The Moneychangers

"No. In daytime we'll have a clerk on hand to handle queries. The rest of the time there'll be no one except customers." "Aren't you afraid of robberies?"

Alex smiled. "The auto-teller machines are built like fortresses, with every alarm system known to man. And TV scanners one in each money shears monitored at a control center downtown. Our immediate problem isn't security it's getting our customers to adapt to new ideas."

"It looks?" Ms. Peacock pointed out? "as if some have adapted already."

Though it was early 9:30 A.M. the small bank already had a dozen people in it and others were arriving. Most were women.

"Studies we've made,?' Alex volunteered, "show that women accept merchandising changes faster, which is probably why retail stores have always been so innovative. Men are slower, but eventually women persuade them."

Short lines had formed in front of the automatic tellers, but there was virtually no delay. Transactions were completed quickly after each customer had inserted a plastic identifying card and pressed a simple selection of buttons. Some were depositing cash or checks, others withdrawing money. One or two had come to pay bank card or utilities bills. Whatever the purpose, the machine swa1lowed paper and cash or spat them out at lightning speed.

Ms. Peacock pointed to the auto-tellers. "Have people learned to use these faster or slower than you expected?"

"Much, much faster. It's an effort to persuade people to try the machines the first time. But once they have, they become fascinated, and love them."

"You always hear that humans prefer dealing with other humans, rather than machines. Why should banking be different?"

'Whose studies I mentioned tell us it's because of privacy." There really is privacy (Jill Peacock acknowledged in her by-lined, Sunday edition feature story), and not lust with those Frankenstein-monster tellers. Sitting alone in a booth in the same money shop, facing a combination TV camera and screen, I opened an account and then negotiated a loan. Other times I've borrowed money from a bank I felt embarrassed. This time I didn't because the face in front of me on the screen was impersonal. The owner of it a disembodied male whose name I didn't know was miles away.

"Seventeen miles, to be exact," Alex had said. 'The bank officer you were talking with is in a control room of our downtown Headquarters Tower. From there he, and others, can contact any branch bank equipped with closed-circuit TV."

Ms. Peacock considered. "How fast, really, is banking changing?"

"Technologically, we're developing more swiftly than aerospace. What you're seeing here is the most important development since introduction of the checking account and, within ten years or less, most banking will be done this way." "Will there still be some human tellers?"

"For a while, but the breed will disappear quickly. Quite soon, the notion of having an individual count out cash by hand, then pass it over a counter will be antediluvian as outmoded as the old-fashioned grocer who used to weigh out sugar, peas, and butter, then put them into paper bags himself." "It's all rather sad," Ms. Peacock said. "Progress often is."

Afterward I asked a dozen people at random how they liked the new money shops. Without exception they were enthusiastic.

Judging by the large numbers using them, the view is widespread and their popularity, Mr. Vandervoort told me, is helping a current savings drive…

Whether the money shops were helping the saving drive, or vice versa, was never entirely clear. What did become clear was that FMA's most optimistic savings targets were being reached and exceeded with phenomenal speed. It seemed as Alex expressed it to Margot Bracken as if the public mood and First Mercantile American's timing had uncannily coincided.

"Stop preening yourself and drink your orange juice," Margot told him. Sunday morning in Margot's apartment was a pleasure. Still in pajamas and a robe, he had been reading, for the first time, Jill Peacock's feature story in the Sunday Times-Register while Margot prepared a breakfast of Eggs Benedict.

Alex was still glowing while they ate. Margot read the Times-Regzster story herself and conceded, "It's not a bad piece." She leaned over and kissed him. "I'm glad for you." "It's better publicity than the last you got me, Bracken."

She said cheerfully, "Can never tell how it'll go. The press giveth and the press taketh away. Tomorrow you and your bank may be attacked."

He sighed. "You're so often right." - But this time she was wrong.

A condensed version of the original news feature was syndicated and used by papers in forty other cities. AP, observing the wide, general interest, did its own report for the national wire; so did UPI. The Wall Street Journal dispatched a staff reporter and several days later featured First Mercantile American Bank and Alex Vandervoort in a front-page review of automated banking. An NBC affiliate sent a TV crew to interview Alex at a money shop and the videotaped result was aired on the network's NBC Nightly News.

With each burst of publicity the savings campaign gained fresh momentum and money shop business boomed.

Unhurriedly, from its lofty eminence, The New York Times brooded and took note. Then, in mid-August, its Sunday Business and Finance section proclaimed: A Banking Radical We May Hear More About.

The Times interview with Alex consisted of questions and answers. It began with automation, then moved to broader terrain.

QUESTION: What's mostly wrong with banking nowadays?

VANDERVOORT: We bankers have had things our own way too long. We're so preoccupied with our own welfare, we give too little thought to the interests of our customers.

QUESTION: Can you quote an example?

VANDERVOORT: Yes. Customers of banks particularly individuals ought to receive much more money in interest than they do. .

QUESTION: In what way?

VANDERVOORT: In several ways - in their savings accounts; also with certificates of deposit; and we should be paying interest on demand deposits that is, checking accounts.

QUBSTION: Let's take savings first. Surely there's a federal law that places a ceiling on savings interest rates at commercial banks.

VANDERVOORT: Yes, and the purpose of it is to protect savings and loan banks. Incidentally, there's another law which prevents savings and loan banks from letting their customers use checks. That's to protect commercial banks. What ought to happen is that laws should stop protecting banks and protect people instead.

QUESTION: By "protecting people" you mean letting those with savings enjoy the maximum interest rate and other services which any bank win give?

VANDERVOORT: Yes, I do.

QUESTION: YOU mentioned certificates of deposit.

VANDERVOORT: The U. S. Federal Reserve has prohibited large banks, like the one I work for, advertising long-term certificates of deposit at high interest rates. These kinds of CDs are especially good for anyone looking ahead to retirement and wanting to defer income tax until later, low income, years. The Fed hands out phony excuses for this ban. But the real reason is to protect small banks against big ones, the big banks being more efficient and able to give better deals. As usual, it's the public which is last to be considered and individuals who lose out.

QUESTION: Let's be clear about this. You're suggesting that our central bank the Federal Reserve cares more about small banks than the general populace?

VANDERVOORT: Damn right.

QUESTION: Let's move on to demand deposits checking accounts. Some bankers are on record as saying they would like to pay interest on checking accounts, but federal law prohibits it.

VANDERVOORT:Next time a banker tells you that, ask him when our powerful banking lobby in Washington last did anything about getting the law changed. If there's ever been an effort in that direction, I've not heard of it.

QUESTION: You're suggesting, then, that most bankers really don't want that law changed?

VANDERVOORT: I'm not suggesting it. I know it. The law preventing payment of interest on checking accounts is very convenient if you happen to own a bank. It was introduced in 1933, right after the Depression, with the object of strengthening banks because so many had failed in the previous few years.

QUESTION: And that was more than forty years ago.

VANDERVOORT: Exactly. The need for such a law has long passed. Let me tell you something. Right at thus moment, if all the checking account balances in this country were added together, they'd total more than $200 billion. You can bet your life the banks are earning interest on this money, but the depositors the bank's customers aren't getting a cent.