Sympathy Dissipated

The banks are again taking their lumps, most recently for the delays in granting relief to borrowers on the brink of foreclosure. In the public mind the banks still haven't received punishment for the past decade's relentless pursuit of "flip" profits on risky financial deals, then leaving taxpayers to hold the bag when the losses proved too much for them to absorb. The payouts of big bonuses to people who caused the mess poured salt in the public's wounds.

In the current environment it's very tough to manage a bank: they have been directed to lessen the risky assets that they are holding and make more loans---contradictory actions that are like stepping on the gas and the brakes at the same time. Nevertheless, their incessant search for fees from everyone, even in areas totally removed from mortgage lending, immediately dissipates any sympathy.

In 2012 I enrolled in a high-deductible health plan and opened a Health Savings Account to pay the HDHP's out-of-pocket expenses. (HSAs have a number of advantages, principally tax-deductible contributions and tax-deferred earnings.) I opened the HSA at the Bank of America and tried to write a $3,000 check from one of my two Bank of America checking accounts to fund the account. I wanted to pay for some prescriptions from the HSA and couldn't imagine that there would be a problem, since we have had loans and accounts with B of A since the 1980's.

The alarm bell should have gone off when the local branch said that they could not handle what appeared to be a simple transfer. A couple of phone calls later, I found that I was able to make the transfer online. The funds were immediately debited from my checking account:

The $3,000 was removed from the account on a Monday

By the third day the funds still had not appeared in the HSA:

As of Wednesday night the $3,000 had not appeared.

The Customer Service person said that the transfer would take five to seven business days because it "had to go through the Federal Reserve". There is no good conclusion that one can reach from this explanation. Either: 1) the Bank had instructed its CSR's to give an explanation that was patently false, or 2) a small $ transfer between accounts in the same bank does have to be handled by the Federal Reserve, which could be one reason why the banking system is messed up. I am inclined towards (1), which means I'll be looking for a new HSA bank next year.

Oh, yes, the $ did appear in day 4, I did refill my prescriptions, and the bank promptly deducted its $4.50 monthly fee last week.