How to Become a Bank Teller?

Knowledge about How to Become A Bank Teller:

Are you contemplating on how to become a bank teller? Talented young individuals can be part of prominent banking firms and look forward to promising careers by working as tellers. You do not really need formal education such as a post-secondary degree program to attain this position. High school graduates are eligible while certain employers provide on-the-job training for qualified prospects. Some colleges offer bank certificate programs that can enhance opportunities of being hired.

Training Courses and Certification for Tellers

Banks and credit unions are among the employers that make available teller training for applicants. This schooling focuses on mathematical ability, computer system operations for financial transactions, sales and marketing, communications skills and customer service. It is not compulsory for tellers to acquire licensure or certification. However, voluntary certification is always available.

The bank teller certificate program educates students regarding proper interaction with clients as well as the performance of fundamental banking duties. You will become skilled at different financial computations and the use IT systems to obtain financial information for bank clients. Majority of these modules under bank teller education call for one to three semesters of formal studies and consist of courses such as:

· Fundamentals of banking

· Cash handling procedures

· Standard financial processes

· Electronic computations

· Customer service Skills

· Business communications

With regards to voluntary certification, tellers can secure this accreditation from the American Banking Association. This distinguished organization provides teller credentials to tellers who have a minimum of six months of telling experience. These candidates are also required to complete the Institute’s Teller Certificate program. Tellers are asked to submit professional references and pass a comprehensive bank teller test to gain certification. It is part of the process that you should accomplish.

Useful Workshops

There are seminars for newly-hired bank tellers. These are workshops that last for several hours and encompass topics like financial skills, techniques in customer service and principles in banking sales. Prominent banking entities offer distance learning training for those who do not have the luxury of time. Aside from these opportunities, you can also avail of professional development courses for tellers as well as other bank professionals. Non-profit organizations in the industry present a lot of information for tellers hoping to get hold of higher-level careers. This is part of bank teller training. You can research on the database of banking conferences and courses along with recognized banking institutions.

Thinking of a Career in Banking? These Details Should Help

Banking remains a common career choice for most of the commerce graduates. Banking & finance are generally considered to be the high paying careers that most graduates wish to get in. While many of these are successfully placed in the dream jobs in these sectors, some keep struggling to make way for themselves. Many of them are stuck at questions like what profiles would be suitable for them, how well would a job in bank pay them, or how can they go ahead to find and apply for these bank vacancies.

Bringing apt answers to these questions, a brief guide has been compiled to help these aspiring job seekers to get placed in a bank. It includes details like entry-level banking jobs and salaries associated with them. Besides, this write-up will even help you know how to find those jobs and apply for them.

Entry level bank jobs

The banking sector has many respectful and high paying jobs, but not all of them can be aimed for, by the entry-level professionals. To get started, you can aim for an entry-level job, which can pay you moderately. These jobs do not demand any specialised qualifications and can help you get into the sector. Such bank vacancies include those of sales executives, bank tellers, customer care executives jobs and some others. Besides, many opportunities are there for those, who are capable to make up to the other banking positions like financial analysts, loan processors, and some other positions are there in data processing, operations, and auditing. To apply for these positions, one needs to check on the eligibility criteria set by the bank. Every private bank has some specific criteria set to make up to these positions. Generally, to apply for these jobs, a professional needs to possess a degree in a subject related to finance, economics and other related streams. Besides, the knowledge of banking and related concepts helps.

How to find and apply for the bank vacancies?

Now when you know about the jobs you can apply for, depending upon your experience, knowledge and qualifications, you are free to search for the suitable ones. Unlike the earlier decades, you now have the option of scrolling through the various banking jobs on the leading job portals. There exist many job sites where the recruiters keep updating the different job positions. You can make the best use of these sites and apply for the bank vacancies that you find yourself suitable for.

Banking Information All Immigrants Should Know

Are you an immigrant in the United States considering opening a bank account? If so, this information is for you.

In my home country, I lost all of my savings when the bank collapsed. Why should I trust banks in the United States?

In the United States there is an agency called the Federal Deposit Insurance Corporation (FDIC). The role of the FDIC is to insure money that a customer has in the bank up to $100,000. This means that if the bank goes out of business the FDIC will return up to $100,000 of your money. Most banks in the United States are insured by the FDIC. You can tell whether or not a bank is insured by looking for the FDIC logo on bank materials.

