Decision Making in Geezerhood

The waitress returned for the third time, order pad in hand.  "How we doin' here folks?  Are you guys ready to order or would you like another few minutes?"  There was a tone of sweet condescension in her voice, likely the result of her reaction to our grey hair.  I imagine she was thinking: come on geezers, make up your minds!

One of the stereotypes of older people is that they have difficulty making decisions and the decisions they finally come up with are often flawed.  Like most stereotypes, this one has a kernel of truth but also distorts the real picture, and is flat-out wrong in certain cases.  For instance, my wife and I have always taken a long time to order in a restaurant because we share each dish and we are both particular -- so it takes some time to select things we both will like.  Being geezers is irrelevant.

However, there is ample evidence from research on aging that the average performance of older people on many types of decisions is both slower and less optimal than younger people.  This is particularly true when the decision involves remembering, evaluating, and comparing many pieces of information that vary in relevance to making an optimal choice.  The cognitive declines in memory, analytic reasoning, and executive functioning that are common in older adults make these kinds of decisions more difficult and results in sub-optimal choices (Henninger, Madden, and Huettel, 2010).

Financial decision-making is one realm in which the consequences of poor choices can be very important. The cognitive deficits associated with aging have been found to be particularly problematic in this context. For example, a Brookings Institute study comparing age groups on a variety of financial products found that older people wind up paying higher fees, penalties, and interest rates across a wide range of credit transactions, including credit cards, mortgages, and car loans (Agarwal et al., 2007).  Interestingly, the relationship between decision quality appears to be U-shaped, with the most optimal decisions made by those around 50.  One explanation of this curvilinear function is that young people, though they have high cognitive abilities lack experience and background knowledge, whereas older people have a great deal of experience and knowledge but have difficulty applying this because of cognitive deficits.  In middle age there is an optimal trade-off of experience and cognitive functioning.

Another important aspect of financial decision-making involves making choices that require an assessment of risk of loss versus probability of reward.  For example, maintaining an investment portfolio of 100% bonds entails very little risk but provides limited rewards, whereas a portfolio of 100% equities entails much more risk but also may provide significantly greater returns over time.  And of course there is considerable variation in the risk levels of individual stocks and bonds that requires evaluation and comparison of complex information in order to make an optimal choice.

Unfortunately, research evidence concerning the quality of decisions involving risk indicates that geezers tend to make poorer decisions than young people.  Henninger et al.(2010) recently summarized the data succinctly:

...older adults’ real-world decisions involving risk are often of objectively worse quality than those of younger adults, both in laboratory and real-world settings, with an abrupt decrease in decision-making skill observed in individuals over 70 years of age (Korniotis & Kumar, in press). As examples, older adults within that age range earn 3%–5% lower risk-adjusted annual returns (Korniotis & Kumar, in press) and obtain systematically worse outcomes on a wide variety of financial instruments (Agarwal, Driscoll, Gabaix, & Laibson, 2007), even when controlling for confounding factors like income, investment horizon, and desired rate of return... In short, substantial evidence demonstrates that older adults are more likely to make poor-quality financial decisions, often leading to significant negative personal consequences.

In line with the "conservative geezer" stereotype, one source of these sub-optimal decisions might seem to be a general tendency toward risk aversion even when some degree of risk is adaptive. However, the evidence indicates a more complex picture. Though older people do exhibit detrimental risk aversion in some circumstances (Mather, 2006), they also may show the same or even more risk preference as young people in other situations.  For example, if the benefits of an alternative with more risk are emphasized, older adults may weigh them more heavily than young people.  This stems from the general tendency of older people to be more optimistic and positive than younger people, a phenomenon I explored in an earlier blog.  In the financial arena this tendency may lead to poorer choices and susceptibility to scammers (Ross, 2010).

