Hollywood Make Over for Big Banks

It was one of those moments in which you just groan inside. I had insisted on going to see a new movie that was based off of a cartoon my children and I watched together. I can’t be the only parent who uses their kids to justify the shows they watch…ahem all the dads who take their kids to Hannah Montana or Moms taking their daughters to Justin Bieber concerts. I digress.

Sadly, though in the case of the movie the director had taken the superficial elements of the TV show and added millions of dollars to amp them up. So the movie had tons of special effects, panoramic vistas…and none of the dialog or humor of the TV show. Let’s just say it lacked "substance".

Recently with all the regulation changes that have taken place in financial services many large banks are trying to remake themselves as well. Like a bunch of wolfs that are all reaching for a new sheep costume they have grabbed at the superficial and thrown big marketing budgets into special effects while ignoring the "substance" of the dialog itself.


Why did we have financial reform in the first place? Anyone remember headlines of billion dollar credit unions threatening the global economy? No…odd me neither. I find it sad that in the passing of new legislation the new rally cry from large banks is that they are going to do away with free checking. It reminds me of someone not liking the rules and deciding that since the rules are changed they are going to take their stuff and not play anymore.


I think one of the most blatant examples of this has been the commercials from a recently converted bank that show a TV announcer talking to a child sitting at a table.
“Would you like a pony?”  the "TV announcer"man asks her innocently.
"Yeah,” she replies.
The man then hands her a small toy pony and she bursts into a giant smile.
The "TV announcer" then turns to a second little girl, asks if she wants a pony, and she says yes.
The man then clicks his tongue and a real pony comes out.
The first little girl gives a look that could kill and says, “You didn’t say you could have a real one.”
“You didn’t ask,” the TV announcer man replies smugly.


The irony ...the bank converted to bank status to receive TARP money after booking billions of dollars in sub prime mortgages. Like the girl in the commercial many people will not realize exactly what questions they should be asking of their banks.  


Practical Application:

As more “Big Banks” look at the new legislative landscape they are going to try and do a Hollywood makeover.
They will add more of one thing (wow…nice dividend for your shareholders…38 cents for preferred share) but it will be at the expense of something else… yep, that "Stagecoach from the West" is leaving and is taking your free checking with it.
At the end of the day a Big Bank can’t remake itself into anything other than a Big Bank…lots of hype…little substance.