I am an immigrant – can I open a bank account?

There are many banks in the United States that accept alternative forms of identification to help immigrants open a bank account. As you shop around for a bank you should ask if they accept:

  1. Matrícula Consular – If you are a citizen of Mexico, Colombia, El Salvador, Honduras, Peru or Argentina you can apply for the consular registration card. Contact your local consulate for more information. Many banks now accept the Matrícula as a form of identification.
  2. Individual Taxpayer Identification Number (ITIN) – Immigrants are also eligible to apply for an ITIN number. An ITIN number is issued to individuals without a social security number to record their wages and income to the government for tax purposes. Some banks are now accepting the ITIN as a form of identification to open an account.

What are the benefits of opening a bank account?

There are many benefits of opening an account with a bank rather than keeping your money stored at home and using a check cashing service to cash your paycheck. Among others, some key benefits include:

  1. Safety – In a bank, your money is safe from theft, loss and fires.
  2. Convenience – Most banks now have Automatic Teller Machines (ATMs) widely available. Many also have online banking services, making it even easier and more convenient to access the bank.
  3. Cost – Using a bank is the cheapest alternative to cash your pay check

Services: Cashing Checks

  • Fee Amount: (fee = 1.5% of total check $4.80 x 4.5 weeks) – $4.80
  • Fees in one month: $21.60
  • Fees in one year: $259

Services: Money Orders

  • Fee Amount: $1.25
  • Fees in one month: $5.00
  • Fees in one year: $60

I want to open a bank account, where should I begin?

Shop around. This is the most important piece of advice. There are many banks in the United States. Each bank offers more or less the same basic financial services, but all on different terms and conditions. To find the bank that is right for you, consider the following:

  1. Products – Are you interested in a checking account? Savings account? Other savings options? Loans? Look for a bank that offers the products you need.
  2. Pricing – Compare how much each bank charges for the services that it provides. Ask questions and read the fine print to make sure you understand all fees and charges associated with each service.
  3. Requirements – Make sure you understand what the bank requires to open an account and you have all of the necessary documentation. Some banks accept alternative forms of identification like a matrícula consular and others do not. Ask first!
  4. Locations and remote access – One of the key reasons to use a bank is convenience, so you can access your money quickly and easily. Choose a bank with branches close to your home and work. Also make sure to find out if the bank has ATMs and where they are located. Equally important is understanding how much you will be charged for using ATMs that do not belong to the bank.
  5. Customer service – Look for a bank with employees that speak your language and have materials available in your language. It is very important that you understand everything that you sign up for with the bank.

TIP: Opening a bank account is a great first step towards building your financial future in the United States. By opening and managing a bank account responsibly, you are building a positive written spending record that can help you achieve your financial goals.

Sources: FDIC Money Smart Curriculum

Top 3 Components of Building Bank Credit

Recently I shared the benefits of building business credit with each of the business credit agencies. Separation of personal and business credit is a must for small business owners in order to eliminate personal liability and protect the integrity of the corporate veil.

While this strategy creates a Paydex, Small Business Credit Risk Score, and Intelliscore for your business it’s not the only rating you should pay close attention to.

Your business will also need to establish effective ‘Bank Credit’.

Bank credit is totally separate from building business credit and in no way affects your ability to build strong business credit scores.

“Bank Credit” makes your business more credible in the eyes of lenders. In this article, I want to share with you the ‘3 Main Components of Building Bank Credit’ which are:

Business Bank Account & History

Bank Rating Number

Obtaining Your First Business Bank Loan

So let’s get started!

Business Bank Account

The first step in establishing positive bank credit is to make sure that your business name and mailing address, as listed on your business bank account, matches exactly how your business name and address appear on any legal paperwork that’s been filed with the State. It must also match exactly with the name and address that appear on your Federal EIN paperwork. If it doesn’t match you’ll have to correct it immediately!

Business Bank History

Most lenders also determine the age of your business by the date you first opened your business bank account and not the date that appears on your Incorporation, LLC, or EIN paperwork. However, in some instances banks may also require 24 months seasoning from the start date of your business as well.

Your business banking history is vital to your ability of being able to secure larger business loans with banks. Lenders will look to see how long that relationship has been established, so once you get your account set-up don’t change banks!

