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One of the reasons our smartphone service in the United States is improving so quickly is an FCC rule from 2003 that says consumers can bring their phone numbers with them when they change carriers. If it weren't so easy for consumers to change phone companies, carriers would have a vice clamp on your nipples and they would feel less pressure to compete aggressively. In this case, government meddling in the free market worked like a charm.

The banking industry is a lot like the phone industry before the 2003 FCC rule on phone number portability. For consumers, changing banks is a gigantic pain in the ass. I have my automatic bill payments linked to my existing accounts. I'd need to reorder checks and make sure the outstanding payments clear. I'd need to learn what services the new bank has, and order new credit cards, and get a new ATM card. It's all doable, but I'm not going to jump ship just because my bank is being a jerk about one thing or another. It's too much work. Let's call this situation a stickiopoly. Banks do compete, but not as aggressively as they would if consumers could switch at the drop of a hat.

So what would happen if banks had to adhere to a "bank consumer portability" law? Suppose you could switch banks as easily as giving your new bank your social security number and asking them to switch all of your credit cards, mortgages, and bank accounts automatically. And let's say the new bank also has the capability to switch all of your automatic payments (water bill, energy bill, car insurance, mortgage, etc.) at the same time with no effort on your part.

If switching banks were easy, a bank would magnify its risk any time it engaged in sketchy behavior such as LIBOR manipulation, ridiculous overdraft fees, or lending discrimination. Consumers could punish banks for being jerks. For example, I wouldn't want to be associated with a bank that was guilty of LIBOR manipulation. I'd figure the rest of the bank's management was rotten too and they're probably screwing me in some way I'm not yet aware of. If it were easy to change banks, I'd do it. But it's not easy, so I don't. (My LIBOR example assumes at least one bank wasn't in on the scam.)

And this brings me, very indirectly, to my point for today. On 7/14/12 I published a Dilbert comic that mocked banks. The original version of this comic used coarse language that reads funnier to me. But newspapers wouldn't have found that language acceptable. Today I submit for your consideration both the published version and the unacceptable version. Which do you prefer?

This one got published...

 
This was the original version...



 
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Jul 16, 2012
Thank GOD for the government!!!! They saved us by allowing, no, DEMANDING, that cellular phone companies allow us to keep our numbers!!! Oh, thank GOD for the federal government!

Oh, wait a minute. When the federal government set up the cellular phone frequencies, the evil businesses themselves asked to make sure that consumers can't carry their phone numbers with them if they changed services. And the feds went along. So the feds giveth, and the feds taketh away.

For you to say that the feds should be lauded for opening up the carry-over of the phone numbers after they restricted them in the first place is typical Adams positioning. The federal government is the fount of all wonderfulness, and when they aren't, they surely will be some day.

How about if the effing feds just got out of the way, and let the free market determine phone number portability. The companies who didn't allow it would compete with those who did. Who do you think would win?

You are an elitist. You think that the stupid, ignorant hoi-polloi are just sheep waiting to be taken advantage of by evil corporations, and only the FEDERAL GOVERNMENT, as incredibly enlightened as they are, can save us from the evils of capitalism.

The more central the planning, the more you put your faith in fewer and fewer people. You assume that the ignorant masses are too stupid to determine the difference between those companies who allow transportability of phone numbers and those who don't. God, how stupid we all are. Not only stupid, but incapable of learning from our mistakes.

I hope you never get your socialist utopia. If you do, you might really regret your decisions. But then it will be too late. You don't get freedom back easily, once you've given it away.
 
 
-3 Rank Up Rank Down
Jul 15, 2012
@ Joshgans, the government is doing pretty much what Scott suggested. https://www.moneysmart.gov.au/managing-my-money/banking/switching-bank-accounts

As far as the strip goes, I prefer the uncensored one.
 
 
0 Rank Up Rank Down
Jul 15, 2012
I liked the one that got published better. I don't find the term "made it a !$%*!$ offensive in the least. I just think "harder" works better in this case. I found this one very funny when it showed up in my RSS feed.
 