So far the picture looks pretty bleak, but fortunately I can end on a couple of positive notes.  First, recognizing the challenges of geezer decision-making allows the development of ways of presenting information modifying the context of decision making to compensate for declines in cognitive functioning, for example by reducing the memory load in decision tasks and by presenting information in ways that can be more readily related to older adults' greater past experience (Henninger et al., 2010) and that may more clearly balance the positive and negative aspects of risk alternatives (Ross, 2010).

Second, it is clear that there is considerable variability in the quality of decision-making by geezers, to the degree that some older people outperform younger adults.  This variability has been shown to be tied to differences among older people in the degree of cognitive decline -- an important fact because it means that it isn't age per se that leads to poorer decisions but rather it is the degree of specific types of neurological deficit.  And there is abundant evidence that the rate and amount of cognitive decline can be altered by life style choices, with the most dramatic effects coming from continuing physical exercise throughout middle and old age (see my blog Jogging the Memory of a Geezer for a review of this research).

Yet another reason to lace up those walking shoes -- it might keep you solvent!

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Agarwal, S., Driscoll, J., Gabaix, X., & Laibson, D. (2009). The age of reason:  Financial decisions over the life-cycle and implications for regulation.  Brookings Papers on Economic Activity, 2, 51-117.

Henninger, D.E., Madden, D., & Huettel, S.A., (2010). Processing Speed and Memory Mediate Age-Related Differences in Decision Making. Psychology and Aging, 25, No. 2, 262–270.

Mather, M. (2006). A review of decision-making processes: Weighing the risks and benefits of aging. In L. L. Carstensen & C. R. Hartel (Eds.), When I’m 64 (pp. 145–173). Washington, DC: National Academies
Press.

Tons of Fun: Humpbacks in Hawai'i

They're back!

Each winter Hawai'i gets thousands of repeat visitors, many of them of the species Humanica Snowbirdae, giving a much appreciated boost to our economy.  The visitors I look forward to the most, however, don't spend a dime.  They weigh an average of 40 tons and are the size of a bus.  I'm referring to Megaptera Novaeangliae, or Humpback whales, who come here for some of the same reasons as Humanica Snowbirdae;  the warm clear ocean waters, idyllic weather, romantic mating habitats.

However, the Humpbacks differ in several respects from most Snowbirdae.  For one thing Humpbacks give birth here to their 1-ton 12-foot long calves.  The actual moment of birth of a Humpback is still something of a mystery -- no one has been able to document the event itself.  Nor are scientists certain why the whales don't just stay in their home territory of Alaska to give birth rather than swimming 2,000 miles to Hawai'i.  One reason may be that the shallow warm waters around the Hawaiian Islands are a safer nursery for the babies because they can escape predation from Orca whales, who don't often range this far south, but no one knows for sure.

Another difference between Humpbacks and other visitors is that the Humpbacks don't eat during the entire time they are here, whereas Humanica Snowbirdae are noted for their enthusiastic consumptive behavior.  The Humpbacks' diet consists mostly of tiny plankton and krill as well as small fish like mackerel which aren't found in enough abundance in Hawaiian waters to sustain them.  This 2-3 month starvation diet is particularly hard on new mothers, whose fat reserves have to be enough for both them and for their newborn calves to develop strength and stamina for the arduous trip back to Alaska.  Maybe for this reason females are larger than males, one of the few mammals for which this is the case.

Humpbacks seem to have a lot of fun while they are here, like many other visitors do.  But Humpback "fun" can be very dramatic, particularly when they breach, launching themselves almost completely out of the water and landing with an impressive splash visible for miles.  You can imagine the strength it must take to propel 40 tons of blubber straight up out of the water -- and I've seen individuals do this repeatedly for 20-30 times.  They also like to slap their pectoral fins or their tail flukes on the surface making a tremendously loud noise.  Scientists think this behavior is associated with courtship and social dominance, but in their home feeding grounds Humpbacks also use these behaviors to cooperatively round up food.  Whatever the reason, it sure looks like they're having a great time.