The longer your business banking history, the better the borrowing potential you have.

Bank Rating Number

Your business bank account reflects how you manage your cash flow. Lenders want to know that your business cash flow is capable of handling the business debt and expenses on a consistent basis. Bank accounts with low average daily balances, or that show many NSF returned checks, can get your business loan applications declined right away.

If a loan amount requires a $1,000 month payments then lenders need to see at least a “Low 5? bank rating. Your “Bank Rating” is based on your average daily minimum balance over the last 3 months.

Bank Ratings

Account Balance
Low 4 – $1,000 – $3,999

Low 5 – $10,000 – $39,999

Mid 4 – $4,000 – $6,999
Mid 5 – $40,000 – $69,999
High 4 – $7,000 – $9,999
High 5 – $70,000 – $99,999

Bank ratings consist of three factors…

1. The first factor is your balance rating. This rating is your average minimum balance maintained in your account over a three (3) month period. $10,000 will rate as “Low 5?, $5,000 rates as “Mid 4?, $999 rates as “High 3?, and so on. You need to maintain a minimum “Low 5” bank rating ($10,000) for at least 3 months. Unfortunately, without at least a “low 5? rating, most lenders will assume your business has little ability to repay.

2. The second factor is the bank rating cycle which is three (3) months. You’ll want to have at least a low 5 for the three months prior to applying for larger loans.

3. The third and final factor has to do with how you manage the account. NSF (bounced) checks destroy bank ratings. From this point forward, NSF checks are something you can’t let happen. I would suggest that you add overdraft protection to your account as soon as possible.

Obtaining Your First Business Bank Loan

Getting your first business loan from a bank can seem like an impossible task. The majority of the business loan applications at banks get declined because banks won’t lend to just anybody … or will they?

This one business bank loan strategy provides a powerful boost to building business credit fast. The business bank loan needs to be in the exact name of your company. It should be under your Federal EIN and report to the business credit agencies, specifically Equifax Small Business and Corporate Experian.

So how do you accomplish this? Under this Bank Loan Program you will be securing a business loan with a certificate of deposit (CD) at the bank that is extending the business loan. You’ll make a deposit into a CD account at an SBA preferred lending bank. Then, you receive a business loan for 100% of the value of the CD.

This process works very well and works every time as long as you’re personal credit scores are not in the low 500 range. If your scores are in the low 500’s, it’s best to try smaller business banks and talk to an individual banker first.

The Benefits of a Secured Bank Loan

It will appear on your business credit report just like any other loan. There will be no note in the file, or on credit reports, that show it as “secured”. It will make your business credit report stand out to other lenders and creditors who obviously know how difficult it is to get a business bank loan.

If you’re personal credit is a large issue and you just can’t find a business bank to do the CD program for you … don’t worry. You can still build your business credit without the bank loan; the bank loan just makes it faster.

Compare Online Vs Traditional Banking

With the escalating popularity of the internet, an increasing number of industries are looking for methods to tap into this seamless medium in an attempt to keep up to date with the shifting technological penchant of their customers.

At present, just about anything can be done online with the remaining possibilities burgeoning by the day. The potential of the internet is ostensibly infinite and the banking industry decided it was not going to be left in the lurch.

Whilst the majority of people are familiar with the presence of online banking it is more than likely a large number of them have yet to have used it. This could very well be due to the fact that more than often we seem to find added comfort in working with real people and actual paper when dealing with matters related to money, as opposed to doing transactions in the seemingly aloof realm of cyberspace.

Despite personal preferences, online banking and traditional banking both have their pros and cons.

Pros and Prospects

First of all, online banking boasts noteworthy expedience and pragmatism. When you use online banking, checking account details, scheduling payments and dealing with deposits, can all be done with a mere few clicks of the mouse.

If you have upcoming payments due, scheduling multiple installments in advance can be easily managed online, in retrospect to the sometimes gruelling task of keeping up to date with paper statements. When banking online, specified amounts and the required dates of payments are automatically processed and sent accordingly by the bank on your behalf.

Travelling to the bank to ask for a financial statement is also not necessary; it can be downloaded from your online bank account which allows you see updated figures.

