Forgive me if I’m looking obsessed, but someone has to do it. The Nation was out with an email blast this morning touting its branded affinity VISA card issued by UMB Bank in Kansas City. The magazine’s associate publisher, Peggy Randall, helpfully identifies UMB as “a small, regional bank recommended by the Move Your Money project, a project we support,” and therefore in accordance with the goals of the Occupy movement.
So who is UMB Bank, really? It’s yet another iteration of the classic Money Mover’s institution: flush with more money than it can invest locally, it loads up on securities. (Parenthetically, why should a magazine based in New York encourage doing business with a bank 1,200 miles away on localist grounds?) According to its latest annual report, 46% of UMB’s money is invested in securities, and another 6% is on deposit with other banks—which comes to over half. They don’t provide details on the securities, but they’re almost certainly a mix of Treasury bonds, mortgage bonds, and corporate bonds—utterly conventional financial market stuff. Just 37% is out in loans—and 0.8% in small-business loans, beloved of the small bank fanclub. They are big regional players in mutual funds, wealth management, and private banking, all moderately to seriously upscale stuff. And, like the big guys, they’re looking to make more money out of fees, rather than traditional deposit-taking and loan-making.
But that’s not all. UMB is big in the Health Savings Account (HSA) racket. HSAs, a snake-oil favorite of right-wingers, are tax-sheltered savings schemes that typically come with high-deductible health insurance policies attached. If you need a doctor, you can dip into the savings account, because you’re going to have to pay thousands of dollars out of your own pocket before the insurance kicks in. The philosophy behind HSAs was summarized in a recent press release (“UMB Announces 36 Percent Increase in Health Savings Account Balances”) by Dennis Triplett, CEO of UMB Healthcare Services:
We are excited to see the continued adoption and acceptance of consumer-directed health care plans by individuals looking to better manage current health care costs while saving for the future. Advantageous for the employee and the employer, consumer-directed health care empowers individuals to take personal responsibility for their health and expenses, and enables employers to better reign in rising health care costs.
Translation: if people have to pay through the nose to visit the doctor, they’re going to think twice before booking an appointment. That’s “empowerment” for you.
A number of studies (by the GAO, the Employee Benefit Research Institute, and the Commonwealth Fund) have found that while HSAs and associated high-deductible plans can save employers money, they also tend to attract the young, the healthy, the well-off, and people who think they’re unlikely to get sick. Taking the likes of those out of the broader insurance pool makes the remainder harder and more expensive to cover and does nothing for the currently uninsured. It’s an individualized, market-centered approach to the problem that is antithetical to everything The Nation stands for. But there’s nothing like the imprimatur of the Move Your Money folks to dissipate skepticism among those who wanna believe.
I don’t begrudge The Nation trying to raise money. God knows they need it (though, if truth be told, a Romney victory would probably put them deep in the black). And if an affinity credit card raises significant money for them, they should go for it. But it would be nice if they didn’t encourage political illusions about finance when shaking the cup.