One of the most widely known behaviors of Humpbacks is their singing.  But most people aren't aware that (a) only the males sing and (b) nearly all singing takes place just before and during migration and while the whales are here in their breeding grounds.  The strange underwater sounds that sailors heard for centuries weren't identified as coming from Humpbacks until the 1960's, when they began to be studied scientifically.  Here are a few of the recent findings detailed by the conservation organization Whale Trust:

A typical song is ... made up of 5-7 themes that are usually repeated in a sequential order. A song typically lasts 8-15 minutes (although it may range from 5-30 minutes), and then is repeated over and over in a song session that may last several hours... A striking feature of the song is that it gradually changes or evolves over time. Each year, different sounds and arrangements of sounds form to create new phrases or themes. These changes are slowly incorporated into the song, while some older patterns are lost completely...The change in the song display seems to occur in a collective or common way throughout the population. Usually after a period of several years, the song is virtually unrecognizable from the original version. In some cases, however, the song has completely changed in just two years! Despite the constantly changing nature of the song, all singers in a population sing essentially the same version at any one time. In fact, all the singers in the North Pacific (that is, whales in Japan, Hawaii, Mexico and the Philippines) separated by thousands of kilometers sing essentially the same version of a song at any one time...The explanation for the collective change of the song, especially over such vast distances, is currently unknown.

Humpbacks were nearly driven to extinction by relentless hunting during the 1800's and early 1900's.  Hundreds of thousands were slaughtered during this time for their oil, meat, and bones. During the period 1910-1916 more than 60,000 humpbacks were killed just in the southern hemisphere.  The North Pacific population was reduced to just 1,000 animals at the lowest point. They have been protected for about the past 50 years and have made a slight comeback, with the current world-wide population about 6-10 thousand, 50% of whom overwinter in Hawai'i.

Hopefully we can continue to co-exist peacefully with these magnificent gentle giants. They are truly extraordinary sentient beings....and tons of fun.
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Animal Diversity Web (University of Michigan)
Earth Trust: Humpback Whales
National Geographic:  Humpback Whales
Whale Trust:  Humpback Songs

Fingerprints On My Ceiling

My wife and I are the third owners of our house here in Hawai'i, which we love very much.

Like many Hawaiian houses, ours has what is called an open-beam ceiling.  When you look at the ceiling you are actually seeing the underside of the roof  -- there is no insulation and no attic, not even a layer of dry wall sheeting.  The beams are larger than normal roof joists and not only support the roof, they are a distinct visual element of the house, painted white against the natural wood of the tongue-and-groove roof/ceiling planking.

Mainland readers may be having trouble with the concept of a ceiling without insulation, but it is quite common here because the weather doesn't require it.  For the same reason many houses in Hawai'i, ours included, have no central air-conditioning and no heating.

When our house was built about twenty years ago one or more of the carpenters wasn't wearing gloves when the roof planks were installed.  I know this because if you look closely you can see fingerprints on the ceiling, most likely the result of the oils in the carpenter's skin darkening over the years.

Some might consider this feature a flaw, but I think it is kind of fascinating.  For one thing, it is a clear reminder of an individual human contribution to creating my house, and certainly a reminder that is a uniquely personal one.  Each time I look at those fingerprints, I visualize somebody up on the roof struggling to fit each plank into position, maybe thinking "just five more and we can quit for the day and go have a beer...."  Real people built this house, and they worked long and hard to do it.  Twenty years later the signs of that hard work are still evident, and the fingerprints represent an obvious connection between the workers' sweat and our current happiness.

I doubt the carpenter who left his fingerprints ever thought that one day people would be pondering who he was and appreciating his efforts on such a personal level. He knew he was creating something that would last into the future of course, but his impact on people would be through the structure he was building, not through the loops and sworls on his fingertips.

