Tuesday, August 13, 2019


If I may be permitted to rant a bit.

I do not suffer fools well.

One area of “fools” is in the financial industry. 

The employees of many banks, realtors, mortgage companies, etc., regardless of their official title, are not much more than data entry clerks.  When gathering information for financial transactions they often have no real knowledge or understanding of the what and why of what they are asking, and blindly and strictly follow a pre-written check list prepared by their employer, requesting the information in the exact form and format as identified in the checklist and needing to tick off each and every item.

They do not know how to handle something that provides the same information requested in another form or format, or if the applicant does not process internal information in the exact same form and format identified in the checklist.  If an applicant uses an obscure, but accurate and effective, software program that is not referenced on the checklist, or processes things manually or in a different form or format than referenced on the checklist, the clerk cannot understand or accept it – even though it accurately provides the information that is needed to review and process the application.  

Here is a real-life example.

A client was applying for a home equity loan.  He was a self-employed professional.  His business operated as a Subchapter-S corporation and he received a salary from his corporation.  He was the only shareholder of the corporation and it’s only employee.

I used basic Quickbooks for the client’s corporation’s bookkeeping, but I did not use, or need to use, the separate Quickbooks payroll software program to prepare and record the client’s pay.  I calculated his weekly paycheck and withholdings manually.  I knew the percentages for federal and state payroll tax withholding and determined the federal and state income tax withholding based on what I wanted to have withheld for the year to cover a variety of income sources and avoid an underpayment penalty, and not using any schedule or table.  He wrote himself a check each week for the net pay, or sometimes directly transferred the amount of net pay from his corporate checking account to his personal account.

The bank officer needed to verify his salary.  The client provided a copy of the previous year’s tax return and Form W-2, which were items on the checklist used by the bank officer.  The checklist also asked for the client’s most recent pay stub, with current cumulative year-to-date detailed income and withholding information.  The client did not have, or did not need to have, any pay stub, cumulative or otherwise.

The bank officer did not know what to do, and could not proceed further with the application because she did not have a physical hard copy pay stub in front of her so she could tick it off on her checklist.  The client called me while he was at the bank and the officer told me she needed his pay stub.  I tried to explain and did at one point get a bit curt with her, and had to work hard to keep from calling her an idiot. 

Eventually I created what looked like a pay stub on Word and sent it to the client as an email attachment.  The bank officer could now move on because she had a physical piece of paper in her hand that looked like a pay-stub, and she could tick off “recent pay-stub” on her checklist. 

The bank officer’s checklist did not offer as an alternative, for example, a copy of the most recent federal payroll tax form 941 or, for a NJ employer, the state NJ-927 and WR-30.  It asked for a pay-stub and only a pay-stub, and nothing else, could provide the requested information.

Clearly the bank officer did not care about the substance or accuracy of the information being requested and provided, only that the exact form and format asked for on her checklist was provided. 

The solution is for banks, realtors, mortgage companies, etc. to properly train their employees on the what and why of the information needed and to be able to recognize and evaluate substance over specific form and format.  And do away with checklists and instead create detailed and substantive explanations of the information needed.  And, of course, hire more intelligent employees.

Thank you for letting me rant.

I am interested in hearing from others who "feel my pain".


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