OK, but Wells Fargo made $5 billion last year, and the activity they were fined for took place over many years, which leaves me to ask: after the fines, was this activity profitable or not? If it was profitable, do the fines actually dissuade future dishonesty?
Also, apparently Wells Fargo thinks that 27,000 people lost their cars over this. I bet none of those people will be made whole. Cars are really essential things: lose your car and you may be unable to take a child to school, unable to shop for food, or even unable to get to work. It's a pity that can't be undone.
The scams in themselves were not profitable. For the cross-selling, they made an extra 100 million or so over the course of many years, I don't recall the figures I read.
This billion dollar fine is like a small change for them. Warren Buffet has a lot of exposure to this company and he has been influencing to let them go for a long time. Go figure!
Well, the shareholders have suffered outsize to the amount of damage to the victims in dollar terms by orders of magnitude. Probably 100-150 billion, conservatively, wasn’t realized.
Wells didn’t get in trouble during the financial crisis because they stuck to conventional banking instead of investment banking, like their peers. Their reputation was unmatched.
Since the crisis WFC has floated low double digits percentage wise around their market cap, while all its peers have doubled and tripled in market cap. Wells holders have missed the boat they waited ten years for, and probably will live in purgatory for another 4 or 5 years because of this mess.
At this level of fine? Probably not. $1,000,000,000 is a substantial amount of cash but that would only be ~$37,000 a person if 100% of the fine went to the only the victims who lost their vehicles. Certainly enough to replace a lost car but far from adequate to cover damages from the effects of losing a vehicle and living with that repossession on your credit history.
And that doesn't even account for that 27,000 was only the number that suffered repossessions, not the number victimized by Wells Fargo.
They also have to pay back the people they snookered all their money plus interest. That's been stated in the articles that I've ready about the matter.
That will never happen because the lawmakers (i.e. wealthy elite, not democratically elected representatives) will never write laws to punish themselves. As long we live in a plutocracy we have zero hope of personal accountability for these sort of criminals.
They will however pass brutal laws sentencing poor people to 35 years to life for possession, an other disgusting shit like that, but that's another story.
Look at 2007 / 2008. Wall Street nearly crash the world economy to the ground. Ecnomists estimated it cause deaths into the thousands. (30k or 300k come to mind but I can't find the reference atm.) The Obama admin for all intents and purposes pardoned Wall Street. Yet Obama is hailed as a liberal, a hero, and one of our greatest ever.
For clarity: you saying the source of the laws are wealthy "elites" that aren't in office? Meaning sone lobbyists and their patrons? Otherwise I'm confused as one can both be a selfish rich person AND a (american-style or noy) democratically elected official.
"Knowing that some people are responsible for _knowingly_ enriching themselves off of messing with the global economy leading to the global economic crisis of 2009 and, for example, hundreds of thousands to millions of excess deaths, would you support: (A) jail time and criminal accountability for all involved; or (B) a $700,000,000,000 bailout for, among other things, their next yacht fund?
If the majority answer is (A) then there's your evidence we live in a plutocracy.
I don't necessarily disagree - I was trying to establish what position the above poster had. (i.e. where they saying the decisions are being made by the officials in office or by the lobbyists or by the people hiring the lobbyists). None of those options deny a plutocracy, they just describe the means.
- Their enablers. They're the next 14%. We really don't have an acknowledgement of the existence of this group. Examples would be politicians, the majoriry of the media, etc.
- Everyone else. In 1984 this was The Proles.
The 1% v 99% lens is __all wrong__. Any discussion via that lens is all but pointless. It puts the 14% on the wrong side of the line.
I really hate the use of "elites" in this context (you're using a common usage, I just don't like it).
To be elite is something to aspire to, to admire. To be truly elite includes concepts like benevolence, compassion, a larger awareness, and a long-term perspective. Being rich and/or educated alone isn't enough to be elite. Having power is definitely not part of being elite. A malevolent dictator is not an elite, they are just a powerful jerk.