Come to think of it, we all leave traces as we go through our daily lives, though seldom as uniquely identifiable as fingerprints on a ceiling, and like the carpenter we're often unaware of the influence we have on the experiences of other people. Our traces aren't necessarily physical residues.  Our interactions with people alter their experience and change the direction of their lives, even if the impact might be small and subtle.  A smile, a word of encouragement, a derisive gesture or condescending comment may alter a person's mood and behavior and in turn determine how they interact with others, the effects continuing to ripple outward.  It seems likely that when you meet a stranger there is a high probability that they represent some small amount of your own previous traces.  This suggests that the quality of your interaction with the stranger is determined in part by your past behavior with other people.  Buddhists might regard this as one aspect of Karma, the causal theory that our intentional actions have consequences that may return to us through long and complex causal chains.

The plausibility of this interconnectedness can be illustrated by the work of the famous psychologist Stanley Milgram on what he called the Small World Phenomenon (other have referred to it as the "six degrees of separation principle').  Through a series of clever experiments Milgram demonstrated that any two people can be connected to each other through only 5 or 6 intermediaries.  For example, in one study Milgram asked people to move a letter to a random stranger located in a geographical distant location. Since no one knew the stranger, they were to pass on the letter to a friend who might know the other individual, or who would pass it on to another person who might.  On average it took just 5-6 moves to reach the target.  Friendship in this case is the trace that ripples outward.

It is possible that the carpenter who left his fingerprints on my ceiling is long gone, maybe even dead.  Yet the trace he left still exists, and it will continue to have an impact for a long time to come. Assuming of course that someone has read this blog........

I'm Speechless....

As 2011 winds down and limps to an end, so has my blogging.

It's not that there aren't plenty of things that have caught my attention and might deserve my cunningly incisive analysis, for example:

• The bizarre and frightening GOP/TP candidate-of-the-week-club.  Surely there are more competent and compassionate possibilities than these.....
• The upside-down logic of the GOP/TP that the solution to our economic woes is to cut taxes on the wealthy and raise them on ordinary workers. I'm referring of course to the recent attempt of the GOP/TP to block an extension of the payroll tax cut while simultaneously fighting to retain cuts for the wealthy. (Actually, I commented on this somewhat prophetically in my blog last September, Punishing the Victims, Part Deux. )
• The puzzling assessment in the media and by Democratic Leaders that a measly 2-month extension of the payroll tax cut finally passed by Congress is somehow a brilliant victory.
• The stunning failure of the so-called Super Committee to produce a workable deficit reduction plan, illustrating yet again the dysfunction of our congressional leaders.
• A recent study by University of Michigan showing that the average net worth of members of congress more than doubled from 1984 to 2009, while the net worth of the average American family declined slightly, and other research that shows the growth of income inequality has tracked very closely with measures of political polarization (see also my earlier blog about our misperceptions concerning wealth inequality in America).

 And on the international front, we have sad reminders that no matter how lousy our own political and economic situation, it is a million times better than what many people around the world have to contend with:

• Peaceful protests in Syria continue to be brutally punished by a ruthless government.  A wrenching interview by Barbara Walters with "President" Assad revealed a man that was pathetically and dangerously out of touch with reality.
• The pride and promise we saw in Egypt has evaporated in a new and more violent round of demonstrations by those who seem to want nothing more than to fulfill the democratic promises they thought they had won.
• A laughably strange and crazy yet thoroughly despotic leader in North Korea dies (yeah!) but is replaced by his mini-me son who promises to be just as bad for his people and for the world (sigh).

All of these events are important developments.  But somehow I can't find the words to convey my emotional and intellectual reactions to them in any satisfying way.  The best I can do is to offer my sincerest hope that the coming year will show at least a glimmer of sanity and moderation in the world generally and in America in particular.

Happy New Year!

What It's Like To Be Robbed

The burglars broke into our house through a back window, a classically vulnerable location where it was dark, not visible by neighbors or people passing by, and adjacent to an area of vacant land where they could make their escape.