A lucrative benefit of internet banking is that it is cost-effective. A myriad of customers can be dealt with immediately. Hence, there is no need to have an unnecessary amount of staff. Subsequently, a considerable amount of administrative work is reduced from internet banking. Overheads on paper slips, forms and even seemingly trivial expenditures such as bank stationery have declined, ultimately helping increase the bank’s profit margin by a startling amount.

It is not essential to visit the local bank when applying for a loan as this too can be done online. The same applies to buying or selling stock as well as opening new bank accounts and closing old accounts. All of which being equally achievable as the more traditional procedures but without the tiresome paperwork clients had become accustomed to over time. More than ever this particular technological trend toward loans, insurance and banking is on the rise, mostly due to the acceptance of digital signatures around the globe.

Don’t Bank on It Being a Realm With No Shortcomings

For the majority of people the key issue is trust, or more correctly said, a lack of trust. Customers find themselves speculating over whether their transactions went through successfully or worrying that they clicked on the wrong button. Printing the transaction receipt as a routine practice is a pre-eminent method for overcoming such unease. By doing so, you can keep the receipt while waiting to receive confirmation that your transaction has been implemented successfully through notification in your bank statement or your online account.

Even though online banking provides a simpler means for managing your finances, it may be easier to keep up-to-date with your financial statements for budgeting purposes. The reason for this is online banking is similar in nature to credit cards; with easy access and it being so simple to use, it becomes easier to spend your money without any judgment on the reasons why you are spending in the first place.

An option for countering such trends and inclinations is to set up e-mail alerts which inform you when your account dips below a specified margin, however nothing is more effective than seeing it for yourself on paper or keeping your checkbook balanced.

In addition, receiving a credit card statement in the post and opening it on a monthly basis is an instant reminder to check if there are any strange or out of the ordinary charges appearing on your account. It is far more likely to forget to keep track of such information online therefore you should strive to have good money management skills.


Hackers are able to break into virtually any computer system, so you can’t really be too sure that they won’t break into your bank’s system. Nevertheless, any online banking site you consider using should have statements on the type of security they use. It is also advised to email the bank or head down to your nearest branch to enquire and find out exactly what would happen if there were a security breach; if their answer sounds vague stress the point that you want more clarity on the topic or alternatively go to another bank.

The advantages and disadvantages of online banking are both equally persuasive – it makes life simpler for some people, forthrightly being a better way to bank. For other people it may be slightly more complex and utterly intimidating. This is why a great deal of people are now using an amalgam of both internet banking and physical banking. While banking online does not seem to be as tangible as physically depositing money at your local bank branch you can still do almost anything with online banking.

Arguably, the greatest benefits of online banking are the time and money you save. In the light of these two perceptions, more and more banks are offering internet banking as a feasible option for their customers.

At the end of the day, online banking makes life easier for the customers and bank employees alike.

Control With Bank Reconciliations

Reconciling the entity’s accounting records with those of their bank provides an important control over banking transactions and confirms the bank balance disclosed in the statement of financial position. The bank statement is, in effect, a copy of the bank’s ledger account reflecting transactions from the bank’s standpoint. This statement, while not infallible, is a useful independent source of information against which to check the completeness and accuracy of the entity’s information on its banking activities.

Bank statements record all deposits by the customer as credit entries and all withdrawals as debits, reflecting the bank’s view of these transactions. Deposits by customers are liabilities (credits) of the bank, and withdrawals are either reductions of these deposits (and hence debits) or are advances by the bank, which constitute assets of the bank (debits). Hence all transactions will be recorded as ‘mirror images’ (with opposite signs) by the entity and the bank.

Furthermore, the timing of entries will differ, making it unlikely that, at any given time, the balance in the general ledger account will be the same as that on the bank statement. Each entity records transactions as it becomes aware of them, for example, on receipt of a customer’s payment or on drawing a check on settlement of a supplier’s account. The bank entry will be triggered by presentation of the item at the bank – as part of a (combined) deposit of customer payments, or when the supplier presents the check or payment (via their bank).

In addition, some entries will be made by the bank before the client entity receives advice of the transaction. Examples are bank charges and interest, automatic payments (APs), direct debits (DDs) and direct credits (DCs), where customers pay by bank transfer rather than by mail or in person. Automatic payments require the payer to authorize varying amounts, whereas DDs (and DCs) allow variations in amount, subject to the right of cancellation.

