The Best Bank for the Business Traveler

By Robert McGarvey

The best bank for the business traveler just may not be a bank. But understand this is a story where such claims carry asterisks with qualifiers.

What does a business traveler need from a bank? Nowadays it comes down to ATM access in most cases. I can tell you how to get the most free ATM access and will in a bit. I am a purist about this. I can tell you all the times in the past six years I paid for ATM access – exactly once. I quiver with rage at the thought of paying $3 or $5 or more to get $100 out of a machine. Plain wrong. Free is the only price I will pay.

And yet there I was five years ago in Las Vegas on a business trip and I had to do a wire transfer – it had to happen that day – and it occurred to me I had sufficient funds in a Chase account. I glanced at the website, decided not to bother with it, got in a cab, rode a few miles to a Chase branch and, whoosh, the money was on its way. Chase could not have been cooler about processing a six figure transfer. Yes, the money was going to a known mortgage escrow company, not a cousin in Albania, but still, this was frictionless. I maintain a Chase account and probably long will.

Nonetheless that’s not the institution I recommend for business travelers.

Look at most articles about why credit unions won’t work for you and, in most cases, a decisive reason is the sparseness of the ATM fleet. In truth a credit union with a fleet >100 is a rare beast. Some have just a single digit count of ATMs.

Yet I will tell you that a well chosen credit union will give you the broadest, deepest ATM access in the nation.

A 2016 count of bank owned ATMs found Chase with the most, around 18,600. B of A had a tad over 16,000. Wells Fargo had 12,800. PNC had about 9000.

But don’t think that therefore Chase or B of A or Wells is necessarily your best bank.

Much better is a credit union that belongs to the CO-OP ATM network or the CuLiance (nee CU24) network. CO-OP has around 30,000 ATMS in its network. CuLiance says it has more.

Joining either network requires the credit union to give fee-free ATM access to members of other, participating credit unions.

It’s a credit union perk that it is difficult to see how banks could match. You just don’t see Chase, B of A and Wells pooling their networks. No way.

Thousands of credit unions do. But not all. When opening a new account, always ask, are you a member of the CO-OP or CuLiance fee free ATM network?

There’s one more credit union perk: CO-OP shared branching which allows members of participating credit unions to conduct business in other participating credit unions exactly as though they were home. Need a wire transfer? You got it.

My principal credit union is in the shared branching network (and, no, I could not do the transfer through it because I did not have enough dough in that account).

CO-OP claims its network gives it 5600 shared branching locations. It says 1852 credit unions participate and that gives their 62 million members what amounts to a cross country branch network. (Wells Fargo has the largest branch network in the US with 5900 locations. Chase is second with 5200. But heads up. Big banks are shuttering locations so these numbers are dynamic.)

Does this mean a credit union is the best choice for the business traveler?

For many, yes. Not for all.

The exceptions are those with heavy international travel. Few credit unions offer enticing services for international travelers.

But Capital One 360 does, per Nerdwallet. It imposes no foreign transaction fees and it also does not charge for foreign ATM access (the machine owner may and probably will). It also has no account fees so it’s a good card to keep for just the occasional foreign trip.

That’s key by the way: I advise most of us to have several accounts. I do. One with Chase, one with a large credit union. I have a third account that bounces around so I can explore institutions (it had been with Capital One 360 but I moved it to a small Phoenix credit union and probably it will go in motion again – but I’m a banking nerd and don’t recommend this kind of shuffle to any who aren’t).

So there you have it. Have a credit union account – literally thousands offer free checking with no minimum balance – and also a Capital One 360 account and you are well covered, domestically and internationally. You will pay minimal or no fees, get the service you need, and may even start cussing about how rotten your bank is.

Cruising 101: The How To Guide

By Robert McGarvey

Horrors, the horrors. I read the recent JoeSentMe “first cruise” column by David Danto – “More Bruisin’ Than Cruisin’” – and my sympathy is profound. He says of his ship that it was “well – honestly – a toilet.  I use that term not only because of how bad the ship’s condition was, but because of the constant smell everywhere.  Our teeny, tiny cabin was so small that you could only get out of the bed on one side. It had worn and water-damaged walls, inoperable lights, and its one electrical outlet was as far away from the bed as you could get.”

