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Bank Tellers, Time To Get Worried

by: Mike Steinhardt July 18, 2008    

Mike Steinhardt

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If I was a bank teller, I would be worried. Around this country, the first wave of bank runs has begun. I am not talking about IndyMac and lines that formed outside their branches. I am talking about all the weird transactions going on in other banks that may or may not be on the FDIC’s list of troubled institutions (the same list that did not include IndyMac).

What I am suggesting is that bank tellers are being put in very bad positions and they are not being compensated for the risk they are taking.   I can only imagine how many of these hardworking people will be fired because they either refused to subject themselves to this danger or because they made an honest mistake that either caused the depositor to pull out of the bank or in the worst case, contribute to a loss associated with uninsured deposits. 

The media has finally decided that making sure you have FDIC insurance is worthy of their hype. So in response, people are doing what you would expect and panicking by withdrawing funds and trying to structure their accounts to maximize their FDIC coverage. Here’s the reality….bank tellers are typically not certified financial planners or licensed to provide estate planning or other fiduciary advice. But bank retail management seems to think it’s appropriate to subject their frontline workers to confused and angry customers. 

At IndyMac, we have heard numerous stories about how an uninsured depositor claimed “that teller told me I was protected.”  And that is going on in other banks.  And eventually, tellers will be sued - tellers who are typically making between $10 and $20 per hour.  And this concept that branch managers and their superiors are immune because they properly trained the tellers or that they provided enough “talking points” to help the tellers avoid a confrontation or lawsuit - that is BULLSHIT.  Tellers are going to be used as fallguys (or fallgirls) for depositors who claim they were unaware of FDIC rules that have been around for decades. 

They will be accused whether they gave perfect and accurate advice or not.  It’s just human nature to blame someone else, especially if you end up losing money.  The first wave of subtle bank runs will likely end soon and then tellers can go back to normal business.  But when that next bank fails, it’s going to get uglier.   If I was a bank teller, I’d be looking for a job that isn’t so dangerous.

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This article has 2 comments:

  •  
    Jul 18 09:29 AM
    When Sandy Weil shoved legislation through Congress allowing the rise of the megabank, I always marveled that each industry expansion resulted in fewer tellers in retail locations. Maybe the premises was that if there were fewer tellers, our withdrawals would be limited?
    Reply
  •  
    Jul 18 10:25 AM
    the banks can just advertise in many ways to educate the depositor about the fdic insurance limits.all a teller has to do is explain the coverage.much ado about nothing.
    Reply
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