I remember the time when banks would regularly offer incentives (toasters, blenders, and the like) to open accounts, add money to an account, or upgrade to full service. Those were the times when they were competing with one another to entice you to do business with them. It was a heady time and bank tellers were some of the nicest people I remember.

But, it was a long time ago. Long enough to make me feel really old. I haven’t seen a bank go out of its way to get my business through personal contact and personal expressions of interest in decades. And, certainly the time when one had a special relationship with a particular bank or a particular person at a bank has long past.

So imagine my surprise when I received, in one day late last week, as many as six calls from six banks with which I do business, each reminding me of the special relationship we have and telling me how much they not only value my patronage, but that they are there for me and will do everything and anything to help me.

The calls were prompted by Hurricane Irma. And they appeared genuine. Each caller—not robo-callers – left me a phone number, told me to call any time and promised to be there for me in the event of any problems I had in the hurricane’s aftermath. A few of them even called a second time.

I’m not eager to assign motive for these call or similar calls I received from folks who worked for companies that insured my homes and cars.

But I must say that the calls made me feel good. I know they were motivated by an interest in cementing relationships, and even extending these connections over time. But, that’s fine with me and the calls felt awfully good, especially at a time of high stress. If national crises are necessary to bring back an old and very nice tradition of personal relationships, especially in the times we now live in, I am all in. I am grateful to these banks for their calls and intend to remember these kindnesses for some time to come.

From the moment JP Morgan Chase acquired Washington Mutual we knew it was only a matter of time before WaMu's saver-friendly rates started to drop. That day is today. Washington Mutual cut its savings and cd rates to such an extent that they are no longer listed on the BestCashCow rate tables.

Until today, WaMu was offering a 4% APY savings account that was tied for #1 as the best savings or money market rate in the country. That rate is now 3% APY. Their 1-year CD was paying 4% APY, also the best in the country and a great deal but the rate has been dropped to 3% APY, removing it from the best 1-year cd rates table.

For savers, it's a sad day. WaMu offered an easy account opening process and we hardly heard any complaints about the bank. There is little chance that under Chase, WaMu will return to its pro-saver days. With rates expected to drop, we hope everyone who wanted to got the getting while it was good.

RIP.

Caving in to the American Banker's Association, the FDIC has stipulated that the amount of loan debt it provides Ally Bank will be dependent on the deposit rates it offers. In a form 8-K that if filed with the SEC it noted that the FDIC placed new requirements on the bank on June 4. One of the new provisions is that the FDIC is going to use the deposit rates offered by the FDIC as one measure in determining the debt it will guarantee to Ally Bank as part of the the Temporary Liquidity Guarantee Program (TLGP). We've already seen Ally Bank lower its rates once after the ABA letter and I suspect we'll see more reductions in the future.

Below is an excerpt from the 8-K:

As indicated in the attached correspondence, requests by GMAC for further issuances of debt that is guaranteed by the FDIC pursuant to the TLGP will be administered by the FDIC according to the following plan: (1) GMAC's access to the TLGP will be phased in over time in specific increments; (2) the FDIC will inform GMAC of the amount of guaranteed debt available to be issued upon receiving a request from GMAC; and (3) the FDIC will require certain information from Ally Bank (a wholly-owned subsidiary of GMAC) to be considered in the decision made pursuant to item (2) above, which includes (a) a detailed list of Ally Bank's deposit products updated as products are added to or deleted from the list; (b) Ally Bank's ranking among the top ten deposit-rate payers and the methodology used to determine its ranking each week during any period in which TLGP debt of Ally Bank or GMAC is outstanding; and (c) the number of basis points the interest rate paid on certificate of deposit products and other deposit products exceeds the average rates for such products listed on Bankrate.com.

This is troubling in several ways. First, it appears that the FDIC caved-in to pressure from the big banks to force another bank to lower its rates. As I wrote before when the ABA first sent a letter to the FDIC regarding Ally:

Savers have already been punished as banks have dropped savings and cd rates precipitiously over the last year. This occurred because of a financial crisis precipitated by these same banks. Now, they want savers to subsidize their recovery by both funding the TARP and by accepting artificially low rates while at the same increasing fees and the rates they charge on various credit products.

Second it shows how the goverment is using the the various financial stimulus packages to throw its weight around. Debt guarantees are used to force banks to behave in a certain way, often a way that benefits the large banks and corporations and is against the interests of savers.

And a third point, if I may. It shows that government financing is beginning to crowd out private cash and investment. Why should banks we forced to compete for money when the government is doling it out almost free and begging banks to take it? A bank that does try to offer a decent interest rate - Ally - is branded as reckless.