Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 15, 1991 TAG: 9102150069
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: Ed Shamy
DATELINE: LENGTH: Medium
One important clue is that on Feb. 2, the Resolution Trust Corp. popped its head up and saw CorEast Savings Bank, which meant six more weeks of winter. TrustBank, which used to be Dominion Federal, also named Punxsutawney Phil its chief executive officer.
To understand what is going on here, you've got to grasp the fundaments of the banking trade: You and I labor to earn a few wretched dollars. Fearful that if we pocket the cash we'll squander it on tacos, porn videos and tropical fish, we yearn for a place to hide the money from ourselves.
Banks offer that service. They collect money from all of us, and when they have a knoll of legal tender, they hand it to men with ties to organized crime. These men build strip malls, rent out one lousy storefront to a frozen yogurt shop and then disappear to Trinidad and Tobago, strategically placing an ocean between our money and our bank.
This happens enough times and two things become evident: First, groundhogs are managing the loan departments of our major lending institutions. And second, you and I may have to endure the financial equivalent of a proctology exam to borrow a thousand bucks for a used car, but a developer craving a yacht gets a few million bucks without breaking a sweat.
Groundhogs do not leap from bank building ledges, but bankers, like lemmings, do. That's why the collapse of the banking industry is such an attractive prospect.
Even an understanding of finance as shaky as yours allows you to figure out that banks, to offset these loan-jumping schemers, need more money. In order to lend more cash to thugs who don't intend to repay, the banks must recruit stiffs like you and me to unwittingly deposit the pittance we wring from the free market.
That used to be easy. With five bucks, you could open up a passbook savings account. Whenever you had a little extra jingle in your pocket, you could stop by the bank and deposit it in your account. Nobody laughed. The bank was glad to take your money to finance some mobster's dream of the first cucumber ranch on Venus, or something with that sort of earning potential.
Your wretched little pile of money earned a wretchedly small rate of interest and grew slowly into a wretched, but bigger, pile.
But - and here is the reason that every bank in America is now slipping down the greased chute toward apocalypse - banks have had a change of heart.
Lending is so much fun, they don't want to bother taking deposits from dirt-farming cretins like you and me. Witness: You need $100 to open a savings account at Dominion Bank (shoot, if I had $100 why would I want to save?); keep $100 or more at First Virginia, at Central Fidelity, at Sovran, at Charter Federal; keep $200 at CorEast, at Signet, at Crestar or else you are charged - CHARGED! - usually about $2 a month to keep your money there.
These fees are needed to offset the mammoth clerical tasks of administering your $75 account, and its five yearly transactions.
When banks start charging to take money, it is time for the system to collapse, hopefully before the first tulips of spring.
Keep an eye out for falling lemmings.
by CNB