading? I wanted to give you a little of my personal background, especially with regards to my working in the banking industry, because this is one of my blog articles where I am pissed off (I am allowed to be pissed off, you know!).

So what is my beef with the banking industry today? Well, my bank is Iowa State Bank here in Parkersburg, Iowa. The other bank in town is First State Bank which is part of a bank holding company in Iowa City which is the parent to another bank called Iowa State Bank & Trust (First State Bank and Iowa State Bank & Trust will soon merge with a third bank and all will soon be known as MidWestOne Bank). My beef centers around a letter that I received not too long ago from my Iowa State Bank which automatically signed me up for a product they called Overdraft Defender. First State Bank markets a virtually identical product called Overdraft Privilege and Iowa State Bank & Trust's similar product is called OOPS! (or Occasional Overdraft Privilege Service).

So Iowa State Bank enrolls me in the overdraft protection service which I had not asked them to do. I had to go into the bank to disenroll from the program and I had to sign a form saying I did not want this service. I thought this was rather odd that I had to sign to get out of a program that I had not signed to get into!

S-o-o-o-o-o-o-o, just what is my beef? Well, as a former banker, I was involved in meetings talking about the strategy of offering this very type of service. In fact, I had been privy to a video which espoused the benefits (to the bank!) of offering this type program. Was the goal to defend our customers from overdrafts? Was the goal to give our customers a special privilege? No! The goal was to collect more overdraft fees and pad the huge amount of money that these banks already take from their customers from these fees.

The banks are preying on the people who can least afford to pay these fees. The goal is to have a customer write a non-sufficient funds check and let the check clear. For a hefty fee, of course! It just puts the customers checking account into a negative position. Then, every additional check that comes in after the first one also nets a hefty fee for the bank. Again, and again, and again! If you don't get your account back to a positive balance the fees just keep mounting. Then, when you hit your pre-set overdraft privilege limit, the bank has the option of clearing or returning the NSF check (but you can bet the overdraft fee will be charged!). The bank that I worked for estimated that they could double the amount of overdraft fees collected by implementing this program. You bet! That is a privilege! For whom? The kicker to this whole concept is that if you have $100 in your checking account and 5 checks come into the bank at the same time trying to clear against your balance and the checks are for $90, $20, $20, $20, and $20, the bank will clear the largest check first to get your account down to $10 and then charge an overdraft fee for each of the other 4 checks presented. Nifty, huh?

And these banks make a very determined effort to convince everyone here that they are the essence of being a community bank! If this is the kind of corporate citizen that these banks are going to be we would be better off banking with one of those rip-off check cashing places instead of allowing our checking account at our local bank to overdraft. This program is nothing more than a license to steal.

While I was in talking to the gentleman at Iowa State Bank about removing this service that I did not sign up for and did not want, the president of the bank wanders in and asks me how my winery business is doing. This was the icing on the cake! Here we have a man who owns the bank that I do business with every day (and have for four years) and is located less than 10 blocks away from my business and he wants to know how my business is doing! Well, if he had walked through the door even once during those four years maybe he would know. Loyalty? I have none for these packs of thieves!

And, without the aid of any of these fine Iowa banks, BlueStem Winery will continue to make its own label wines plus sell its WinExpert and Cellar Craft wine kits for home winemaking and its homebrew supplies and beer brewing ingredients.

Do I miss banking? Not if this is the state of affairs in the Iowa banking community! I would rather be doing my wine making, selling those Cellar Craft and WinExpert kits and explaining to my customers how they can get started making wine, and selling home brew supplies to all of the local brewing enthusiasts.

One slogan heard around here is Iowa proud! These banks and any others pushing this type of product should be Iowa ashamed! I bet they all sleep well at night, though! Anyone offering these products obviously has no conscience whatsover.