Ouch.

There are ways to avoid such a fate – we’ll get into that momentarily – but, first, know that for around a dozen years I wrote an Ombudsman column for Porthole Cruise Magazine and my email box overflowed with complaints that often ran similar to Danto’s.

It happens on cruises.

It happens way too often and it costs people both money and vacation days.

I have been lucky. It has never happened to me and I’ve been on a lot of cruises, at all price points, everything from ultra luxury to an old ship that operated as a “semester at sea” vessel for a non descript college and when school wasn’t in session they ran cruises on it.  (It was dated but actually quite pleasant.) I’ve also sailed a little known Chilean small ship down the Chile coast to Patagonia, a superyacht up the Napa River (it was supposed to also go into the Petaluma River but there wasn’t enough water), and just recently an ultra luxury vessel (roughly $1000 per head per night) from Montreal to New York, in late October and, yes, it snowed in Quebec City, hit freezing in Montreal, and rained torrentially in Bar Harbor.

How to avoid an unpleasant cruise? Here’s the advice I gave Porthole readers. It’s what I do when planning a cruise.

Start by researching, in some depth, the ship you will sail on.  We all think, oh, the ship doesn’t matter, we’ll spend all our time in ports. The ship matters.  Crucially. You will eat most meals on it. You will sleep on it. You will shower in it. You may use the fitness center, get a spa treatment, possibly play blackjack for money (I never have on a ship but I have seen many who do). You may also get sea sick (I also have never done this but I have an abnormal constitution in that regard).

How does price impact ship accomodations? More expensive ships have bigger cabins – usually much bigger bathrooms – and much more attentive staffs (who are better trained and often speak better English).  But I’ve had a pleasant cruise on a budget priced Carnival ship. I can’t promise that spending more insures a better cruise, just as I won’t say a cheaper cruise is worse. Go back, read the reviews and keep reading.  Ships do vary in character every bit as much as hotels do, even hotels under the same marque. Research before booking pays dividends.

Afraid of sea sickness?  Danto vividly related his personal sufferings and that’s a terrible thing.  But there are steps to take to possibly avoid it.

Research the ship and sea sickness. Small vessels generally have more of it.  Cabins in midship generally suffer less. Newer ships generally have better stabilizers. But if sea sickness is a personal problem, buy OTC meds and/or wrist bands. If it’s really an issue, get a prescription from a doc at home before sailing.  All cruise ships have on board physicians by the way but office hours generally are limited and while some freely dispense anti nausea meds, others don’t.  I recommend dealing with this at home before sailing.

If you don’t know your susceptibility to sea sickness, bring a box of the OTC pills and/or a wrist band. Just in case.

Also research the ports – and be aware that port calls do get cancelled, typically because of bad weather. I was on a Panama Canal cruise where three port calls – including Nicaragua, which I really wanted to see and I guessed this was going to be my only chance –  were cancelled due to bad weather. On my recent Montreal cruise two port calls were cancelled. It happens. Never count on a particular port call. Never.

Weather, as you’ve guessed, is the wild card on any cruise.  That’s why port calls are cancelled – probably because the ship cannot safely dock or, sometimes, because it can’t safely deploy tenders which are little ships that can sail into tiny ports that don’t accept big vessels.  Weather is also the why of sea sickness.

Me, I’ve learned to accept the weather, whatever turns up.  You can’t fight what you can’t control.

Follow my advice – mainly to do research and more of it – and is a good cruise guaranteed? Of course not.  But, as I said, I’ve never had a bad cruise and, curiously, my favorite is a cruise I took maybe 18 years ago aboard Renaissance in the eastern Med.  It went belly up in 2001 and probably was on life support when I cruised with them.

But it was a damn fun cruise anyway.  Even though I probably wouldn’t have taken it if I’d researched the line’s financial condition.

Let’s hope your next cruise is likewise.

When Small Credit Unions Go, So Do the Big Ones


By Robert McGarvey

A chart in consultant Marvin Umholtz’s year-end CU Strategic Hot Topics newsletter jumped out at me and triggered a tsunami of worries about the future of credit unions.

