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Changing Banks in the Ides of August

By now, you too may have concluded that Wells Fargo—or another unscrupulous megabank— should not be left alone with your money. Wells Fargo’s latest scandal involves some 570,000 customers with car loans. The poor souls were saddled with insurance that they neither needed nor in some cases even knew about. The extra costs meant borrowers fell behind in their payments and in some 20,000 cases, their cars were repossessed. Yes, lawsuits are underway, damages will be paid, and Wells Fargo shares are down. But have you checked your own megabank’s sales practices, its stakes in oil and gas versus renewable energy, its board members’ and CEO salaries? Try it.

So you have decided, reluctantly, that enough is enough? You agree that controlling the use of our money is one of the few positive actions we can take in this deranged world?

The doldrums of August are not a bad time to act, or at least to contemplate the prospect. And here are a few suggestions for making the break, from my own experience and of course from the internet.

1– Locate a new bank or credit union, one that does not invest your money in fossil fuels or engage in sleazy, not to mention criminal business practices, but does offer the basic banking services you need.
You can get information on ethical, community-oriented U.S. banks and credit unions here: https//www.greenamerica.org/break-up-with-your-mega-bank
Ethics aside, U.S. banks’ financial soundness can be checked at http://www.bankrate.com/rates/safe-sound/bank-ratings-search.as
In California, we can recommend Beneficial State Bank and Mechanics Bank.

2–Moving to a smaller bank or credit union may require some sacrifices.There may not be a branch in your neighborhood. If there is, there may not be a bright-eyed, sharply-dressed young person to greet you at the entrance and help you to find your way, somehow, to a teller or the ATM.
With minimal overhead, smaller banks and credit unions can often offer lower fees and higher interest rates for savings. And if you decide to join a credit union, you will also become a voting member, with shares, not a customer.
Every bank, regardless of size, is insured through FDIC (Federal Deposit Insurance Corporation.) Credit unions have the same backing, ($250,000) through the NCUA (National Credit Union Association).

3–Open a new account in the institution you have chosen, with a deposit well above your new bank’s minimum, to avoid service charges.

4–Cease activity involving your old mega-bank. Stop writing checks; don’t use your debit card. Use cash and checks from your new account.

5– Re-setting all your automatic payments is really a drag, but it’s well worth the long-term peace of mind. Figure out which ones were set up through the company you’re paying, and which were set up through your old bank’s Bill Pay system. Make a list of all payments that are automatically debited from your account–utilities, mortgage, credit card payments, monthly donations.
Be sure to set up the proper online payments through your new bank, and change the account information for payments automatically debited by companies. Last, but not least, change your banking information in any other online payment systems you have set up, from Paypal to newspaper subscriptions.

6–Reroute your direct deposits, from paychecks, pensions, and Social Security. This is surprisingly simple and swifter than might be expected. You will need to have ready your new bank account’s routing number (you know, on the bottom left side of a check) and your account number (just to the right of the routing number.)
Your employer should have an easy form you can fill out to change your direct deposit information. This usually can be done by the next pay cycle, but make sure to ask how long it will take to process. For Social Security changes, go to https://www.ssa.gov/deposit where, if you are already receiving benefits, you can open a Social Security account and start or change Direct Deposit online.

7–Take one last look to make sure everything in your old bank account has cleared. If you have no outstanding payments or credits, make a trip to the bank and close your account. Call the bank ahead of time to set up a meeting with a banker. Explain why you are leaving his/her bank, and, for maximum impact, bring a letter that can be passed up to higher management.

8–Transfer remaining funds from your old checking account into your new account. You can do this electronically or with a cashier’s check. We did it with personal checks, which is easier and cheaper, but not as immediate. Once the transfer clears your new account, close the old one. Get written confirmation that the account has been closed.

*** Once you’ve left your greedy megabank, do consider replacing your credit card, issued by some other big bank such as Citi, Bank of America–or Wells Fargo. With each charge you are helping finance destructive pipelines, fracking, tar sands, predatory lending, fraudulent foreclosure practices, and famously outrageous CEO bonuses. Why not instead support investment in a clean environment, local and green businesses, fair housing loans, and more, by using a green credit card http://www.greenhttps://america.org/take-charge-your-card.

They breathe profits; they eat the interest on money. If they don’t get it they die… It is a sad thing, but it is so. It is just so.”

― John Steinbeck, The Grapes of Wrath

Lions, zebras, attack stagecoach

“Elizabeth Warren was not nearly as polite as I was…”

In February I posted an open letter to Timothy Sloan, the avowedly reformist CEO at Wells Fargo, regarding his company’s regrettable sales practices and its retrograde investments in fossil fuels, and our plan to divest ourselves of ties with his bank.

In April, Mr. Sloan himself published an open letter, listing the many ways in which Wells Fargo had been “ acting to regain its customers’ trust” after last year’s nasty scandals. No, of course he didn’t mention my letter, or many others he must have received.  ( Nor did he mention his good works with the Boy Scouts of America, who have had their own image difficulties in recent years.)

Bouy Scouts of America 9th Annual Business Leaders' Breakfast

Center, Timothy J. Sloan, Greater Los Angeles’s Boy Scout Leader of the Year

My letter had circulated in the social media, while Mr. Sloan’s was a full-page ad in national newspapers.  At the time, Mr. Sloan and the head of the Wells Fargo board purchased a total of $5 million of their company’s stock in a handsome display of good faith.

