This is not the experience you should give a member

First of all, let me make this very clear up front. The experience I am about to describe involved a bank, not a credit union. That said, it could very much have been your credit union.

Here’s my story.

I have been with a large Virginia based bank since 2004 when my then realtor suggested I use the bank for a bridge loan. I was selling a house in New Jersey for much more than the house I was buying in Virginia. The process was easy and the transaction was flawless. Best yet, I only needed the bridge for about 45 days.

Fast forward to August 2018. Now that my wife and I enjoy the freedom of an empty nest, we have decided to move across town to be closer to her parents. We found the perfect home for us and made a low ball offer under the assessed value. To our surprise and delight, after a small counter, we agreed to a purchase price and closing date. Now we needed to sell our existing home of 14 years, which we now own outright.

At the start of our search, we determined that we would not likely time things well and would need time to do some things to make our current home better positioned for sale. Our plan was to take the equity in the existing home and use that to “bridge” the difference between the new home and the cash we planned to provide at closing. With great hope, off to our “banking partner,” my wife went, with hopes of securing a quick HELOC credit increase.

At the local branch, my wife approached her trusty banking partner that she often sees. They know each other by first name. My wife explained the situation, detailed the plan and explained how after the sale of our existing home, we’d actually have excess cash. Our banker friend said a HELOC seemed to make great sense. After that, things turned ugly.

My wife was handed a gloss covered brochure style HELOC application and told to take it home to complete. She brought it home and I was dismayed. How is it that my “banking partner” couldn’t start the application process in the branch? Afterall, we already had an old, small HELOC with the same bank. Now we were expected to have to enter all the data the bank already had on file for us onto a piece of paper that was so small, we could hardly read our own handwriting. Surely they could have started the application in the branch by pre-populating the obvious such as applicant name, address, and account numbers. Why was I, the customer, doing them an administrative favor?

We were told we could mail the application back or return it to the branch so it could be routed to the banks real estate lending group, 100 miles away. I was dumbfounded by such an analog approach. My personal information was going to be in some persons interoffice mail pouch touring the Commonwealth of Virginia. What could possibly go wrong? Plenty. Reluctantly, we moved forward.

A few days passed and my wife received a call stating we’d need to prepare tax records as evidence of our annual earnings for the past three years. Keep in mind that since 2009 my paycheck has been deposited electronically every two weeks. I also have quarterly investment dividends that have gone into checking via ACH since 2006. Looking at internal data would have shown that my average money market balance for the past 12 months was enough to cover about 50% of the bridge. Additionally, they wanted us to disclose any credit cards or loans we had outstanding. Wait a minute! I had just received a Lifelock alert telling me the bank had pulled a credit report. So why did I need to manually provide an outline of my credit cards? My credit report showed a very high credit score and I carry no card debt.

We started second-guessing our decision to go the route of a HELOC. And that’s when things turned even uglier. We were told it could be weeks before an appraiser could make it to our home. This would impact when we listed our house for sale as we were told we could not list the house prior to arranging the line. Why was an appraisal visit even needed when it was painfully clear that the HELOC amount was substantially lower than the tax assessment and similar recent sales? I get it; there are banking laws and regulations involved here, but the communication was horrific.

At this point, we decided to call our financial advisor to discuss some plan B options. One option was to borrow against our investment portfolio. Doing so would be a little more pricey from a rate perspective, but there were no upfront fees associated with it and no penalty associated with a quick “payoff.” After some quick math and scenario analysis, it was determined this would cost us less than a HELOC.  Furthermore, it could be done instantly “because we have all your financial data already.” That’s when the bells went off in my head. My bank knows nothing about after 14 years of doing business with them.

It was then that I decided I do not need my “trusty” bank for this important “life event.” They were more concerned with the standard operating procedure, rather than visiting the length and quality of our 14-year relationship. Fraught with friction and uncertainty at the hands of my bank, I told my financial advisor to move ahead. At that point, he also determined that it was in my best interest to “self-fund” my “bridge” by harvesting gains and losses in my investment portfolio. None of the funds were related to my retirement funds, so there would be no penalty. Once the homes are settled, I can simply reinvest the net proceeds between the transactions, covering my self-funded bridge.

My bank completely blew it. They never considered my entire financial picture nor the economics of the transaction. Aside from a huge loss of time, my bank will experience a financial loss. First off, they are not getting the HELOC business from me. But that’s just the start. After 14 years I am going to leave my “financial partner” because they showed me that their process and attempt to move product, is more important than helping a customer conduct a very economically sound transaction.

Being a financial partner is very much about understanding the bigger picture. It is about using the data you gathered through a relationship to help a member meet financial goals. It is also about empathy and ensuring open communication, with expectations understood and options made clear.

Life is full of opportunities for a financial institution to be a real hero. Or not.