This may be yelling to hold back the tide, but I think it's a bad idea to connect concepts of "good" with concepts of "asshole"
"In political and sociological theory, the elite (French élite, from Latin eligere) are a small group of powerful people who hold a disproportionate amount of wealth, privilege, political power, or skill in a society."
Call it whatever you want. The key takeaway is the awareness of The 14% is nonexistent. The 14% is not part of the so called 99%, the 14% is on the wrong side of divide.
In most countries jails are no good to prisoners. They are used to isolate people from society, not to help people to become a better person. And society is putting tones of money to support penitentiary system.
I believe for economical crimes people who took the decision should be fined a lot and banned from taking positions where they can do the same things again. No need to isolate them from society. At least for the first time. The same for other crimes where people do not hurt or threaten to hurt other people.
>The same for other crimes where people do not hurt or threaten to hurt other people.
Isn't that the thing though? Don't these bankers actually hurt more people, and hurt them worse, than any violent criminal could? So the person who hurts one family gets jail but the one that hurts thousands "doesn't get to work in the industry" anymore? That sounds like hogwash to me.
Has everyone just forgotten about the principle of equality under the law?
No, we've just gotten really good at interpreting our contract from the late 1700s really well.
The Lucas critique, or Campbell's law, both refer to the same concept. Any metric that becomes a target is no longer a sufficient metric.
The Constitution has been our metric for 250 years. I don't have a superior alternative, but it occurs to me that we've demanded it be a literal document, but when its our own skin on the line, we suddenly forget the inconvenient parts, and contort our minds to find absolution for something we are going to do anyways.
While I agree prisons are overused, making it a purely economical matter means it's just another investment. Benefit if you get away with it vs risk of getting caught. You have to be pretty draconian to make no one take that risk.
Banning people from an activity is also hard. They can just take a position where they advise others who will make such decisions, or other loopholes.
Jail time may not be the answer, and we clearly do a bad job of making these acts a financial risk (not to mention preventing recurrence), so your suggestion is undoubtedly an improvement over current day, but I don't think we can stop there. (Not that I have better ideas yet)
I would tend to agree with you because I feel the point isn't to ruin these people's lives, but to prevent them from causing further harm. Banning them from ever working in economics and seizing a large chunk of their wealth could be effective. That being said, it would also do society some good to actually punish these people and make an example out of them. The way they are just allowed to collect a bonus and keep going, at the moment, is terrible, it only reinforce's the impression on Wall Street that they are above the law (which they effectively are). Putting them in jail, like normal people, would serve to correct that.
Well, the bankers have always had their own threat of isolation as a hole card. If you don't like my money, I know a nice place in the Alps where they are isolationists to a fault, Switzerland.
Not that I agree with the idea, but it seems to work in practice.
ZTE apparently paid bonuses to 30+ people even though that were involved in some kind of violation. I bet Wells Fargo well also pay the CEO and the board very handsomely.
As it was in 2009 where me and you and every John Q Taxpayer contributed to the yacht and private jet fund for the Wall Street execs that stole pension money from millions of Americans, tripled unemployment, caused hundreds of thousands of excess deaths in the subsequent economic downturn...
Nothing pitchforks, molotovs, and sturdy rope wouldn't solve, but I guess we're just too comfortable to do anything but passively let them f*ck us in the butt.
"dissuade" does not mean "completely prevent forever in all circumstances"
Dissuade means something more like "reduce the chances of it happening".
If the OP had written "fines do not completely prevent forever the chances of a bad thing happening" everyone would have realised that was a nonsensical bar because even putting in jail doesn't do that.
Fines don’t seem to be preventing these cheats from ripping off consumers.
When a bank cheats its customers, they should be prohibited from providing those services for several years. Shut down their mortgage division and force them to sell it off. That is the only real penalty that has teeth.
Well, that's shooting own leg for government and people:
1. This is a business which generates taxes
2. This is a business which generates employment
3. This is a business which provides a service to people and current clients will suffer from shutdown.
If you can simply fine it hard enough to make them stop cheating like that in future, that should be more than enough. Simple fines to make cheats unprofitable should do the thing.
Also the rule "to shutdown" the entire division might be misused on the wrong way or to blackmail the business. Once you shut down the division, it's much harder to reverse it, than simply to return a fine.
