Banks

My professional career – which is to say the bulk of the last forty years of my life – revolved around banks, lawyers, real estate agents and insurance agents. Some might suggest it was an unfortunate conglomerate. Though it is popular to sing the adage, “The only thing worse than a lawyer at a party is two of them!”, from my point of view the hands-down winner is banks.

Yet as fashionable as it is to hammer them, banks and lawyers are something we can’t do without.  Like it or not we need them. Admittedly neither profession has the caché of an art dealer or a physician. But if I am to be perfectly frank if it weren’t for banks I’d have nothing. Everything I ever owned was bought with money borrowed from a bank; viz., my law practice, my first house (and my second and third), cars, watches, holidays, stuff generally, everything, all borrowed money.  And when I didn’t get enough from one particular bank, I just went to another and asked for more.  Once a banker even asked me if I wanted more!  Another bank offered me a line of credit I never asked for in the first place (a retail tool which I have since discovered is rampant though at the time I mistakenly thought it spoke to my unfathomable credibility).  Silly me.

If I were to stop there, my account of banks would have the appearance of grudging fortuity. Basically they gave me what I wanted.  And of course I did the same for them.  Where, however, the account turns sour is in connection with the confluence of banks and my clients.  Frequently when I was required to mesh the affairs of the bank and my clients, things didn’t go quite so swimmingly.  For one thing, the starting point for most banks – at least when not dealing with “professionals” (who somehow miraculously qualify for vastly more credit than that to which they are technically entitled) –  is to prove that you don’t need the money.  This of course is preposterous but the upshot is that the banks seek to overcome the possibility of any indiscretion by encumbering every particle of the borrower’s assets – commonly called “taking your grandmother’s gold teeth”.  A good deal of my law practice was as a result devoted to advising clients of the egregious extent to which banks proposed to encumber clients for life (and sometimes even after life into the very depths of their estate to prohibit the assets from being frittered away on the beneficiaries).

The stories I could tell of the annoying behaviour of banks would fill a tome. There is a theme common to all the tales – a combination of servitude and proprietary claim.  The servitude derives from the inescapable reality that banks provide incalculable services. For that we must be both grateful and obedient. Without banks we could not function in modern commercial society. And even if we were somehow able to do so it would only be at unimaginable expense and inconvenience.  I mean really, who wants to do without on-line banking or ATMs or Interac or credit cards? Pshaw!  The conclusion is always, “Where do I sign?”

The nasty but unspoken feature about banks is that they think they own your money; or, as is more commonly the case, they think they own you.  Either way, the bank wins.  If you’re lucky enough to have some of your own money (not just the borrowed stuff like I had), banks still think because they “handle” it they can pretty much govern its use – according to their rules not yours.  It’s absolutely useless to dispute this posture on the basis of some esoteric constitutional right.  What trumps such high minded concepts is possession – the so-called proprietary right.  They’ve got our stuff in their vault; and they have the combination! You’ve undoubtedly heard that business about “possession is 9/10ths of the law”. Seriously, I’ve known banks – led by their front-line vanguards – who rewrite the laws of the Province of Ontario by denouncing legislation passed by and with the consent of Her Majesty.  Banks are above the law. And who can argue? Granted the banks are taking their lead from the instructions of their in-house counsel on Bay Street (more of that indigestible lawyer influence) but this recognition does nothing to dilute the bank’s advantage. It’s the proverbial David and Goliath syndrome.

More than once I have battled with the banks but it is a destiny fraught with the inevitability of being a distinction without a difference.  You may indeed prove the bank is wrong but don’t count of getting anything for it.  The bank has long ago learned to rise above the impetuosity of a clamouring child.  You will be treated to textbook deference in terms of social gentility; but the result will never be different from the one to which you initially objected. Contradiction is but water off the bank’s back! They will be unmoved.  And the reason is simple: they’re too big to move.  Ponderous doesn’t begin to capture the inertia. Think for example of the network of employees you’d have to transcend from a local rural branch to reach the ear of some remote minion at Starship Command!  It’s an impossible undertaking!

In fairness to our chartered banks they provide a much needed element of security in the transaction of money matters (at least when recalling the horrors of some of the more notorious private money managers). As long as you stay within the limits of their regulations and rules it is possible to have a pleasant enough voyage. Though exceptional circumstances give cause for occasional aggravation, we are well to keep in mind the enormous complexity of the systems with which we’re dealing. I know that the apparent intransigence of banks on certain legal points is only the product of protecting themselves from liability for oversight or breach of trust. Banks don’t want to get embroiled in the messy details of a trust.  With the constantly changing face of its staff it is grossly inconvenient for banks to teach and decipher the complicated legal nuances.  Commonality and routine are therefore the order of the day, an admittedly tepid prophylactic for the periodic afflictions.

You will have noticed my deliberate personification of banks – though I have by design refrained from imparting an intimacy to banks.  This would suggest they’re not real people but rather mere institutions.  This of course is absurd.  What the characterization overlooks is that banks like people are not uniform and that our relationship with banks is as varied as our relationship with other people. Equally it is a reminder that we needn’t settle on any one relationship in particular.  In the end it may all turn out just to be a change of costume but at least there’s the perceived benefit of declaring “I can take my money elsewhere”.  Probably nothing more than bravado. Banks have so insinuated our society that they and everything they represent are related. They’re into all financial matters foremost including insurance. They obviously affect the real estate market because their appraisers basically write the ticket for loans – not to mention the banks’ inherent manipulation of value by the calculated reduction of cost (interest) with a commensurate increase of capital (principal). I suspect banks even trump the influence and independence of the legal profession by holding the key to business transactions generally.

The only thing that saves this unhappy and seemingly unilateral conclusion is that banks are dead without us. We are the sine qua non in this formula! To palliate the indignity of our association with banks it is  well to recall that just about anything we make by way of profit from our consortium is a plus. It is all too easy to become unduly fortified by the nutrition which banks provide while forgetting whence our strength initially derives. Dutch courage! Perhaps it is closer to the truth to describe it as a parasitic affinity which at least puts us in the company of many other favourable business associates.

If one imagines being able to get out from under the heel of banks by retiring loans, think again. Even in prosperity the net of the banks is so widely cast as to draw us back into their clutches. Instead of consulting your banker, you and your wheelbarrow of money now go to your financial advisor, a metaphorical distinction between confessor and priest, really just the same person wearing a different hat. I can’t say that the vernacular of one is better than the other.  Those heady young days of adventure and borrowing and capital expenditure certainly had their exhilaration. Being old and weighing one’s money each day is by comparison less poetic. Guessing what the stock market will do is perhaps no more certain than hoping that the mortgage pays off in the end.