Annals of transparent banking, Citi edition

By Felix Salmon
October 11, 2011
Ron Lieber and Joe Nocera -- attacked the sorry state of bank checking accounts. And their conclusions were almost identical.

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On Saturday, two NYT columnists — Ron Lieber and Joe Nocera — attacked the sorry state of bank checking accounts. And their conclusions were almost identical. Here’s Ron:

If you’re trying to figure out your own next move amid all of this uncertainty, well, good luck. As Adam Levitin, a Georgetown law professor, noted in a blog post on this week, it’s hard to make apples to apples comparisons between one checking account and another, and harder still to move your money once you do decide to switch banks. This might be a good place for the Consumer Financial Protection Bureau to set standards.

And here’s Joe:

The government will never force Bank of America — or any other bank — to reduce or eliminate its fees; it doesn’t have the nerve. But, at the least, it could insist that banks display their fees in a uniform way so that customers can compare how they’re being gouged and make banking decisions on that basis. That kind of reform could stir competition and bring down fees.

This, of course, is precisely what the new Consumer Financial Protection Bureau is supposed to do — and would do if the Senate Republicans would ever allow a director to be approved.

I couldn’t agree more, and I’ve been pushing this move quite hard, both on my blog and whenever I’ve had the opportunity to talk to someone from the CFPB. I’m pretty sure this does not require a director to be approved — it just needs the CFPB to collate checking-account details into one big database, and then publish an API allowing people to interrogate that database any way they like.

As it happened, I’d spent most of the previous afternoon at the big Citibank hub in Long Island City, talking about their checking accounts, savings accounts, and, most of all, the new Citibank website, which they unveiled last week with great fanfare.

We didn’t get into the fraught question of the level of fees. But I did ask to see how easy it was, on the new site, to bring up the details of your checking account — what kind of account it is, what the fees are, what the minimum balance is to avoid those fees, and the like.

At this point, we were in the large, sun-drenched office of Tracey Weber, the head of internet and mobile for North America consumer banking. We’d started in a windowless conference room, where Tracey had attempted to show me the website by running through a series of PowerPoint slides. When I said that I’d rather see the website by seeing the website, there was a flurry of confusion, which ended up with Weber having to log in to her own personal Citibank account on her work computer.

Weber, it turns out, gets the same underpowered Dell setup, with a single small monitor, as anybody else. But I could still see what was going on: information about fees and the like are in an entirely separate section of the website. You don’t need to log out to see them, but you certainly can’t get personalized information about them. Even something as simple as savings accounts are — still — very hard to understand: when the screen presenting the two different choices came up, we had to call up a product guru to explain why anybody might prefer the first to the second. And even he couldn’t really manage that. What’s more, the single most salient feature of a savings account — its interest rate — was nowhere to be seen.

Bits of the site look slick — especially the animated expense-analysis pie chart, where you’re able, for some reason, to drag pieces of the pie out to isolate them. But once you’ve done that, you can’t actually delve into that piece and see what spending went into it: for that, again, you need to go to an entirely different transactions screen.

After spending a good couple of hours with Weber, I came away convinced that I couldn’t reasonably blame her for any of the weaknesses with the website: she was just clearly caught up in the middle of an enormous bureaucracy where it was basically impossible to get anything done. Citibank has business relationships with vendors like Yodlee and Popmoney, so it’s possible to use Citi’s website to see the details of your non-Citi bank accounts or to send money to other people armed with nothing but their email address.

But beyond that kind of bought-in functionality, is still at heart a vast list of products and services, which you need to be incredibly financially literate to navigate. I defy anybody, for instance, to be able to tell me the difference between, say, an Inter Institution External Transfer to an account in the US, versus a Wire Transfer to an account in the US. (The answer, by the way, is to use neither a lot of the time: if you’re sending money to someone else in the US, Popmoney is the way to go.)

Weber has no control of Citibank’s product suite — her job is to present everything that Citi offers, and that’s always going to be a bit messy. And she’s no technologist, either — when I asked why there were separate downloads for Citi’s iPhone and iPad apps, rather than simply having a universal version, she had no idea what I was talking about.

I’m sure that at the margin some of the language on the new site is easier to understand than some of the language on the old site. But you just need to look at the language of Weber’s announcement to see how far Citi has to go on that front. “Citibank formulated the personal finance management experience with the tools most important to its clients,” we’re told; she adds for good measure that “Citibank continues to strengthen its standing by delivering modern solutions”.

Even the login screen is ridiculously confusing: before you can even enter your username, you have to choose between one of nine different Citi websites to log into. If you have a Citi bank account, and a Citi credit card, and a Citi mortgage, and Citi ThankYou rewards, which of those sites are you meant to log in to? Why can’t Citi just make sure that each username is unique, and log you in to whatever your account is automatically?

None of this is ever going to be fixed internally, by Weber or anybody else. In order to understand what’s going on at Citi, Lieber and Nocera are right: we need a trusted third party — the Consumer Financial Protection Bureau — to tell us. Some banks — probably smaller ones, with flatter management structures — will have transparent fee structures, be a pleasure to use, and will generally count as best-in-class. Those banks should get some kind of gold star from the CFPB. And big banks like Citi will steam on regardless, with every cosmetic change to their website accompanied by a massive increase in fees somewhere else.


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And, presumably, Citibank claims that this complicated, nine-headed system, which exchanges data with a huge number of ‘partners’ in amounts and ways that no single person understands, is completely, totally, absolutely secure. Sigh.

Posted by MattF | Report as abusive

Getting back to BoA’s debit card fees: why doesn’t BoA just say anybody who has free debit now will continue under the old rules. Anybody who comes along after the new rules falls under that fee schedule. Don’t for one minute try to make me believe that isn’t possible for them to do. They could if they wanted to. How about if we were here before Moynihan we can call him for the pig-headed jerk he is too if we want to ..

Posted by Woltmann | Report as abusive

Presumably these are completely different bits of Citi with completely different computer systems and under different regulatory regimes.

Posted by Danny_Black | Report as abusive

Here’s an easier way to choose a bank. Ask yourself, is this an institution that participated in massively fraudulent financial “innovation” that nearly destroyed the global economy and required government handouts to survive? If answer is “yes,” the next question is, “Do I really want to do business with scum like that?”

Posted by Moopheus | Report as abusive

this is why our ancestors made usury illegal.
Local banks and credit unions keep our monetary life-blood flowing locally, multi-nationals are sucking our money and means to grow out of our local systems.
remove your monies from these by november 5th,Bank Transfer Day, and not only send a message to these predators but throw these leeches from our system.99% against the 1% that rule us.

Posted by latefordinner | Report as abusive

Whatever rules get changed, no matter how good the small banks are or how much they support entrepreneurs and local business, the Big Banks will always be able to pay a few hundred lobbyists in Washington to massage any legislation such that they can comply with it without changing.

Posted by FifthDecade | Report as abusive

You can’t have people display fees in standardized ways, because new, simpler banks might want to charge different fees. If you want change in the world, make doctors and hospitals publish their price lists and fees.

Posted by mattmc | Report as abusive