 
+2 Rank Up Rank Down
Jul 15, 2012
I believe that the jury is still out on the LIBOR issue - and we may never get a true picture of it. It's certainly possible that banks engaged in some manipulation for their own benefit. But, especially given how wide-spread it was, I find it hard to believe government(s) weren't complicit, if not out-right encouraging it. After all, the Fed and it's counterparts were using extraordinary measures to decrease interest rates. So why wouldn't they also want LIBOR to be as low as they could push it? And since banks weren't actually lending to each other at the time, the reported rates were obviously estimates. Fraud? Possibly, but I'm not sure that it's so clear cut. But banks are the whipping boys do jour for all of our problems. -- Because, you know, it couldn't be the Fed's ultra-low rates during the boom that caused the bubble; or our housing policies (including Fan/Fred, HUD) that encouraged (and forced) lending to uncreditworthy borrowers. It had to be the fat cat bankers who did what our government encouraged and demanded, but for a time made a profit on it. Oh, no - profit! There's another dirty word we should censor.
 
 
Jul 15, 2012
I prefer the published version, more due to the flow than the language.
 
 
Jul 15, 2012
The unpublished version is slightly better, but i think that on some level you resent the self-censorship and chose the weakest possible alternative. Instead of 'harder', both 'rougher' and 'tougher' sound harsher (and I'm sure there are others), or you could have gone for the deliberate understatement 'It makes cross-selling ...problematic' (though perhaps that would only work in the uk).
 
 
Jul 15, 2012
In the UK, the term Cross Selling doesn't mean much (or I haven't come across it before) so although they are both funny, the punch line amusement factor needed figuring out here.
 
 
Jul 15, 2012
>In this case, government meddling in the free market worked like a charm.

I kinda disagree that this counts as government meddling. The idea that one carrier can "own" a phone number, and no other carrier can give it out, is based on government rules to begin with. This is government tweaking its own rules, not meddling.

Shout-out here for credit unions - most participate in "shared branching", so I can deposit, withdraw, etc. from any shared branch, even though I'm a member of a CU that is thousands of miles distant from where I currently live.
 
 
+1 Rank Up Rank Down
Jul 15, 2012
Definitely prefer the uncensored version.
 
 
+3 Rank Up Rank Down
Jul 15, 2012
I prefer the scrubbed-up version. There is a place for cursing, but the shock it produces ought to serve a useful purpose, and here, it doesn't.

Your idea of "card number portability," though, is a good one and ought to be promoted seriously. If the new federal agency, FCPA, can be persuaded to implement it they will actually have done us some good (which I had not believed possible up to now, and certainly hasn't happened yet).
 
 
Jul 15, 2012
I actually enjoyed the published one when I saw it last week, but *did* find the self-censored one better once I read it.

About the banks, there may be privacy/sharing of information rules, etc that prohibit a bank from seamlessly transferring your account information. So there may not be as much a need to force this, as to *allow* it. I do know that I have been able to transfer my IRA's and mutual funds quite easily between those ty[es of providers in the past. Different rules ?
 
 
-1 Rank Up Rank Down
Jul 15, 2012
Oh, also a great idea, the ability to switch banks! Switching phone providers isn't always as easy as you say, though. When the law first came out, I was on Sprint and my husband got himself and the kids phones on Verizon. Yes, I was more than slightly annoyed when hubby said I "had to" switch to Verizon, because then my phone would only be $10 per month. (I could've added him to my plan, but, no, that would have been too easy.) When I tried to switch my number to Verizon, both Verizon and Sprint gave me hassles. Finally after 2 months of going back and forth, visiting stores, filling out forms, and talking to people on the phone, I gave up, canceled my Sprint account and got a new number on Verizon. (But now we're back on Sprint.)
 
 
Jul 15, 2012
Equally amusing.
 
 
-2 Rank Up Rank Down
Jul 15, 2012
!$%*!$%*
 
 
-2 Rank Up Rank Down
Jul 15, 2012
The !$%*!$% version, definitively.
 
 
+13 Rank Up Rank Down
Jul 15, 2012
This is an idea that has been around for some time. I suggested it in Australia (http://www.heraldsun.com.au/opinion/switching-banks-a-trying-effort/story-e6frfifo-1111115283256). The government there agreed but didn't do much to really get what Scott was talking about. I testified before Australian parliament on the issue in 2008 (http://www.scribd.com/doc/25359687/Competition-in-Retail-Banking).

In 2012, an Australian government report recommended doing this again (http://banking.treasury.gov.au/banking/content/reports.asp). Looks like something may be introduced soon.
 
 
 
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