The reconciliation procedure is as follows:

1. Compare and tick off each matching pair of:

(a) Deposits and direct credits in the bank column of the cash receipts journal with amounts in the credit column of the bank statement ensure dates are compatible

(b) Checks drawn or auto payments recorded in the cash payments journal with checks presented in the debit column on the bank statement (ensure checks numbers or details of auto payments agree).

2. Adjust the entity’s records for omissions or errors:

(a) Enter omitted (unticked) items on the bank statement into the appropriate cash journal: (i) Credit items on the bank statement are entered in the cash receipts journal. These are deposits (a liability of the bank to its customer), for example, direct credits or interest on savings. (ii) Debit items on the bank statement are entered in the cash payments journal. These are withdrawals that reduce in-fund balances (or increase overdrafts). Examples include payments under auto payment or direct debit authorities, or interest and fees charged by the bank.

(b) Correcting journal entries may also be needed where amounts have been initially entered incorrectly in the journals. In practice it is necessary to check from original sources which entry is correct – the bank’s or the entity’s record.

3. Adjust the balance on the bank statement for any items not yet recorded by the bank – for example, deposits in transit and unpresented checks at the date of the statement; or any errors in the bank’s recording process.

4. Prepare the reconciliation. This takes the form of a statement prepared as at a certain date, starting with the bank statement balance – the independent amount – and adjusting it for any deposits not yet credited (outstanding deposits) and any checks not yet debited (unpresented checks).

This procedure confirms the accuracy of the recording process and the existence of the funds, as confirmed by the bank. Note the use of in funds (I/F), or O/D if overdrawn, to avoid the confusion of using Dr or Cr, which have differing meanings on the bank account and on the bank statement.

To gain maximum benefit from this control, organizations should obtain bank statements regularly, and ensure that the bank account (in the general ledger) is compared with the bank statement and any differences adequately explained and followed up. The frequency depends on the volume of transactions and the reliability of other controls, but it should be carried out at least monthly.

Bank reconciliations must be carried out on a regular basis, especially with the large number of electronic transactions that are now first recorded on bank statements. In addition, reconciliations provide a strong control over cash handling (for example, by high lighting any delays in making deposits), as well as providing assurance that the entity’s accounting records are reliable.

12 Ways Banks Are Legally Stealing Your Money and What You Can Do About It

Day after day, month after month, banks pick your pockets with impunity. Not content with charging rip-off interest rates to borrowers, banks have now discovered that lots and lots of little fees add up to some serious cash flow and cause only minor irritation for most of their customers.

It doesn’t seem like enough to fight about, really. A couple of three dollar ATM fees here, a few”overdraft” charges there. It doesn’t seem enough to merit more than a bit of grumbling.

Added together, though, fees and overdrafts total some serious money. For example, in 2009, even as consumers were being stretched to the financial breaking point, banks collected a record $38 BILLION in overdraft fees alone, nearly double the amount collected in 2000!

The public outcry against these fees resulted in the government issuing more regulations, rules with little bite due to the cozy, symbiotic relationship banks enjoy with politicians. This relationship allows banks to continue to steal money from consumers and help themselves to our tax dollars at the same time.

The issue of bank scams and hidden charges is an important one, especially when you consider that every penny they get from you is one that you won’t have in your retirement account.

I strongly believe that by taking some simple actions, you can avoid many of these bogus fees and charges and keep more of your money for yourself.

In this article, I’d like to look at a few common and not-so-common ways banks are reaching into your pocket and show you how you can avoid becoming a victim of these barely legal scams.

Please remember: Not every bank is doing ALL of these things, but there is a chance that your bank is doing at least ONE of them. This list is designed so that you can be on the lookout for unnecessary fees every time you review your statement.

