Can't help myself with this but I need to have a go at all banks today.

Here are multi-billion companies, with all the latest technology, smartest people, etc in the world. Yet when it comes to approving a piddly little loan, of say $10,000, for a good customer (with a great credit history and track record) that they can’t make a decision themselves UNLESS they have a letter from the customer’s accountant saying what the purpose of the loan is.

Today I got another URGENT email from a client wanting this type of letter, coupled with a few phone calls following up the matter. The loan is for $12,000 against a home valued at $532,000 with only $223,000 currently outstanding. The couple are both working at the same employer for the past 10 years, earning about $120,000 combined.

"The loan won't be approved unless you get this letter from your accountant" the email from the bank employee states.

"We need it urgently!" it goes on.

Come on Mr Banker! Accountants have enough work on their plate as there is already without having to regularly meet URGENT demands of their time to do a stupid, meaningless letter to satisfy your loan files. The banks will say its required for compliance purposes. But if you need compliance then why don’t they simply ask the client to sign a statutory declaration of the loan purpose.

Accountants do not charge (well I don't anyway) for this type of letter nor do we get any of the trailing commission associated with it either. Yet we need to drop all over client matters to appease the bank.

But what does the letter mean anyway? Here is a example which will knock the socks off you.

I was asked a few weeks ago by a bank to give a reference to a former client of mine that re-appeared on the scene after 7 years away. In that time, he went bankrupt, he changed his name, his companies were de-registered by ASIC and had not lodged a tax return or Business Activity Statement in the past 6 years. He wanted me to write a letter saying that he was earning $100k per annum from one of his de-registered companies. Of course, I told the truth and provided the name change, non-lodgments, deregistrations & bankruptcy details. I suggested the bank do their own checks first on public available data rather than hassling someone like me.

But that was not enough.

Not ONE but TWO separate bank representatives called me asking for confirmation of his income. I asked if they got my fax which both said yes. I then asked them what more do they want from me? Blind Freddy would tell you that the loan should not be approved. But what happens? They approve the loan! No wonder the global financial crisis has come about with stupid decisions by banks like these!

There are a million other things that annoy me with the bank. Don't get me started on their credit card interest rates & the correlation to their profits and the national credit card debt.