Crunching NCUA data, Umhoeltz said there were 5480 credit unions as of mid 2018.  But get this: 3904 have assets under $100 million.

1454 have assets under $10 million.

Just 542 have assets above $500 million.

So what?

Here’s what: many experts I talk with tell me that the minimum size needed for credit union survival is $1 billion. Some scoff at that and say a well run institution with $500 million will do fine.

Nobody is optimistic about the future of micro credit unions.

But, increasingly, I believe that it is the micro credit unions that are the face of the movement and they are cause of some benefits that go to even big institutions.

Such as tax exemption.  No politician wants to give tax exemption to big credit unions that can go toe to toe with community banks – if only because community bankers continue to raise a loud, pained whine about tax exemption. But it is hard to turn down the plea of a micro credit union.

Small credit unions bring other benefits.  When credit unions “walk the Hill” – knocking on legislators’ doors in Washington DC – the ones who are likeliest to gain entry are the small institutions.  How do I know? Because CEOs of some of the biggest credit unions told me exactly that, that they ride in the wake of the small institutions.

But the terrible news is that as credit unions shrink in number it is the small ones that are folding.  Sometimes it’s because a longtime CEO retires and who wants to take over a small institution where the hours are long, the pay is low, and the responsibilities are high?

When a board can’t find a CEO increasingly it throws in the towel and merges with another institution.

Other credit unions give up because they can no longer keep up with government demands for BSA, AML, Patriot Act scrutiny of accounts and deposits.  

Sometimes, too, credit unions fold because they can’t figure out how to offer the technology that’s needed to stay current.

Occasionally, too, credit unions fold because they made hideously bad investments – think of the failures due to over exposure to taxi medallions.

But, really, bad investments are the lesser cause of closures these days. Now it’s mainly regulatory fatigue and inability to keep up in the personnel wars.

But this doesn’t mean small credit unions necessarily must close. They don’t.

Two years ago, I wrote a piece “How to Save Thousands of Small Credit Unions.”  

That article by the way noted that in 2010 there were 7486 credit unions.  That means 2006 closed in eight years. That’s roughly five a week, one every working day.

Wow.

In 2016 by the way there were 5916 credit unions.  Two years later there were 436 fewer.

Cue the bagpipe dirge.

For the big credit unions too because – again – they need the small ones.

In that 2017 article, I quote Jim Blaine, then CEO of State Employees Credit Union of North Carolina, the nation’s second biggest, thusly: “I hope we do a lot to help smaller credit unions. If the small credit union goes away, the larger ones will be in a mess.”

Blaine is spot on.

What can big credit unions do?  They can offer free ATM access for instance, that’s a big plus for members of tiny credit unions with maybe two ATMs. They can offer free management consulting. They can direct restless, ambitious, talented staff to cut the cord and take a job with a micro credit union, they can help spearhead innovative solutions, sometimes through credit union leagues, where small credit unions learn how they can join together to collectively hire a BSA expert or even a CEO (and, yes, there are cases where one person acts as CEO of multiple institutions).

Accept that the survival of small credit unions is critical to the survival of all and, suddenly, extreme actions start to make sense.

Word of advice: don’t shrug off the next death notice you read about a small credit union.

Because next the bells may toll for thee.

Tune into the CU2.0 Podcast for continuing thinking on credit unions, their challenges, and what tomorrow may bring.

Make Mine an E-Book: How I Travel in 2018

By Robert McGarvey

A contributor to JoeSentMe.com, for business travelers

Used to be – as recently as a decade ago – I’d always lug a book with me on every trip and, usually, it was a book I wanted to read but hadn’t for lack of time, I thought. And where do I have time? On flights – a x-country jaunt is good for 5 to 6 hours of interrupted reading.

I don’t do that heavy lifting of analog books anymore but I still subscribe to the belief that perhaps the best use of a flight is as a reading session.

Picture me in 2009 – into the carry-on would go maybe Sartre’s Being and Nothingness, a thick book, at least a pound. Or maybe Finnegans Wake.

I carried the latter a lot and, you know what, I still have not read it.

What I learned is that in packing for a trip my reading ambitions generally outstripped my realities. That’s why I often found myself popping into an airport newsstand and buying, say, a Parker (Spenser long has been a favorite) or a Tartan noir novel or any noir set in Los Angeles.