  1. Fees for Paying Online: Buying online has become HUGE over the past few years, a fact not lost on banks. Already, some banks are charging “online convenience fees” of anywhere from $2-$4.95 for purchases made over the internet. Other banks are eyeing this as a potential mother lode of revenue. Before you use your credit or debit card online, confirm that your bank DOES NOT charge online transaction fees.
  2. Free Checking “Low Balance” Fees: You’ve been a good customer, faithfully managing your checking account to avoid those pesky overdraft penalties, keeping a careful watch on how and where you use your ATM card, going paperless to keep from getting an account maintenance fee. Congratulations! Your frugal ways have earned you an additional FEE- the so-called “low balance” fee for not maintaining a minimum balance. Be sure you know your bank’s minimum balance requirements or, if possible, change to a bank that does not require a minimum. You could also try connecting your checking and savings accounts so that the combined amount is always above the threshold.
  3. Monthly Maintenance Fees: You get your supposedly “free” checking account and find that several months later it has been phased out and converted to another type of account that charges a monthly fee, sometimes as much as $15. The cure: Change banks or move your money to a credit union.
  4. Deposit Returned Fee: A rubber check gets deposited in your account and YOU get charged for it, meaning you get scammed by both the check writer AND the bank! Nice… Cure: Fight the fee. Banks will often back down when you call attention to their scammy ways.
  5. Yearly Membership Fee: This used to be limited to credit cards but with credit card revenues way down, what’s a poor bank to do? Some banks decided that the level of service they provide to their customers is worth up to $29 a year. I say, “NO WAY!” If your bank wants you to pay them so they can charge you more fees- drop them fast and don’t even say goodbye.
  6. Deposit Requirements: To ensure checking account profitability, a few banks require that you have a specified amount of money in monthly direct deposits. If you fail to meet these requirements, a maintenance fee kicks in. Avoid this by switching to an online bank or credit union.
  7. ATM Usage Fees: Most banks don’t charge for getting money from their own ATM’s (although a few are starting to do so) Avoid using the ATM’s of other banks and in convenience stores where the privilege can cost you as much as five dollars per transaction. If you MUST get cash from an ATM, get the maximum amount possible as the same fee applies whether you get $20 or $200. Getting your cash directly from the bank and using your debit card to pay for items can also help reduce ATM fees.
  8. Getting You Coming And Going -The “Close Your Account” Fee: I kid you not, there are banks who actually charge as much as $25 if you close your account before a certain time. Be sure to look at the fine print when you open a checking account to see if there are penalties for closing it.
  9. A Traveling Life For Me And Yet Another Fee: If you travel abroad and use your ATM or debit card, it’s reasonable to expect that you will be charged ATM fees. What is not reasonable, however, is the additional “foreign ATM transaction fee” charged by some banks. If you are afraid of carrying large sums of cash when you travel, traveler’s checks might be an option. Even with the fees, they will likely cost you less than using foreign ATM machines.
  10. Debit Card Fees- It used to be that there was no fee associated when you used your debit card to pay for an item. After all, banks were making scads of money off credit card interest and weren’t too concerned about debit cards as a source of revenue. The recession has changed things, however, and a growing number of banks are charging you monthly fees just for the privilege of having a debit card- whether you use it or not. Find out if your bank charges you and demand they stop- or change banks.
  11. Talk to the Hand… But It’ll Cost You: Back in the late 1990’s and early 2000’s, several banks toyed with the idea of charging you to talk to a live person inside the bank. While consumer backlash forced most of those banks to stop tacking on this charge, the idea of charging to speak with sentient beings is just too irresistible for banks to abandon completely. It is starting to make a comeback, with some banks urging you to open a “cyber account” and then charging you a live person fee if you decide to go inside the bank and chat to a teller. Don’t be afraid to call your bank out on this one and if they won’t fix it- go somewhere else.
  12. Legislation Legismation… Bring on The Professional Card: The Credit Card Accountability and Responsibility and Disclosure Act of 2009 (CARD) was supposed to put an end to controversial credit card issuer practices such as hair-trigger interest rate increases, inactivity fees, and usurious overdraft fees. However, the bankers and the politicians they own made sure there was a big loophole in the form of so-called “professional” cards. Originally, professional cards were special credit cards issued to business owners who could actually prove they were business owners by providing some form of business documentation (copy of licenses, DBA, etc.) Nowadays, however, all one has to do is check the business owner box on most professional card applications and VOILA!- a shiny new plastic professional cards arrives in a couple of days. What the consumer is not told, however, is that professional cards are exempt from all the provisions of the CARD act. Banks are tripping over themselves to flood your mailbox with these types of offers and the marketing material usually doesn’t make it clear that these cards are not subject to the new law. The cure? Cut up or stop using any professional cards you may own and set fire to solicitations for them. These are a very, very bad deal.

