The problem is that his proposals ignore the economics behind banking. If you take someone's money and put it in a vault, how can you provide interest on that money? You can't. You'd, in fact, have to levy fees to cover the costs of staffing, buildings, security, etc. Yes, even an internet bank has to have physical infrastructure somewhere.

Heck, why am I going to spend $3 for a SafeBank iPhone app when I can access my online banking from many banks for free?

He rails against ATM fees. How is he going to get rid of them for me?

I don't notice that any of the large banks require the use of Internet Explorer. BofA, Wells Fargo, Citi all work with non-IE browsers. I'm sure one can find a bank (out of the many thousands in this country) that has a site that doesn't work with Firefox, but it isn't an easy thing to find - which is why he hasn't specified any particular bank! He doesn't know of any!

While ad blocking might be cool, it has nothing to do with my bank. It would be like WalMart telling me that acupuncture was good - it has nothing to do with their business.

People might hate banks, but they hate people mining them for data potentially more. "We noticed that you spend a lot at pornoshop.com. Did you know cheapporn.com usually has better prices?"

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And he hasn't satisfied the most important question: how would this be better than a member-owned credit union? A corporation has to try for profits. A member-owned credit union gives those profits back to its members as dividends. Their rules are set up for the benefit of their owners - who are the people depositing money with them.

The problem is that people want a host of expensive things. They want tellers. They want ATMs everywhere - and that means cash physically everywhere or you refunding the ATM fees. They want free checks. They want online banking.

While one can argue that the banking industry got a little out of control, you can't just put money in a safe and expect to be able to offer people all that. You need to lend it out and that incurs risk and even more overhead - you have to deal with all the payments, the legal stuff when something bad happens, foreclosures (because, yes, some people won't end up paying you back). And if you want to be "safe" and only lend to the most credit-worthy people, your margins go down because they're the people who can get money anywhere at really good rates.

I mean, if you lend me money at 4.83% (the overnight average for a 15 year fixed mortgage at bankrate.com) and give your depositors 2% interest on their money, you have a 2.83% margin to operate on. But then you want to refund people's ATM fees of, let's say, $10/mo. On $5,000 (more than the average depositor has), that means you have an effective 3% rate on deposits. If the depositor only has $1,000 deposited, you've given them an effective over 10% rate and you're now way into the red. And that doesn't even take into consideration the around 30% reserve you want to hold earning nothing. And you'd want to give them free checks and not charge overage fees and do all sorts of nice things.

And if you're a "nice" bank, you'll want to provide lower mortgage rates than the average, right?

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The fact is that there are already "nice" banks. They're called credit unions. They're owned and controlled by their members (customers). How will you do better than a credit union that's a not-for-profit institution?

By being more efficient? That's the only way. And he's vastly over-estimated the money that rolls in when you play it "safe" and "nice". Banks make a lot of money. They make that money through a combination of managed risk and fees. If you get rid of both of those, you don't make money, you lose it.