Meanwhile, lacking this good faith, my husband and I began laboriously to transfer our accounts out of Wells Fargo to more socially responsible banks.  At least a few of my readers and friends said they were doing the same.

When the Wells Fargo fake- accounts scandal first erupted in 2016, it had mattered less to us than the bank’s short-sighted investments in oil pipelines and other destructive fossil fuel projects.

Later, in October 2016, the New York Times reported at some length how employees at various Wells Fargo branches had preyed upon the most vulnerable individuals—immigrants with little English, older adults with failing memories, students opening their first accounts.

According to Kevin Pham, a former Wells Fargo employee in San Jose, California, “It was like lions hunting zebras.”  Pham mounted a Facebook campaign to hold Wells Fargo accountable.  He scored 50,000 “shares”.

While there had reportedly been no systematic targeting of vulnerable groups, demographic patterns sometimes emerged, such as Native Americans near Phoenix, looking for a safe place to stow their quarterly distribution checks and being set up with several unnecessary accounts per capita. There were other cases, and dispiriting details.

The bank has been trying to channel new lawsuits away from the two million fake-accounts scandal, by moving them into private arbitration. We just received such a mediation offer and ignored it, having already closed the gratuitous account and shredded the card. Other customers, however, are indeed pursuing litigation.

Meanwhile, the revelations continue.  Recently several plaintiffs have claimed that Wells Fargo changed the mortgage terms of bankrupt borrowers without their knowledge, much less their consent.  Generally the changes meant smaller payments over longer time periods—but with immense finance charges accruing to the bank.  As the New York Times reported in June, in its best imitation-tabloid style, “Wells Fargo, the $270 billion California- based lender, is driving its stagecoach further into the mud.”

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Also in June, Senator Elizabeth Warren sent a letter, this one to Federal Reserve Board chair Janet Yellen, demanding the removal of twelve Wells Fargo board members who had been present and passive during the years when bank employees were setting up the infamous two million fake accounts. While 5300 lower-level employees were fired as a result of the scandal, $185 million fines had been paid, and the CEO sacked, the original Wells Fargo board members had remained in place, drawing their annual average base salary of $187,000— with bonus and additional compensation, $319,000.  (An average Wells Fargo “personal banker” makes $37,000, a teller, $25,000. Why would one use “K” to signify all those thousands?)

Wells Fargo had been cited earlier for poor loan-servicing and foreclosure practices.  In 2012 it was among the five lenders agreeing to a $25 billion settlement with the federal government and 49 states, to rectify these “poor” practices.  In 2015 it settled $1.2 billion against claims of reckless lending under a Federal Housing Administration program.

Elizabeth Warren’s letter was not nearly as polite as mine, which may be why a super-pac has promised $10 million to “Deal Her Out” of re-election in 2018.

Meanwhile, it’s taken months to find what we hope are ethically (and fiscally) sound financial institutions, and to complete the tedious maneuvers of rerouting into new accounts our network of monthly payments to utilities, college funds, subscriptions, charities.  Rerouting our monthly deposits was the easy part.

Why are we doing this, when we could be using more time to address climate change or health care, or at least to haranguing our legislators?  Here’s the thing:  our votes and our protests often seem more self-righteous than effective because they originate in the bright blue state of California.  Our state is viewed quite negatively, it is clear, by the present Potus and his cronies—and with good reason, we hope.

Choosing not only where we spend our money, but where we keep it and who uses it, seems valuable leverage just now, in this thoroughly unhinged capitalist democracy.

To be continued, for better and for worse.

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An Open Letter to Timothy J. Sloan, CEO of Wells Fargo

Dear Mr. Sloan,
I don’t envy your new responsibilities as CEO of beleaguered Wells Fargo, from forging fraught decisions in the board room to facing protesters on your own front lawn.  No doubt you have been working hard to restore trust in your banking services.  In the interests of reshaping the WF image,I assume, our PMA account package has just been re-branded as “Portfolio,” and functions like Bill Pay have been been redesigned to improve our “online banking experience”.  Statements have been made about ending aggressive sales practices and withholding executive bonuses.
Yet there remains (for me) the more serious issue of Wells Fargo’s shortsighted investment strategies–most notably its massive financial support for retrograde fossil fuel projects like the Dakota Access Pipeline. It’s true that virtually every major investor holds petroleum stocks, so vastly profitable for so very long.  Still, the terrifying realities of climate change are speeding the move from coal, oil, and gas to renewable energy such as solar and wind.  Even pragmatic China is investing some $360 billions in renewable energy.
Seattle has divested its Wells Fargo stock.  Yale, Stanford, and the University of California are in various stages of divestment from fossil fuels. Some analysts have questioned the financial effectiveness of divestment as a tool.  Nonetheless, to keep one’s own funds from being used destructively is not only symbolic. The Dakota Access Pipeline will carry as much as 570,00 gallons of crude oil per day, and whether it is used only domestically as was originally claimed, or exported, as is now permitted, the resultant environmental pollution will be shared globally.
Several friends have asked me to report if and when I can locate a socially responsible bank. I think that I have. These quite prosperous citizens all bank with Wells Fargo and dread the mechanics of changing, as do I.
My husband and I have been with Wells Fargo even longer than you, Mr. Sloan. We transferred our accounts from Bank of America because of its investment in the apartheid government in South Africa. Protest divestment seems to have worked in that case.
Maybe it will work again, in the best interests of the planet.
I have grandchildren.  Do you?

Very sincerely,

Frances Smith Starn
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