After a long day in meetings or at a conference I just did not have the intellectual energy to plunge into Sartre’s meandering thoughts – not even Kierkegaard’s, whose writing I sometimes packed. A nasty bit of noir was just the ticket however. And a lot of same can be read in full even on, say, a Chicago to LA flight and, absolutely, on anything x-country.

But now when I fly I have it both ways, the heady intellectual stuff and the lighter weight reading are both available to me and I do it without paying any sort of weight penalty.

E-books are the answer.

In my case that mainly means Kindle – which I have on a Nexus 9 slate, a Pixel 3XL phone, a Kindle Fire, and an iPad Air tablet. I have a few books downloaded to Google books and that app is on those same devices. I’m not a fan of Apple’s iBooks mainly because I only have the app on an iPad and have no interest in buying more iOS devices.  Apple’s walled garden approach doesn’t work for my reading. Kindle, which seemingly runs on everything, is just the ticket.

On Kindle, Amazon tells me, I have 1087 books that run a gamut from Heidegger’s Being and Time and Clifford Rosenthal’s Democratizing Finance, a history of the community development credit union movement, through probably a dozen Spenser novels, a like number of Nero Wolfe mysteries, and a large number of Graham Greene novels. Mixed in there is T. S. Eliot’s Complete Plays, Milkman (the Booker winner this year), and Gangland Boston, a romp through the history of organized crime in Beantown.

Of the 1087 probably I have not read one third.  Probably there’s another 100 that I read but no longer recall the plot (early Spenser novels, some Chandler, some Hammett). And there are some I couldn’t tell you why I bought (“The Gentle Art of Swedish Death Cleaning”).

I have another 30 or so in Google Books, including Sartre’s Being and Nothingness (!) and Joyce’s Ulysses.  There’s also Marx’s Capital, Moliere’s plays (in English), and a Morimoto cookbook I have no recollection buying but I’m glad I noticed it and will remember to flip through it on an upcoming flight.  But, no, I can’t explain what’s in the Google library. Much of it probably predates my decision to standardize around Kindle because that makes it all simpler for me to read what I want no matter what device I have with me.

The bigger point is: no matter my mood, or energy level, there are books that I have that will amuse and entertain and quite possibly inform me on a plane ride.

A word of warning: you have to actually download the book to the device to read it. E-books require a little advance planning. It doesn’t matter if I downloaded a book I want to read to my Nexus slate. If I brought the iPad on this flight it has to be there. If I’ve forgotten, I remedy with a download via a cellular hotspot at the airport before boarding. (I don’t recall ever downloading an e-book via GoGo but I try to use that service sparingly, not so much to save money as to be kind to my blood pressure.)

Oh, and if I’ve forgotten my reading glasses I can just toggle a bigger font to read. How cool is that?

Nope, I don’t have nostalgia for the years I brought analog paper books. Nope.

Centurion Lounge Coming to PHX?

 

by Robert McGarvey

 

Big news is that just maybe Amex is bringing a Centurion Lounge to Phoenix Sky Harbor – which also happens to be losing its Priority Pass club.

Color me excited.  I am a fan of Sky Harbor – which some call the nation’s best airport – but I have never gushed about the club situation.  At PHX the Priority Pass club was tucked in a tiny (2985 sq ft), out of the way club – built to serve BA passengers but that meant much of the day it was empty so enter Priority Pass. The Arizona Republic reported on the pending closure of the Priority Pass lounge, apparently as the City Council juggled its club options. According to the Republic, “Priority Pass had notified its members via its website that they could not use the lounge after Dec.1. Now, the company says Priority Pass members can access The Club until the new operator takes over.”

If I had to guess, I’d guess Priority Pass will work a deal with a restaurant or two at Sky Harbor to accommodate cardholders.  If the restaurants are the right picks, there may be little grumbling among cardholders who may see it as a step up. I would.

Meantime, according to the AZ Republic, “Delta plans to open a 7,500-square-foot Sky Club lounge in Terminal 3 in early 2019. The lounge will have design inspired by the desert landscape’ as well as food offerings like the Sky Bowl. Guests can ‘build their own bowl choosing from grains, vegetables and proteins,’ according to Delta’s press announcement.” I’ve only flown Delta once in the past six years so no biggie to me…but for Delta regulars this is a big step forward.

