Comments on: Some Banks Haven’t Learned http://www.chrismlindsey.com/2008/06/21/some-banks-havent-learned/ Life in (now) Lawrence, KS Sat, 22 Nov 2008 23:51:25 +0000 By: Chris http://www.chrismlindsey.com/2008/06/21/some-banks-havent-learned/#comment-1811 Chris Sun, 22 Jun 2008 20:09:24 +0000 http://www.chrismlindsey.com/?p=164#comment-1811 That is a very good point. But in that point, I see short-term gain and long-term loss: as the older generations that used these banks ultimately die off, banks like CapFed are going to die too. They will have pushed away younger folks who by then will have established bank accounts with other banks and have no need for CapFed. It might seem morose (I feel strange just typing about it), but maybe banks should be concerned when the population segments they are invested in grow older and begin to disappear. That is a very good point. But in that point, I see short-term gain and long-term loss: as the older generations that used these banks ultimately die off, banks like CapFed are going to die too. They will have pushed away younger folks who by then will have established bank accounts with other banks and have no need for CapFed.

It might seem morose (I feel strange just typing about it), but maybe banks should be concerned when the population segments they are invested in grow older and begin to disappear.

]]> By: Dan Smith http://www.chrismlindsey.com/2008/06/21/some-banks-havent-learned/#comment-1810 Dan Smith Sun, 22 Jun 2008 19:55:48 +0000 http://www.chrismlindsey.com/?p=164#comment-1810 I laughed heartily when reading your post, because CapFed is clearly well behind the times. Perhaps embarrassingly so. I'm stunned that any bank would require a 9-month probation period before issuing a debit card. Nonetheless, there *may* be some logic in turning away younger customers. Younger customers, especially college students, keep very low balances (often $100 or less) and make numerous transactions per month, even per week. As a result, they contribute very little--if at all--to the reserves from which banks can draw for investments. They also tend to have no savings and overdraw their accounts far more frequently than more established customers. From a bank's perspective, it may well be the case that college students are all cost and no benefit. I laughed heartily when reading your post, because CapFed is clearly well behind the times. Perhaps embarrassingly so. I’m stunned that any bank would require a 9-month probation period before issuing a debit card.

Nonetheless, there *may* be some logic in turning away younger customers. Younger customers, especially college students, keep very low balances (often $100 or less) and make numerous transactions per month, even per week. As a result, they contribute very little–if at all–to the reserves from which banks can draw for investments. They also tend to have no savings and overdraw their accounts far more frequently than more established customers.

From a bank’s perspective, it may well be the case that college students are all cost and no benefit.

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