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FOUR OF CANADA’S five biggest banks recently announced they’re going to raise service charges, even though they continue to rake in billions in profits. Taking advantage of people, when they’re struggling to make ends meet during the pandemic, is beyond comprehension—and it’s in direct conflict with my values.
In their defense, the banks stated that the increases were made after careful consideration and that other options were available to customers. This is classic bank-speak. Roughly translated: It means we’ve thought about this carefully and concluded that we can get away with it. We’re confident that, while our customers will whine some, in the end they’ll take it on the chin and not move their business. After all, with our competitors doing it as well, where are they going to go?
The banks aren’t the only companies not walking the talk. Another company I’m invested in likes to tout its strong support for mental health. It even hosts its own annual mental health awareness day. I bought into the good work the company was doing. But less than a week after its special day, it terminated hundreds of people. I’ve experienced termination, along with the depression, embarrassment, and fear of being unable to pay the mortgage and take care of the kids. I can’t see how terminating employees during a pandemic supports mental health.
But if you thought that was bad, the way the company gave notice was brutal. Because of the pandemic and in the name of efficiency, most firings were done either over the phone or via Zoom. The conversations were usually short and to the point. “Your services are no longer needed. Thank you for your contribution and please clean out your workstation by the end of the week.” Corporations need to show some compassion—simply because it’s the right thing to do.
The decision I now struggle with: Should I sell shares of these companies that I own? Or is it worth sacrificing my personal values to earn good investment returns?
My recollection is that Canadian banks did not receive the government bailouts that US banks did during the last financial collapse. Perhaps they are better run, take prudent risks and manage their expenses better than their US competitors?
The five banks in Canada are a typical monopoly cartel. They can prevent competitors from entering the market, so they can charge monopolistic rates.
Here in the US, there are still many small banks and credit unions…..and, looming on the horizon, online banks and fintechs. US banks realize they have to compete for customers, and if they charge too much everyone will go elsewhere.
Anyone who has ever been laid off will tell you, they were not fired. “Fired” implies that they did something wrong. It is amazing how many fortunate (apparently never laid off) people get that simple concept all wrong.
Another simple concept that often escapes social justice complainers is that the companies that provide our goods and services, are not charities. They need to control expenses and make a profit. Otherwise, they will fail. The valuable goods and services that they provide will disappear with them. They owe financial prudence to their investors who risked their money to make it all possible.
That sounds nice but we can’t all be sociopaths. Companies need to do more than make money; do you not think that companies that destroy our health (tobacco), ruin our environment (oil), or foster injustice (private prisons) owe us a little more?