It was a wonderful holiday weekend. Metro and the police did an amazingly good job of moving hundreds of thousands of people, and when the weather wasn't bad it was superb.
There's even good news from the Swift Couriers of the Postal Service. A dividend check from Chase Manhattan, always postmarked June 30 but never previously received until after July 4, was delivered to me this year on July 2. And a card from Morton Raff of Chevy Chase postmarked July 3 was on my desk on July 5.
Morton wrote, "I was told today by persons in two different departments of Suburban Trust that they will not charge the $15 annual fee they had previously announced for Visa credit cards. There was a ruling yesterday from the attorney general of Maryland forbidding them to do so.I had not seen anything in the paper about this ruling and therefore suggest that you look into it and tell your readers what you find out. Earlier, I had been preparing to shift my account to the First National Bank of Maryland, which is now accepting new accounts without charging an annual fee."
We did publish a brief story on the ruling. Morton must have missed it.
When I read our story, I was dismayed to note that it didn't clarify the status of people who had been told by Suburban Trust that in order to cancel their cards and avoid being billed for a $15 "membership fee," they would have to cut their cards in two and return the pieces to the bank together with a written request that the account be canceled. People by the hundreds had followed those instructions, and then found themselves in limbo when Maryland's attorney general banned the $15 fee.
They wondered whether those who had followed Suburban Trust's instructions would now be sent new cards. Or would they be told the bank was going to hold them to their previous decision to cancel the cards? Would some or all of them be invited to reapply for cards, with new cards being issued only to those who meet new criteria? Would they be told nothing? Our story didn't say.
So first I called the Customer Inquiries number and asked what the bank plans to do. A woman there told me that the bank would reinstate all the canceled cards. Then I called a bank vice president and asked whether I had been given the right information. He said he'd like to confer with his colleagues and call me back in half an hour. In 30 minutes he called back and said no decision had been made yet, he had no idea when a decision would be made, but just as soon as the bank decides on a policy it will notify its customers (and presumably its former customers).
First National Bank of Maryland officials were not available over the weekend, so I can't verify what that institution plans to do.
Meanwhile, your Master Charge, Washington Shopping Plate, Central Charge and several other cards can still be used without payment of an annual "membership fee." POSTSCRIPT
Richard S. Brown of Burke, Va., wrote a letter recently to the senior vice president for personal banking services at Continental Illinois National Bank, which issued Dick's Visa card and had just announced that it was about to make him an annual "member" at $15 a year.
Dick's response was so logical and so pungent that I hope his excellency the senior vice president read every word of it. I wish I had the space to print the full text here.
Quoting the bank's own words, Brown made these points:
1. You say your costs are rising, but so are the prices of merchandise and services charged to the cards. If merchants pay you the same percentage as before, your revenue from merchants climbs as inflation increases.
2. If your operating costs rise at the same rate as everything else affected by inflation -- including your rising revenues from merchants -- why are these rising costs such a "pernicious threat" to your credit card business?
3. When purchases are not paid for in full within the bank's time limit, Brown asked, "Doesn't the unpaid balance become, in effect, a loan from your bank to the cardholder and a legitimate basis for your assessment of finance charges? And isn't it true that it costs you less to process this type of loan than it does for you to approve a loan request from someone off the street, what with the credit checks and paper work the latter entails? Indeed, isn't the former type of loan completely handled within the normal processing of your computer system?"
4. Brown cited statistics that last year bank earnings rose 20.5 percent, or nearly half again as much as the cost of living (bank Costs ) had been inflated. He also made six other devastating points and concluded that he can live without Continental Illinois a lot better than Continental Illinois can live without customers. Bravo!