The Story Behind Those Commerce Bank Pens

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It's tempting, at this time of the week, to consign your unread New Yorker to the pile of other unread New Yorkers and tell yourself that you will read all those long features in the future, on Sunday maybe, or when you go on vacation. But you really shouldn't miss Nick Paumgarten's feature on the financial crisis, which is so thoughtful, poignant, and genuinely interesting that even all you Tim Murphy types will find it readable. It's not online, so to tempt you we did some grunt work and transcribed a snippet that explains the ubiquity of those blue Commerce Bank pens.

A few years ago I was signing a check with a blue translucent ballpoint pen stamped with the logo of Commerce Bank, and I realized, suddenly, that these pens were everywhere. I wondered about it for a second and then let it pass. Commerce, a retail and commercial bank based in New Jersey, was founded in 1973 by Vernon Hill II, who had developed sites for McDonald's. He aimed to bring the brand loyalty of the fast-food business to the local bank. The branches, which he called "stores," stayed open seven days a week, often well into the night. There were no fees, and free lollipops and dog biscuits in the lobby. He aimed for what he called a unique brand of WOW." The bank was very successful. Hill built for himself one of the biggest private homes in the state of New Jersey. In 2006, the bank gave away twenty-eight million pens, which found their way into the kitchen drawers and jacket pockets, as well as into the collective doodad mind, of consumers up and down the Northeast Coast. The margins in commercial banking are fairly tight. Commerce paid low interest rates, but still, how was it able to afford the generous service and buckets of free pens? It turns out that the bank had on its balance sheet an unusually high number of mortgage-backed securities. The secret behind the WOW was M.B.S. The pens were, in a way, a precipitate of the shadow banking system, a by-product of securitization. Finding one was a little like stumbling on an empty crack vial in a public park. In 2007, after regulators took issue with business that the bank was doing with entities controlled by Hill's family, Hill was forced to resign, and Commerce was sold to TD Bank Financial Group. Commerce is gone. You may still come across a pen now and again.


Incredibly, Paumgarten fails to mention the fact that Vernon Hill owns a dog named Sir Duffy, which is hilarious, but hey, that's what we're here for.

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