ALMs

Welcome to my “daily comment.” The ground rules Ceres and I have agreed to are simple. I can write whatever I want, ranging from a sentence to an epic, and nothing is off limits. I can even say things like, “Don’t trade stocks yourself — for most people, it’s smarter to invest through no-load mutual funds.” Which it is.

Yesterday I did my ode to Automated Teller Machines — old friends to most of us by now. Today, I want to tell you what I’ve learned about Automated Loan Machines, which are just beginning to be deployed. You’re likely to be hearing a lot more about them in the next year, and may even be sidling up to one at your bank or car dealership or supermarket.

Instead of having to wait in line to see a bank officer and then sit there like a child, hat in hand, baring your innermost secrets — as if he’s so perfect — and then waiting a day or two to hear whether you qualified . . . and certainly not wanting to go through all this again with some different bank, if your loan was approved, so you pretty much accept whatever terms you’re offered . . . and feeling embarrassed if your loan was turned down, and having to wonder whether it was because of your skin color or the way you dressed or because the guy just didn’t trust you . . . with an ALM the whole thing is magnificently impersonal — and takes just 10 minutes!

You go up to the machine, just as you would an ATM. You touch the screen to answer a lot of questions. While you do, it’s checking you out with credit-bureau computers and probably getting your SAT scores, for all I know. By the time you’ve answered everything, and reviewed the possible loan options — all this within about 10 minutes — it is ready either to reject you (which it does most of the time, so don’t feel bad), or else print out a loan agreement and a check, then and there, with your picture on it, no less. (The ALM has a built-in camera.)

This makes applying for a loan faster, less humiliating, and a lot cheaper for the banks.

The two downsides:

First, privacy. Having given the machine all this information, you may wonder who else might gain access to it. But that could be true of handwritten applications as well.

Second, even more debt. By making borrowing easier — indeed, fun for those of us who like gadgets and whiz-bang technology, let alone the self-affirmation of being able to punch in some keys and get $10,000 just on the strength of our records — ALMs will tilt society even a little more toward borrowing. Not a big tilt, probably. But to the extent the banks can get you ratcheted up with even more debt, so long as it’s debt you can pay off, they’re thrilled. That’s good for them; not necessarily good for you or the country.

Still, that’s just quibbling. Automatic Loan Machines are the future, just as Automatic Teller Machines were the future 20 years ago. (They’re already in place in several hundred locations.) Let’s just hope they don’t get used quite as much.

And no, the company that makes them is not yet public, so don’t even think about trying to get in on the ground floor.

Tomorrow: Potpourri