In a lot of ways, 2010 ended up being a pretty good year for anyone with a bank account. For instance, the Federal Reserve stepped in and offered up some regulations that somewhat tame the overdraft fee situation. The best part of the new regulations? If you want your debit card to be declined because there's not enough money in your account for the purchase you're about to make, you can direct your bank to do that. No, it's not fun to be turned away by a cashier, but a lot of people see it as much more preferable to being stuck with one or more $30-something overdraft fees.
So what do we have to look forward to in 2011?Quite a bit actually. There's plenty not to be happy about, of course, but for now, let's think about raindrops on roses and whiskers on kittens and, you know, focus on the positive.
1. More Oversight
July 21, 2011, is going to be a big day in the personal finance world. That's when the Consumer Financial Protection Bureau (CFPB) will officially open its doors. Elizabeth Warren, special adviser to the president and someone who's been a thorn in every banker's side, is heading up the launch. Among other things, the CFPB will be establishing a consumer complaint system and overseeing financial products and services offered by banks, including credit cards, mortgages, private student loans, payday loans, credit bureaus and debt collection. If you've ever been irate at your bank for foisting a $35 fee on that $4 cup of coffee (that admittedly you shouldn't have purchased, given that you didn't realize you didn't even have $4 in your bank account, because of charges you'd made with your debit card that hadn't yet been accounted for, making you think you had more money than you actually had), you should consider Ms. Warren a national hero.
2. More Bank Loans to Small Businesses
Sure, if you don't own your own company, this doesn't affect you. Or does it? Maybe you work for a small business, which really needs a bank loan to expand and bring in more revenue. The Federal Reserve has reported that commercial and industrial loans from commercial banks are on the upswing and have been for the past two months, and the economic research and analysis firm, Moody's Analytics, as The Wall Street Journal recently reported, estimates that commercial and industrial lending from banks will rise 3% this year. And Bank of America just announced they're planning on hiring 1,000 small-business lenders. At any rate, this is good news for businesses, which is refreshing.
3. More Bank Loans to Consumers
Ah, see, regular people should also get a piece of the loan pie in 2011, too. Home loans are still probably going to be hard to come by, but analysts have been predicting that auto loans should be an area of growth. But for those who can get a home loan, especially if your credit is stellar, banks are at least continuing to lower interest rates. According to LendingTree.com, a fairly solid indicator of how the mortgage market is doing, the average rates offered by lenders just fell once again in the past week to 5.01% for 30-year fixed mortgages.
4. More Mobile Banking Opportunities
Of course, that was something we were able to look forward to in 2010 as well, not to mention 2009 and 2008 ... well, for the past few years, in fact. But 2011 looks pretty promising. Bank Systems & Technology predicted late last year that "2011 will be the year in which financial institutions will look to capitalize on the full potential of the mobile channel -- moving from basic user functionality to full mobile finance." To look at it another way, your bank will pretty much be in your pocket.
Along those lines, I'll give a plug to CashEdge, which announced that Fifth Third is launching Popmoney, CashEdge's person-to-person email and mobile payment services. It's the first time, according to CashEdge's press release, that bank customers can send money from their online bank to someone else's bank, just using that someone else's (presumably a family member or a friend or a creditor) email, mobile number or bank account information.
The bottom line: Expect 2011 to bring more innovative ways to do your banking more efficiently.
5. Fewer Bank Failures
In 2009, 140 banks kicked the bucket; 157 met their makers in 2010. There will unquestionably be bank failures in 2011, but most analysts predict fewer. We wrote a lot about bank failures during 2009 and 2010 on WalletPop, but as we noted then, many bank customers were hardly aware that their banks had shut down, since the process of transitioning a bank from failing to being owned by a more secure, reliable bank went so smoothly. If your bank does happen to fail in 2011, you probably aren't going to have too many headaches, if any. Still, fewer bank failures mean a better economy, which is good for all of us.
6. More Banking Options From Walmart
Sure, there are plenty of Walmart haters out there, but the store has a lot of fans as well, and as we've noted before on WalletPop, Walmart is increasingly looking like a bank, even if they're not allowed to be one in the technical sense of the word. Last July, Walmart began offering small business loans to its Sam's Club customers, and at Walmart, you can apply for credit cards and debit cards and perform other transaction you would do at a standard bank, such as check cashing, merchant processing, money transfer and even some things banks don't do, like tax preparation. And while the year's still young and Walmart hasn't made any banking announcements for 2011, this is more of a prediction than a fact, but look for Walmart to continue innovating how it markets to both banking customers and especially the "unbanked" (those who don't have their own bank).
7. Electronic Social Security Deposits Starting May 1
Most people already get their Social Security checks deposited into their bank accounts, but now everyone with a checking account at a bank or credit union, like it or not, will receive their benefits this way, although apparently, there are some loopholes people can get around if someone's unbanked or if they have some other reason they still have to get their benefits mailed to them. (You can also opt to go with having your money put into Direct Express, a MasterCard debit account from Comerica Bank.)
Even if you hate this idea, there's a lot to like about it, isn't there? Provided you have a bank account, it's definitely easier and more efficient to have money directly deposited into your account. It's also estimated that this will save the government $1 billion a year. For people worried about the deficit, well, this can only help.
8. Better Customer Service
In an era where some customers, or ex-customers, actually put up sites denegrating banks, like BankofAmericaSux.com, banks understand just how much anger there is out there. (By the way, Prime Performance, a company that helps businesses become well liked, recently came out with a survey showing that Regions Bank is considered the friendliest bank; Capital One and Chase came in last).
Granted, every bank manager is different, and maybe the awareness that customers are angry won't mean a hill of beans to some executives and staff out there, but it seems logical to expect in 2011 that banks will make a better effort to make their customers as happy as possible. If nothing else, bankers have got to know that if they drive every customer away, they'll have nobody left to nickel and dime to death.
9. More Ways Than Ever to Manage Your Bank Account
Not to take away anything from Mint.com, but there are plenty of other online financial management tools out there, too, from Thrive and Buxfer to, as we just mentioned in a recent post, Payoff.com, which debuted Jan. 5 of this year. Expect more services to make a splash in 2011, like GreenSherpa.com, which mixes banking and online gaming and hasn't yet launched (although you can send in your address to get an email invite when the beta version is unveiled).
10. More Alternatives to Banking
True, we've been dancing around this idea for several paragraphs now, mentioning Walmart earlier, and how angry customers have been at banks. If you're one of those who are fed up with your bank, you can definitely be happy that there are more ways than ever to leave your bank and find a way to bank without an actual bank. For instance, there's been a lot of buzz in the blogosphere about BankSimple, which is launching in 2011. It's a debit card that's meant to replace your brick-and-mortar and online personal bank. While we've no idea how effective or popular it'll be -- and I'm not recommending ditching your favorite or even unfavorite financial institution -- I'm sure some people will want to check out BankSimple.
Why? Their marketing campaign seems to be largely predicated on the idea that, "Hey, we're not a bank."
Geoff Williams is a regular contributor to WalletPop. He writes a lot about banking and debt and is the co-author of Living Well with Bad Credit.
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