When I was a kid growing up in Pecos, Texas, my father always told me that we really had three banks in town. Those of you familiar with Pecos may question that. We had Security State Bank and First National Bank, but who was the third? Yes, there was Pecos Savings and Loan, but that really wasn’t the equivalent of a bank at the time. The Leader Grocery and Hardware was effectively the third bank, and some would say the biggest. Customers would bring in their paycheck and apply it to their account and carry a credit balance. They could pull out money against their account and actually pay their electric or water bill from the Leader! Sounds like a bank to me!

Why am I talking about a store that closed 30 years ago and discontinued that practice over 40 years ago? Have you seen the Bluebird display at your local WalMart? We prevented them from getting an ILC charter from Utah, but they are coming in through the back door with this process. They want to take over your payment process and they now have the vehicle, but do not have your regulatory burden. How long will it take them to do to you what they did to the corner drug store and the local toy store? They are doing this with American Express, but how long until they are doing all themselves? Go look at Bluebird at Bluebird.com and look at the features. The account comes with a debit card, free direct deposit and consumer (or Commercial?) remote deposit capture from an IPhone, but it does not feature a service charge (with direct deposit I suspect). Also, if you have direct deposit, they refund your ATM Fees at selected ATMs. They also will accept a deposit at any WalMart check out stand. Do you see any of the dozens of disclosures you must display? Do you offer your customers anything equal to or exceeding that? American Express and WalMart are out to take over your market.

You are going to have to figure out how to compete against them or go the way of your local toy store. You (and your association partners must decide how you are going to fight this threat. Let me know if you have any ideas or a comment. You can comment at www.thebankersbroker.com or you can call or e-mail me. That is John Scott at (432) 268-3056 or John@thebankersbroker.com. I would love to hear from you. If I can help you with training an associate or marketing your bank or helping you buy a bank call me. I am here to help you!