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The Moral: Look Out For Your Customer
September 21, 2007

Some interesting items since I last posted, before my computer passed away.



Unless you’ve been held incommunicado for the last few months, you know that banks and mortgage brokers are experiencing problems in the mortgage business.  Specifically, 15% or so of all mortgages are considered sub-prime, and many people who have received those sub-prime loans are in trouble, some losing their homes, as interest rates have ratcheted upwards.  It is not good for business if you are a banker.  You’ve just lost many future customers.  Clearly, some in the mortgage business did not have their client’s interest in mind when they offered a 125% adjustable loan starting at 1%.

Help is on the way:

“Quietly, Kroger supermarket chain has been beefing up its retail banking services. Mortgages, home equity lines of credit, insurance products can all be had at the local Kroger.

"It’s about driving more people to the store and bringing them back," Kathy Kelly, president of the Kroger Personal Finance division formed in 2004, told the Lansing State Journal recently.

“…competition breeds innovation, but the challenge from Kroger and other retailers, like Wal-Mart, threaten the most core value proposition of traditional banks. …That’s capitalism, after all.”

One of Kroger’s early successes was offering a cheap health insurance for pets.  Wal-Mart is adding a new prepaid Visa debit card to its branded credit card and other money services while planning to increase more than fourfold the number of "MoneyCenter" alcoves in stores.

Wouldn’t you think that a Kroger or a Wal-Mart would tailor their product offerings to the health and welfare of their customers?  I think that’s the lesson here for all of us.

Email me a landfair3554@comcast.net

Posted by Mike Landfair on September 21, 2007 | Comments (0)