United has made noises about building a new club when it moves to Terminal 3 but no timeline has been announced. You have to believe they will if they want to keep pace.

All that is prelude. The big news is Centurion which still counts as the best domestic airport lounge in my book.

The AZ Republic broke the news that apparently Centurion figures into a new lounge that will open at Sky Harbor.

Then the Points Guy dug into this and reported that Amex replied to his inquiry with this statement: “We are always looking at opportunities to bring our premium Centurion Lounges to more airports across the globe and are working closely with the Phoenix Sky Harbor International Airport as this location is certainly of interest for both us and our Card Members. We hope to have plans to announce soon.”

That is not a flat out commitment to opening in Phoenix – but it comes close. It is a definite statement of keen interest.

This would be terrific news for PHX passengers.

According to the Points Guy, “The [City Council] minutes revealed more details about how the space would be designed and included Amex’s signature wall of foliage, a ‘chef’s table’ and an area that could be closed off for private events. The plans suggested a December 2019 or January 2020 opening date.”

On the official Amex opening list for Centurion Lounges in 2019 are LAX, JFK and Denver. No PHX.

But apparently if the right opportunity arises, Amex will pounce on it – and Sky Harbor just could be that opportunity. It’s been kind of a club desert and, no, we may live in a desert but that does not mean we want our airport to be similarly barren.

It would be a small Centurion – second smallest after Seattle per View From the Wing – but we’ll take it.

The drum beats keep getting louder. According to AwardWallet, in a round up of what’s known about Centurion plans, “There is also a strong possibility that a Phoenix Sky Harbor (PHX) location will be announced soon.

Many in Phoenix have puffed with pride as Sky Harbor has notched high praise in various airport rankings – 3 in a Wall Street Journal and 7 in a Conde Nast Traveler ranking.  Add in #1 with the Points Guy and things are looking good – and then there is the club situation which has been downright mediocre.

Which only gets worse when Priority Pass shuts probably soon.

A Centurion would change all that.

 

 

Talking About the Real Credit Union Mission with Bill Bynum, CEO of Hope CU

 

By Robert McGarvey

 

Hope. That one word powerfully sums up the mission of Hope Credit Union, a Mississippi delta based community development credit union with more than $280 million in assets.  And Hope is bringing financial hope to people across the deep south who may not have had a lot of that.

How does Hope do this and stay solvent? Listen up to what Bill Bynum, Hope’s CEO, has to say on that, as well as his provocative views about the real mission of credit unions in today’s America, the CFPB, and a lot more.  This is a conversation that will rock you.

McGarvey: Last time we talked you said that you were going all in on mobile banking because your members did not have home computers. Is that still true?

Bynum: That was a big part of the decision. We were one of the first financial institutions in Mississippi to embrace mobile technology because so many of our members didn’t have home computers.  Mississippi and the deep south also have one of the highest rates of homes that don’t have a landline. People are using their cellphones for communications. We thought it was a great opportunity for us to use that technology to provide services to our members.  It actually has gone better than I anticipated. We thought it would take longer than it did for people to become comfortable trusting their financial transactions over the phone. We’ve seen a steady increase in use of mobile banking. They use it for a variety of things, mostly to check their balances. That’s great. They make better financial decisions. The number of overdrafts has declined.

McG: How many members do you have and what’s the average family income?

Bynum: We are pushing 50,000 members. Disproportionately they are low income. The average household income of a mortgage borrower is less than $50,000. That’s someone buying a house. I’d suspect the average household of all members is well south of that. 75% of our branches are in census tracts where the poverty level has been over 20% for three decades in a row. Entrenched, persistent poverty.  

McG: How do you profitably serve that population? The big banks don’t want to have anything to do with that population. They don’t think they can make money.