I have outlined just a few of the banking rip-offs I’ve come across in the last few years. You can be sure that with the recession dragging on banks and finance companies will become even more creative about separating you from your hard-earned cash.

Fixing the Banks – A New Approach to National Banking Regulation

A strong economy needs a strong financial services sector. A strong financial services sector needs strong, viable, and competitive banks. Today’s American banking sector is in near collapse. The federal government has practically nationalized the big banks. The FDIC is nearly bankrupt. According to the FDIC’s Failed Bank List, the FDIC has closed 112 banks in the past year. From 2000 through September 2008, they closed 40 banks.

The banks have destroyed the housing sector. After Fannie Mae and Freddie Mac inspired loose lending, neighborhoods and cities across the country are being destroyed by foreclosures and banking processes that are driving down housing values even more. Sudden caps on equity lines, refusing short sale offers, then foreclosing, not maintaining foreclosed properties, and not paying assessments are destroying home values and killing the consumer economy.

At the same time, $700 billion of taxpayer money and debt obligation went to the financial sector through TARP to fund and save the very people who continue to keep the downward pressure on. The people were told the TARP bailouts would save the economy and keep credit available. Credit is certainly not flowing to businesses and good credit risks. Credit card rates are rising to the 30% range for even the best risks and payment histories. The housing sector is sinking horribly; the only saving grace is the $8000 credit for first-time buyers and that is set to expire soon.

The system needs fixing and traditional regulation is not the answer. Our proposed solution is based on the following fundamental beliefs:

  • No bank should ever be too big to fail; Some banks must fail in order to keep the others in line and aware of the downside to poor performance.
  • Banking has lost touch with local markets and customers.
  • Competition results in better banking services and products at the lowest price to the consumer.
  • More banks are better than fewer banks for the economy, for industry, for consumers, and for any geographic area.
  • Consumer, mortgage, and business banking should be separate from investment banking.
  • The government should never own equity in or control management of any bank.
  • The government cannot regulate the risk out of the system, without destroying the economy; nor should it attempt to do so.
  • The government cannot regulate good decision-making into any industry; it can only set guidelines and reduce the risk impact.

Our Proposal

The nation’s big banks are very big-too big for the government to bail out and too big for the economy to suffer the effects of banking failure. For sure, multiple big banks failing nearly simultaneously is the recipe for economic meltdown, as we have learned. No bank should be too big to fail. The government has to get out of the role of last line of defense. The incentive to take banking risks and claiming upside benefits while leaving taxpayers to clean up banking failures has to end, now.

So, we propose breaking up every large bank into smaller regional banks, 1980’s ATT-style. No federally-regulated bank should be allowed to do business in more than five US contiguous states. This will ensure:

  • Strong regional banking services with regional flavor and local headquarters.
  • Enough diversification to eliminate geographic and industry risk in business.
  • A broad base of regional banks with products and services geared to regional needs.
  • Interlocking state networks of banks will promote a variety of competition and quality services nationally.
  • No banking failure can have a national impact.

For the purposes of the regulation, Hawaii will be deemed to be contiguous to Alaska, California, and Oregon. Alaska will be deemed to be contiguous to Hawaii, Washington, and Idaho. Maine can be deemed to be contiguous to Vermont and Massachusetts in addition to New Hampshire. Finally, Washington, DC will be considered a part of Maryland.

The proposal does not allow banks to cherry pick five states across the nation, for example New York, California, Florida, Texas, and Illinois. Instead a bank starting in California could compete in California, Arizona, New Mexico, Texas, and Louisiana. Or, the could compete in California, Hawaii, Oregon, Washington, and Alaska. A Florida bank could go as far west as Texas or as far north as Maryland or Illinois. But, in all cases, a bank is limited to five contiguous states.

A federally-regulated bank does not have to compete in five states; they can do business in one, two, three, or four states-as long as the states are contiguous.

Skipping states is not allowed. A bank doing business in Florida and South Carolina must also be active in Georgia (or around Georgia via Tennessee and Alabama).

Breaking up the big banks should not be too difficult. Banks should be split ATT-style via stock spin offs. None of the new “baby” banks shall have interlocking boards or shared directors. The new banks must be independent entities. They must have their own management teams and headquarters.

Central service organizations like information technology should be spun off into independent service companies. They can have 5-year contracts to service the family of former banking company owners. After that, they should compete in the marketplace to service banks or be acquired to be an in-house IT organization.