I had left the sliding windows in one of the bedrooms open slightly for ventilation and placed rods in the tracks so the windows couldn't be opened further, or so I thought.  The thieves tried one window, gave up, and then must have reached in and used a stick or something to dislodge the rod in the other window.  We know the point of entry because of the damaged screens and the muddy footprints that originated there and then tracked through the rest of the house on our brand new carpet.

This happened while we were 6500 miles away in Bhutan, a very peaceful country where the influence of Buddhism makes this kind of crime rare.  Actually it is also rare in our small Hawaiian community relative to other parts of the U.S., but it still does happen and seems to be on an uptick with the economic downturn. We learned of the break-in while we were on our trip in emails from our neighbors and from our handyman who checks our house each week while we are gone.  We have asked them NOT to contact us about major problems while we travel unless there is something we can actually do about the situation -- our philosophy is why ruin a trip when it won't accomplish anything?

In this case, though, we were able to give them instructions that turned out to be crucial.  For example, we asked them to look for our spare car keys and discovered that the thieves had taken them, possibly planning to return to steal one or both cars.  Our neighbors were able to secure the garage by parking one of their own cars in front of the door to prevent this until we returned and had the ignition locks changed.

Our attitude toward home security has always been pretty casual because we don't have a lot of expensive art, jewelery, or electronics.  Investing in an alarm system or a safe seemed hardly worth it, given the value of our potential losses.

Now we realize that our loss was far greater than we imagined -- not in monetary terms, but in the psychological impact the break-in has had on us.  The emotions we have felt have been a complex mixture of fear, anger, violation, vulnerability, contamination, loss of control, and sadness.  The sadness and anger arise from our realization that many of the items taken were more valuable to us than we thought because of their intimate sentimental meaningfulness.  For example, most of my wife's stolen jewelry was collected during our travels over the past 40+ years and although it wasn't terribly expensive, each piece was associated with a particular memory and cannot be replaced.  Our anger in this case arises partly from a sense of unfairness: the thieves got very little while we lost a great deal.

The feelings of violation and contamination were particularly strong at first, when the muddy footprints and jumbled contents of closets on the floor were vivid signs that an intruder had walked through every room and had pawed through every drawer.  Judging from the large size of the footprints, one of the burglars was male. But there were also indications that one was female -- ten pairs of my wife's shoes were gone, carefully selected from many other pairs, and some of her favorite purses and scarves.  [Male readers should consult a woman to gain an appreciation for the depth of response my wife had to this.] 

Vulnerability and loss of control are very uncomfortable feelings, and throughout our lives we go to great mental and behavioral lengths to avoid them, even when the control and security we think we have achieved is illusory. In my case this has meant spending a great deal of effort in closing the barn door after the horse has left. I modified the windows throughout the house to prevent future thieves from duplicating the successful break-in.  I installed motion activated lights to eliminate the dark areas where burglars could work undetected.  And at least for a while we have been more careful to lock doors and windows even when we leave for a short while.  We've also tried to convince ourselves that this was just a crime of opportunity and that we really don't present a juicy target to desperadoes.  Illusion or not, doing these things feels very positive.

There is some good that has come out of this.  I realize what wonderful neighbors and friends we have and how much they are willing to do on our behalf.  They provide a very comforting balance to the despicable behavior of the burglars.

I also have learned a worthwhile lesson about attachment to possessions --namely that although I can pride myself on not being beguiled by their monetary value, I have unwittingly invested a great deal of emotional capital in them. But the wonderful experiences that generated their sentimental value cannot be stolen and thieves can never truly cash in on their loot. The experiences, not the objects, make us rich.  If  I can just convince myself of the truth of this pearl of wisdom, I might even be able to feel a degree of compassion for the burglars -- the experiences they have violating other people can never bring them any real benefit.

