U.S. Bank received positive feedback from the Federal Reserve regarding the "Stress Test" - The Supervisory Capital Assessment Program. In materials released by the Federal Reserve on Thursday, May 7, 2009 the preliminary findings indicate that U.S. Bancorp did not need any additional capital buffer... which means "we passed."
Maybe it's just me but I think the Treasury Department dropped the ball when it developed the "test." They did not really get at the core of sources of stress for banks. If they had only asked a teller at an average branch what truly causes stress for the bank, they'd have been able to provide a detailed answer! With that in mind here are a few ideas for . . .
Stress Tests That WOULD Really Determine The Safety and Soundness of a Bank
1. The following scenarios have all happened at one or more offices of U.S. Bank, although my memory may have failed me when it comes to the details.
2. U.S. Bank has the greatest customers and the greatest employees in the entire banking industry. Any remarks that seem unflattering toward any individual customers or employees are not intended to be reflection on all.
The Alfred Hitchcock Test
Scenario 1: Your branch has a family of pigeons who decided to nest in the space just above your ATM. When customers use the ATM they find the surrounding area has been "decorated" by pigeon droppings. As unsightly and messy and smelly as the bird droppings are, the real concern is the racket the pigeons make when a customer tries to use the ATM. It tends to scare the crud out of customers. How do you resolve this stressful issue?
Scenario 2: Your branch has a family of birds living in a nest in a beautiful tree near your front entry. Each spring the Mom and Dad have a new batch of kids and, like all parents, they are very protective. However, that means that as customers enter and leave the branch, the parents will swoop down, sometimes striking the customer, to warn them to stay the heck away from their babies. How do you resolve this stressful issue?
The Toxic Avenger Test
Scenario 1: One of your branch's best customers is a local commercial mushroom plant. The employees get paid every other Friday and most come straight to the bank after work to cash their check. Unfortunately that means they are coming straight from the damp, dark, manure-filled buildings where the mushrooms are grown. The smell is overwhelmingly awful and the burning in the eyes is even worse. How do you resolve this stressful issue?
Scenario 2: Your branch has a mysterious customer who comes in regularly to access his safe deposit box. He smells like, what can best be described as, cat urine. The smell lingers long after he leaves the branch - especially in the vault. How do you resolve this stressful issue?
The Plan 9 From Outer Space Test
A customer calls you from a pay phone in another state. He needs information about his account and is expecting a large transfer of funds any day. After properly identifying him, you tell him the money apparently has not arrived. He is frustrated but says he will call back later. Thirty minutes later he calls back asking for the same information. You tell him nothing has changed. He says, "they told me it would be there by now! Where is it?" You ask who told him it would be there. He responds with, "They did. I just heard from them a second ago." You say, "Okay but maybe if you can tell me WHO it is, maybe that will help me track it down." He answers with, "You wouldn't understand." You say, "Really, why is that." He says, "Because they don't talk to just anyone." You say, "Uhh . . . " He says, "Oh wait! It's them. Just a second. Yes, uh huh, yes. Okay. Thank you. Alright they say it should be there now. Can you check again?" You say, "I'm sorry. The balance in your account is still $6.00." He goes nuts. "What? Are you $#%&*@ incompetent! I just told you the $%*#$^ money is in the account. My head is hurting so much right now; you don't even understand! I need that money or they're going to kill me! I've been to their planet before and I don't ever want to go again! Oh NO! They're coming for me. It's them! It's them!!" And then the phone goes dead. How do you resolve this stressful issue?
The Edward Scissorhands Test
Because of cutbacks in the landscape maintenance budget, it is hard to have the outside of our branches looking as nice as we might want. For the past year you have really struggled with the overgrown shrubbery and trees around the branch. Over and over you work with our way fine facilities folks and the less than helpful landscaper to try to get things under control. Still the problem persists. You make one last attempt to get things corrected. As a result, the landscaper tells his crew to really trim back things at your branch. You come to work the next day to find that the greenery has, indeed, been trimmed back. In fact in most cases, no greenery remains - just the stubs of what once was a very nice - but overgrown - rhododendron. Within a few weeks almost all your shrubbery is dead. How do you resolve this stressful issue?
The Upstairs Downstairs Test
Your branch is over 50 years old. When it was built it included an apartment upstairs where the manager was allowed to live as part of his compensation package. These days neither the manager, or anyone else on the staff, has had need of the apartment, so the bank (always looking for sources of fee income) rents it out. Most of the folks have been good tenants but the new guy is kind of obnoxious. He plays his stereo really loud so that the thump can be heard downstairs during operating hours - not to mention that he often listens to Abba, The Bee Gees and The Moody Blues! In addition, since we won't let him smoke in the apartment, he often stands outside, near the entrance to the bank. He's very friendly but some of our female customers and employees say he is a bit "overfriendly" sometimes. Not to mention that he leaves a nice little pile of cigarette butts on the ground when he's done. How do you resolve this stressful issue?
The National Lampoon's Vacation Test
Your branch has a drive up canopy with the height clearly marked. Unfortunately a really nice man in a camper decides to drive through, certain that his 15 foot tall camper will clear the 14 foot space. Amazingly, he is wrong. Now your drive up is damaged and might collapse at any time. How do you resolve this stressful issue?
The Mothra Test
Every few years your community gets hit with an infestation of Pandora Moths. These little puppies have a wingspan of two to three inches and are very cute and fuzzy. Okay, most people don't find them cute, but they are certainly fuzzy. And big. They love to hang out in relatively cool spaces - often on the sides of buildings. And there's not just a few of them - they congregate by the hundreds and thousands, covering (and I really am not making this up) whole sides of buildings! The drive up at your branch is largely shielded from the sun and is a popular spot for Pandora Moths to gather. So popular, in fact, that you've had to contract with your janitor to come in every morning, hose them off the wall and scoop their remains into trash bags to haul to the dump. Unfortunately, one morning as the janitor is working on the daily clean up effort, a car zips around the corner of the building - going a bit too fast - and at the last minute sees the janitor working in the drive up lane. The customer hits the brakes to avoid running into the janitor. The water, mixed with all the fuzzy, slimy carcasses of the moths, create a "slick as snot" like mixture, which the braking car hits, causing it to slide into a support post at one corner of the canopy, which then collapses. Fortunately, no one is hurt. How do you resolve this stressful issue?
So, when it comes to REAL stress tests, U.S. Bank has a history of not only surviving them but flourishing even in the most difficult of circumstances. We're the bomb baby! Which reminds me of another story . . .
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