Bynum: Banks are making tons of money. They were making money in those markets. Just not as much as they want to make. Mississippi is a rural, low income state. So are Alabama and Louisiana. These people need financial services.  Payday lenders, check cashers, pawn shops are making money hand over fist. Charging these people rates that should be criminal. There’s a reasonable amount of profit to be made. I think the credit union business model is superior because we use the profits we generate to provide lower rates on loans and higher rates on deposits.  We don’t take the profits and hand them to a handful of wealthy shareholders. Our members are our shareholders. I think it’s our business model that allows us to do what we do. It’s appropriate that credit unions are tax exempt. It helps our bottomline.

McG: I’m simplifying but in the US credit unions were created to serve a population banks did not want to serve. Working people. Mainly they made loans – home loans, car loans – and took in savings deposits.  It seems to me a community development credit union such as yours is doing that mission. I’m not sure all credit unions are following that mission.

Bynum: Community development credit unions are clearly focused on serving people in communities that are underserved by other financial institutions, including other credit unions. Many of the credit unions we have merged with are small credit unions that were formed in response to predatory lending and lack of access to financial services. We merged with a credit union in Mississippi for timber workers who started it because the timber company charged exorbitant rates for loans. We merged with a credit union in Montgomery that served local teachers who needed better access to financial services. That is the history of credit unions and community development credit unions take that very seriously.  That is at the core of our mission at Hope.

Mcg: Why aren’t there more community development credit unions?

Bynum:  A lot are doing good work. A challenge [in creating more] is that we are not in a position to sell stock to raise capital. We have grown dramatically since the financial crisis. We are one of the fastest growing credit unions in the country, by rate of member growth and rate of asset growth.  Growth requires that we have capital to keep the regulators satisfied and to protect our depositors. Typically credit unions grow their capital in a slow, organic way. When we are growing rapidly we need to find other ways to raise that capital. We use secondary capital, subordinated longterm debt.  We are one of two credit unions in the country that use that resource more than anyone else. It’s complicated. Many small credit unions don’t have the infrastructure to take that on. We are fortunate we are able to do that. It’s not a simple strategy to pursue but we felt it was important.

McG: What other credit union does this?

Bynum: Self-Help. Between Self-Help and Hope we probably use more than half of the secondary capital credit unions use in the country.

 

McG: What’s your position on payday loans?

Bynum: Payday loans should be illegal. I served as chair of an advisory board at the Consumer Financial Protection Bureau and we were making strides at restricting these abusive financial practices. So many things are stacked against low income consumers. That agency was created to address that. It’s unfortunate it has stepped away from those issues.

McG: I’ll tell you what I think was unfortunate: a lot of credit unions from the beginning were enemies of that agency.  

Bynum: It was misguided. I spoke against it. Financial institutions often have a knee jerk reaction to regulation. Well, we should be regulated because we are stewards of other people’s money and we need to do it in the right way. We saw what happened with the lack of regulation with the financial crisis. As credit unions we should be on the front line of consumer protection. It’s often used as a wolf whistle by the credit union trade associations to organize their members.  It does not serve our members well.

McG: When you talk with credit union peers, what do they think about what you are doing?

Bynum:  People wrote our epitaph – our eulogy – a long time ago. But we are in our 25th year now. It would behoove credit unions to look at what we are doing well and try to emulate it. The country is becoming more diverse.  The communities we serve are increasingly becoming the majority. We have to be relevant to those populations. Financial institutions – credit unions included – ignore them at their own peril.

McG: How do you make money on a small dollar, payday type loan?

Bynum:  We see it as a gateway, as an entry relationship.  People will take out a $200 loan at a payday lender that costs $2000. We’ll refinance that loan at a reasonable rate. Then we’ll get that individual into a banking relationship that will help them.  We don’t look at it as a single transaction. We look at it as part of a relationship.

McG: What kind of rate do you typically charge?

Bynum:  16%, maybe 18% for a small dollar loan. Sometimes it’s less. We have a very cool product that many of our members use called Borrow and Save. You need a $250 loan. We’ll write you a $500 loan where $250 goes into a savings account. When you pay that $500 you have $250 in a savings account that is there for you to tap when you have the next emergency. You now have a relationship with a depository that will help you meet your needs.

You ask how we do this and make money. Well, we do it to break even. Our mission isn’t making as much money as we can.  Our mission is improving lives of people in some of the most distressed places in this country.

 

A longer version of this conversation – in a podcast format – is available here for listening.