Bummin' With Buddha In Bhutan

My wife and I recently spent about three weeks in the Himalayan kingdom of Bhutan.  It has been in the news recently because the country's beloved young king got married in a stunningly exotic ceremony that made a great visual "human interest" piece for media broadcasts.  Bhutan is also known for its policy of judging the worthiness of public programs and new laws against a standard of "Gross National Happiness," a rather different approach than some of the ideas being promoted currently in our own policy debates.

As a tourist destination, Bhutan offers what many of us seek in a travel experience;  a colorful, exotic culture with a rich and important history in a beautiful physical setting.  However, this tiny country also has several unique characteristics that make it particularly fascinating. For one thing, it is a country that -- though friendly and welcoming once you're there -- has historically closed itself off from the outside world.  Tourists were not allowed in Bhutan until 1974, and even now are tightly controlled and even banned in certain areas to protect the culture.  A visitor must travel as part of a supervised group or as many do (including us) with a personal guide and driver, enter or leave the country only via the state airline, Druk Air, and spend a minimum per day of $200 (this will increase to $250 in 2012).  These policies restrict the number of tourists and their activities and so far have mitigated some of the problems mass tourism usually brings to underdeveloped countries. 

It is also a fiercely vertical country, an attraction especially to those who enjoy multi-day trekking expeditions.  We stuck to day hikes and traveling by car.  Even so, my gps measured an accumulated elevation gain of 92,000 feet as we journeyed west to east and back, crossing high mountain passes between picturesque valleys along the country's only main "highway," a very scenic but scary road 1 1/2 lanes wide in most places.  Average moving speed according to the gps was 18 mph, leading some days to what we called "Bhutan Butt Rash."

One aspect of Bhutan traditional culture that appeals to many tourists is the prominence of Buddhism in people's daily lives, especially the many colorful festivals held each year in monasteries throughout the country. Most visitors from western countries are not familiar with Buddhist beliefs, and though Bhutan's monastic rituals and ceremonies are puzzling they are exotically photogenic in the extreme.  Buddhism was first introduced around 800 a.d., but really reached a peak in the 14th-17th centuries with the establishment of hundreds of fortified monasteries call Dzongs that are now an architectural hallmark of the country (the style is similar to the famous Potala Palace in Lhasa, Tibet). The monastic order still wields great influence in the political, economic, and social institutions of Bhutan, perhaps more than any other country in the world at this time.

Possibly because of Bhutan's self-imposed isolation in modern times, traveling there is a little like taking a trip in a time machine to a Himalayan Buddhist society of the 1500's or earlier.  This is a "magical" experience in two senses of the word.  First, most visitors are charmed by what they encounter, though they probably have little understanding of it.  Second, belief in magic and supernatural powers is pervasive and at the core of everyday life.  These beliefs are not essential to Buddhism though they are often presented to visitors as if they were.  Rather, they derive from earlier religious traditions in the Himalayas that included shamanistic practices, animism, and beliefs in myriad demons and deities that controlled one's fate, and many of these beliefs were retained as Buddhism was modified to fit local sensibilities. We were repeatedly shown sites where Guru Rinpoche, the founder of Bhutanese Buddhism, subdued a local demon and then meditated for 3 months in a nearby cave, usually leaving an imprint of his body in the stone.  Even his arrival in Bhutan was magical -- he flew in on the back of a tiger who was actually a manifestation of one of his eight consorts. Many other historical figures are credited with feats of similar supernatural powers, ranging from creating a new animal from the bodies of two other species to diving under water with a lamp that did not extinguish.  It seems that the monastic order not only tolerates such beliefs but actively promotes and controls their expression -- many of the rituals performed during the yearly festivals at monasteries are based on such ideas.

