Banking without the Internet

Cafe customers use free wireless Internet.

TEXT OF STORY

Kai Ryssdal: Technology can fix a lot of things. Not everything, of course. But if you can bring the conveniences of modern electronic life to bear on a problem, often you have a better chance at making things right. That's part of how we might make the global economy work better for more people. Technology and finance are natural partners.

Banks are almost universally online. It's a trend so ingrained that some are now charging fees for paper copies of monthly banking statements. How fast we get shoved toward higher-tech banking could well be an early test of new consumer protections -- for people who have Internet connections.

Our special correspondent David Brancaccio takes our series on globalization, Economy 4.0, to the land the Internet forgot in Northern New Hampshire.


David Brancaccio: So what would you say is the best thing about living in this part of the wilderness?

Kathy Johnson: The people, the sense of community. It's just wonderful

Brancaccio: And what's the worst?

Johnson: The Internet.

Brancaccio: The Internet. I had a feeling you were going to say that. That's why I'm here.

We're talking in the kitchen of Kathy Johnson's farm house outside Colebrook, N.H.

Brancaccio: All right, quick, let's get back that browser...

Johnson: OK, I want to do this fast before we lose it.

Brancaccio: And it's creep...

Johnson: It's chugging. It's chugging along.

Brancaccio: Dunno, I wouldn't call it chugging, Kathy. It's kind of creeping.

Johnson laughs

Cable and DSL don't make it to the house. Kathy felt Internet via satellite was too intermittent, so now it's Internet through the mobile phone system.

Johnson: This may take a while...

Today's digital performance of "Waiting for Godot" is so Kathy can get a look at her bank statement online. The bank with her personal account still sends monthly statements printed on paper, through the mail, for free. Old school. But this year, one of her business accounts started charging money for paper statements.

Johnson: That's right.

Brancaccio: How much?

Johnson: $9.99 a month.

Brancaccio: Really?

Johnson: Yes.

Brancaccio: When did you actually notice?

Johnson: My bank statement, my paper bank statement! is how I found it!

It's a growing trend in banking. For instance, Bank of America has something called the "E-banking" account where paper statements and routine visits to a human teller cost money. It's now in more than three dozen states. B of A says techno-savvy customers seem fine with online-only in exchange for no minimum cash balances in the account. Bank analysts say it's an experiment being watched with interest throughout the industry. But with the latest FCC figures showing as many as 24 million people -- that's one in 12 -- living in dead zones, devoid of fast Internet, some consumer advocates are skeptical.

I talked to Lauren Bowne, a staff attorney at Consumers' Union in San Francisco.

Lauren Bowne: The first thing that comes to mind are people without Internet access at all. But also very low-income people, the elderly and generally, people who have spent a lifetime managing their finances on paper. They're used to doing it that way, and it will disproportionately affect them if they have this choice taken away from them.

Kathy Johnson saw that play out in her own kitchen.

Johnson: In fact this morning, there's a lady who comes and cleans my house. I told her a little bit about this new paper statement fee. And she was horrified. $9 or $10 a month or whatever it is, that's a lot of money for someone who makes $10 an hour and can't even afford computer access or who doesn't even know how to use a computer.

At least one U.S. senator has called for the new Consumer Financial Protection Bureau to crack down on charges for paper statements. The bureau, now being set up in Washington, is the brainchild of Harvard professor Elizabeth Warren. She told me her team could try what's called "crowd sourcing," in which consumers, via computer, become the eyes and ears of this new financial cop on the beat.

Elizabeth Warren: Look, technology is going to be terrific. It's gonna change cost structures. It's going to give us new opportunities to analyze and understand problems. But it's important for this agency not to forget that not everyone has been swept up into the new technological age. There are many people who for different reasons, different circumstances are still dealing in a paper and phone call world, and this agency belongs to them as well.

Emerging, new technology could make it easier for consumers to shop around if they don't like the terms of their bank account. Still, modern accounts, with direct deposit and online payments, can be complicated to switch. Then there's Kathy Johnson's challenge.

Johnson: Take it back to being in the rural area, you don't have a lot of options for other banks. We have two banks in town.

Brancaccio: You just go online. There must be tons of compete... Oh, wait a minute, your Internet doesn't work all that well.

Johnson: That's right!

Johnson chuckles

In Colebrook, N.H., I'm David Brancaccio for Marketplace.

Ryssdal: David and Economy 4.0 are online for us too. He's blogging and sharing stories from the road.

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