Bank Issues, Unavailable Funds
Truckers on the road can be at a disadvantage when it comes to bank issues. Many times, they don't have all of their account paperwork with them on the road to help resolve problems. They usually don't have the time to try to straighten out matters on the phone or in writing. That's where having a home support team member whom the driver trusts can come in really handy.
Another matter that we want to address on this page is that of "unavailable funds." We're not talking about being overdrawn on your bank account (aka having "insufficient funds") but rather not having funds that you thought were in your bank account available to you.
A similar issue is not being able to use what you thought was an open line of credit. We previously challenged hard-core credit card users to use "no credit cards" for 30 days, especially if they have become "credit card dependent."
One reason for this became apparent in April 2012, when the Visa network was down for about 45 minutes. If this situation happened to one credit network for this length of time, it is possible that it could happen for longer periods of time or to more credit networks.
Bank Issues: Fractional Reserve Banking and Bank Runs
Many people around the world have become so accustomed to using credit and debit cards that we no longer think in terms of using cash. What is interesting is that many banks in the USA operate what is called a "fractional reserve" banking system.
According to Wikipedia:
Fractional-reserve banking is a form of banking where a bank maintains a fraction of the total amount in its customers' deposit accounts as reserves (of cash or deposits at the central bank) to satisfy demand from depositors. Funds deposited at a bank are mostly lent out, and the bank keeps a fraction (called the reserve ratio) of those funds as bank reserves.
That page shows that some banks keep only 10% of deposits on hand and loan out the remaining 90%. When people lose confidence in the banking system, there may be a "bank run," which is defined as "the concerted action of depositors who try to withdraw their money from a bank because they think it will fail."
Recall this scene from "It's A Wonderful Life."
The scene got cut short just a little bit, but immediately after the door got closed at 6 p.m., the folks at the Bailey Building and Loan had only two dollars left, which they promptly placed in the vault.
What if that was your bank and you arrived just before 6 and you wanted $20?
We can well imagine someone saying, "Mike and Vicki, that was a scene from a movie, a completely fictitious situation." Agreed. But did you know that there has been a history of bank runs that continues to modern times? An online search on "bank runs" reveals that a significant percentage of bank deposits have been withdrawn from banks in Greece because of economic upheaval there.
More and more people are concerned about bank issues like this, as is plain from the number of times people have searched for the term on Google. A Google trends chart reveals this concern:
Bank Issues: Unavailable Funds in Recent Times
We are taking the liberty of linking to articles that reveal that what we may think of as available become unavailable funds:
Banking Issues: Frozen Bank Accounts
An October 12, 2012 article states that an Executive Order was signed that gives certain leaders the "power to freeze all bank accounts and stop any related financial transactions" from certain persons.
Are we making a mountain out of a molehill? Only if you can prove that there has not been a history of people being framed and wrongfully accused over the years.
What are the chances of any professional truck driver having this happen to him or her? Frankly, we don't know.
Bank Issues for Truckers to Consider
Here is some mental fodder for you to consider: If you have all of your savings in a bank and then there are bank issues of one sort or another -- such as unavailable funds, a bank run, a bank holiday, a bank account seizure, a credit freeze or any other dire financial situation -- what will you do to survive financially?
Of course, we recommend having a personal emergency fund and a truck fund from which you pay for things on the road. We do not recommend taking huge sums of money with you on the road, like one trucker did. Of course, this driver drew attention to himself and was nailed for narcotics. Still, let the point remain: If you are found to have a large amount of cash with you on the road, you could be accused of something that you may not be guilty of.
Bank Issues: Non-Traditional Trucker Monetary Systems
We had a Twitter direct message correspondence with someone in late 2012 who said that he has his paycheck loaded onto his Comdata card. Other people may have chunks of money sitting in other virtual accounts like PayPal.
We are not saying that any of these monetary systems will fail.
We are only saying that you should consider what to do in case they do. Please consider all of your options.
In baseball, a "backstop" may be defined as "a wall, wire screen, or the like, serving to prevent a ball from going too far beyond the normal playing area." Do you have a backstop in place for your money?
A "firewall" has been defined as "A fireproof wall used as a barrier to prevent the spread of fire." In the event that one or more bank runs begins, how will you protect the money you've placed there for safe keeping?
Money saving tip: The way and the place where you keep your money are just as important as the amount that you save.
True, some people like diversifying their investments. But investments are usually long-term financial obligations. What will you do to survive during times of potential bank issues and unavailable funds. Plan ahead. Don't be caught wanting should "crunch time" come.
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