The magical aspect of Bhutanese culture is perhaps not that different than similar beliefs in many other countries and religious orientations, including our own, but may be problematic in Bhutan in at least a couple of ways.  First, Bhutan is a country that is emerging from its historic isolation with a jolt. Somehow these traditional beliefs must be reconciled with the wider world that Bhutanese will encounter, and this may involve adjustment difficulties at both the personal and societal level.  Up to now there have been no challenges to magical and supernatural beliefs and I wonder if the Bhutanese monastic order has considered how to adapt to such challenges, as has been done successfully in other parts of the world where Buddhist practice is quite compatible with secular and scientific modes of thinking.

A second problem for me is that Western visitors to Bhutan come away with the mistaken impression that magical thinking is an essential characteristic of Buddhism in general -- for instance, that in order to be a Buddhist you must believe that monks can fly on the backs of tigers.  An example is a man from the U.S.we met as we left Bhutan who had just finished a National Geographic tour of the country. He really enjoyed Bhutan, he said, "but I really didn't buy all that Buddhist stuff."  National Geographic organizes high-end expeditions all over the world that supposedly provide highly informative and educational travel experiences. Yet this man's comments suggested a rather murky understanding of what he saw and rather than opening him to the possibility of an alternative religious approach the tour seems to have had the opposite effect. This is unfortunate, because my own study of Buddhism has convinced me of its value without any reliance on flying tigers.

Whatever their beliefs, the Bhutanese have an undeniable charm and gentle dignity about them that is refreshing in today's climate of strife and polarization.  Although I fear the odds are against them, I hope that they retain these "magical" qualities as their society encounters the outside world.

I'm keeping my fingers crossed.
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Suggested Reading:

What Makes You Not a Buddhist by Dzongsar Jamyang Khyentse
Buddha by Karen Armstrong

Bankers' Math -- 0+0=5

Banks are scrambling to find new ways to charge for their services now that new regulations restrict some of their more lucrative practices, like automatically signing up people for high cost overdraft protection for debit cards, or charging merchants $.40 per debit card transaction.  I've already written about higher ATM fees, which have risen in some cases to $4 or $5.  Other increases include charges for returned items like checks or bounced electronic payments -- charges which are in principle justified, but not at the levels now being levied (for example, $30 for a declined ACH electronic transfer which requires little human intervention).   And one of my favorites is a $1 to $2 fee just to find out your balance via an ATM.

The fee hikes and increasing number of fees are bad enough, but banks are apparently reluctant to reveal publicly what their fees are so that consumers can make comparisons.  According to a research study presented in Consumer Reports, when 400 banks across the country were contacted "...fewer than half of the bank branches complied easily with a request for fee schedules. Under the Truth in Savings Act, banks are required to provide this information. However, only after two or more requests did 55 percent of branches provide fee schedules."

Of  course, providing information in a clear and informative way may have negative results for the banks.  For example, a recent study also by Consumer Reports found that only 22 percent of bank customers have opted-in for debit card overdraft protection now that new Federal regulations require banks to get permission before signing them up.

My own local bank, First Hawaiian, has recently shown that the Aloha Spirit is fine as long as it doesn't interfere with profits.

In the envelope with my monthly statement the other day was a little slip of paper detailing changes in account fees.  There were the usual hikes like those mentioned above plus a couple of particularly puzzling ones.  The first was an "Inactive Account Fee" of $10 for each month the account is considered inactive.  Does it really cost the bank $10 per month to keep an account in its electronic database when there are no transactions into or out of it?   Damn, the price of electrons must be skyrocketing!

Another one is a particularly good example of Bankers' Math.  First Hawaiian doesn't charge a fee for receiving a paper statement each month (yet).  If you elect to go Green and have only electronic statements sent to you that also is free.  However, if you choose to have both a paper and an electronic statement the fee is $5 per month, despite the fact that the electronic image used to print and mail a paper statement is likely the same one available for viewing online.

In other words, according to Bankers' Math, 0 + 0 = 5.


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Related Blogs:

Bankers' Math -- Parts Un, Deux, Trois, Quatre, Cinq