Last week I moved from Massachusetts to my new home here in California. The day after I arrived I did what most people do when they move someplace. I opened a bank account.
Now, you might think this would be easy. I've had an account in Massachusetts for twenty-five years, and there's still money in that one. I would just write a check drawn on my old Massachusetts bank account for deposit in my new California bank account, and the money would be available in no time. Or so I assumed.
The nice young man who was sitting there at a computer in the California bank told me I'd have to wait two weeks for my check to clear.
We're in an electronic age. Money moves from Boston to Bangkok in two seconds. My car and furniture got moved from Massachusetts to California in ten days. Why should it take two weeks for my money to move from Massachusetts to California? The nice young man, sitting behind the computer, explained that Massachusetts was a different state from California, I was new to California, and, well, various things had to be looked into.
I told him he could look at my Massachusetts bank account right there and then on his computer. If he averted his eyes for a moment I would type in my pass-code on his keyboard and he could see for himself I had more than enough money in my Massachusetts bank account to cover the check I was depositing in his bank. But no, he was sorry. It would take two weeks for my check to clear. So like a chump I said okay, fine. And now I'm well into in my second week waiting for my money.
So where, exactly, is my money? It's no longer in Massachusetts. I looked on the internet the day after I deposited the check in California and it was already gone from my Massachusetts bank account. So where is it? Hovering aimlessly over Kansas City? Gasping as it crosses the Rockies?
I know where my money is. It's already here in California, in the California bank. (If truth be told, the California bank isn't really a California bank anymore because it just bought up the major bank in Massachusetts and is now one of America's largest national banks.) This big national bank has been using my money -- investing it, getting a nice return on it during these two weeks, while I've been in effect lending it my money at zero-interest. The bank is getting two weeks of “float,” as they say in financial circles. It's got my float and presumably the floats of thousands of other new depositors who are moving from one state to another and who also have to wait two weeks to see their money again.
This is exactly why we don't want big bank consolidation of the sort that's going on. It reduces competition, which means this giant bank (okay, I'll name it – the Bank of America) doesn't have to worry I'll walk out and go to another bank that will be more responsive. This bank can pretty much do as it pleases with my money for two weeks and I have no recourse. Except to complain, to you.
Robert B. Reich is co-founder of The American Prospect. A version of this column originally appeared on Marketplace.