The new “baby” banks will be permitted to acquire and merge with other banks. However, they are limited to doing business within their five contiguous states. Market operations in other states must be sold or spun off prior to closing on a merger or acquisition.

The result of our proposal will be a stronger group of regional banks. These banks will be more in touch with regional needs and industries. Decision making will be more decentralized and more accountable.

Yet, each bank will be large enough to diversify geographic risk. No bank will be unwillingly tied to a single metropolitan area, housing market, or client industry. Banks will be large enough to specialize and to serve the needs of their consumer and corporate customers.

The geographic footprints of various banks should not match up exactly. Each state should have a unique and dynamic marketplace of competitors. For example, Maryland could have competition from banks based in New York, Florida, and Illinois.

Best of all, no bank will be too big to fail. No bank failure will have national implications.

If, in the future, the system is working well or there is the need to promote additional competition in selected “under served” states, Congress could increase the contiguous state limit to six or seven states. Or, they could deem “under served” states as one state for regulatory purposes (for example, North and South Dakota might count as a single state to encourage more local competition) at the request of the state legislatures.

Now is the time to fix American banking, once and for all.

(c) 2009 All Rights Reserved

Understanding Offshore Online Banking

Underground economy, tax evasion, and money laundering, among others used to be the first things that come to mind at the mention of offshore banking especially some decades ago when this subject was barely tackled. Although the intention of the pioneers of offshore banking was to offer full financial privacy and lower taxation, this attracted many illegal entities that were able to work their way around the trade.

The reputation may still be there but offshore banking has come a long way. People from various sectors actually consider this a smart move in terms of managing their finances. If you still do not get the hang of it, read on.

Offshore Online Banking Explained

Offshore banking is simply opening an account in another country. Many people take this option to protect their savings and take advantage of the low to zero tax imposed on interests by local banks, as originally promised when this system was organized.

Over time, financial institutions offering this service expanded their reach and made offshore banking more convenient for clients around the world. Using the power of the web, anyone can now open an account overseas in just a few clicks in the comforts of their own home.

Offshore Banking Pros And Cons

Opening an offshore account should not be decided upon in a haste. Not because you can means you should at once. First, look at the benefits and downsides that come with this attempt. It is necessary that you understand the full details surrounding offshore banking before taking the plunge.


• Stability. If your offshore bank is situated in an economically stable country, trust that your finances are safe from risks especially if your country is experiencing economic turmoil.

• Possible higher interest rates

• Developing countries can also benefit economically especially if the source of the account is based in a country with stable economy.

• Tax-free interest payment


Remember that everything has its pros and cons. While opening an account in another country has a handful of advantages, there are also some downsides such as:

• Indeed, offshore bank accounts can also pose some risks in terms of banking stability. Remember in 2008, during the recession period, people who have offshore accounts were heavily impacted by the banking crisis?

• Not everyone who owns an offshore account is involved in illegal transactions but the stigma is can be hardly ignored. It does not largely impact an offshore account owner’s reputation actually especially now that more and more people already recognize the benefits.

• The geographical differences may become a huge factor in the future when some important matters need to be settled personally.

How To Open An Offshore Account

Opening an offshore bank account is almost just the same as opening a domestic account but more documents may be required to establish your identity as a depositor. Aside from the usual requirements such as birth certificates, proofs of identification, and social security number, which should be notarized or bear apostilles by the way, you also have to present passport and certificates relating to your current finances. These are obliged from a potential depositor to prevent tax fraud and various illegal transactions, which are often linked to offshore banking.

Anyone can open an offshore bank account as long as you deposit the required amount. Some banks set a minimum of $5,000 while others need lower balance limits. Most people consider Singapore, Hong Kong, Austria, Switzerland, and other ‘tax havens’ as the best places to open an offshore account.

Almost the same process goes with offshore online banking. The difference is that you will have to send the requirements in digital format. It depends on the bank how long the processing will take. You can get such information during your research on the best offshore banking service to target. Especially if you are someone who only knows little about banking and finance, you should not only scout for information online but also refer to an expert. Offshore online banking in general is legal but before you fix on it, you must be aware of implications. Talk to someone who knows everything about the subject first in order to protect not only your money but also your own.