I don't think this is about making them whole, it's just about fining them. I could be wrong, but I believe those victimized are still welcome to conduct a civil action against Wells Fargo.
They have to pay back the direct damages that they caused. They don't have to pay all of the damages resulting from the initial damage. If the money they took caused someone's car to be repossessed which caused them to lose their job, they don't have to pay for the lost income from the job.
Well, under this ruling they don't have to. But the victims didn't sign off on this, they are perfectly entitled to sue for whatever they think they deserve. (Though if they intend to do so they should absolutely not accept the money they try to give them as a result of this deal, as that will make their case that much harder to win)
I actually agree with you on this, Wells Fargo was doing this malpractice for years and the fine is really disproportionate. I mean even with the fine they still have a net income of over $4 billion.
The regulator needs to levy a more stringent penalty.
The puny penalty alludes to a bonhomie between the company and the regulators
I think it could be looked at another way also. What amount of potential earnings did they lose out on over the course of several years because the public are now aware they are potentially a dishonest (at least extremely careless) company to be avoided?
Fines are usually multiple times more than the value they cheated which seems to be the case here( ~100M$ ) - so it is fair in some sense. Just because they are still profitable doesn’t mean the fine was unfair. There might be other divisions were people worked honestly, let’s not paint everybody with a broad brush or sound despondent.
Cars are really essential things: lose your car and you may be unable to take a child to school, unable to shop for food, or even unable to get to work. It's a pity that can't be undone.
There's an app called Getaround (https://www.getaround.com/) which works really well for this, if you live in a big city.
Something has happened to big banks along the way, where they no longer actually provide banking services to their customers. When I walk into a Wells Fargo branch now and sit down with a "banker" to take care of my accounts, it consists of sitting next to them while they call 1-800-WELLSFARGO for me and talk to a call center. There simply is no service anymore. I walked into my local branch to open up an IRA last week before the tax deadline, and they literally couldn't even do it for me in time because the person on the phone said "we'll do our best effort, no guarantee." I walked up to the teller, asked for a cashier check for the full amount in my accounts, and opened up an account next door at a small local bank (First Republic). They were able to sit down with me and immediately pull up all the paperwork to create and fund an IRA account with no hassle at all right there, no phone call involved. It was like night and day.
These huge banks have simply become way too big, and it serves no one's interest but their own. They have zero incentive to provide actual customer service anymore. There needs to be a massive restructuring of our system to allow smaller banks to thrive and provide actual competition.
It's definitely an industry ripe for rebirth. For instance, I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc - and automatically have fractions of my deposits sent to those accounts so my budgeting and money management are handled without any effort on my part. I should have lightweight cards available for each of those accounts with online card management (request/terminate cards, track per-card spending); multiple cards per account so I can give my wife full use of "grocery" card, and alerts/notifications when I am spending too much in an account/not efficiently allocating the full amount/potentially using a card improperly; financial projections; and so on.
Most consumer products and customer services should be totally accessible through a web interface. All of this could be built on top of today's banking infrastructure as a mostly-frontend service but instead I'm forced to give my personal information to services like Mint (who can not and will not ever do what I actually need it to do) or trust Random Startup #347 with access to my bank account because banks are monoliths without technical capacity or consumer-oriented business practices. I imagine some upstart will eventually come along with a better solution but banking regulation (though absolutely necessary in many ways) will hinder growth of any challenger.
If anyone has any recommendations in the meantime, please let me know!
I deleted all my Mint stuff years ago just because of the security concerns. If you mention the security concerns on Hackernews, a Mint employee typically replies with a link to the wikipedia page on their patented security model. Still, I'd rather not type all my bank passwords into an Intuit website.
I like your concept of the multiple credit/card style budgeting. That makes a lot of sense. There are even some of those multicards out there with an e-ink display to select different cards. A bank could just issue one of those for a fee where you can select the account (and have a way to transfer money/items around if you select the wrong budget option).
Discover card has a section in your UI that tries to automatically break down your spending by store type (grocery, gas, etc.) but it does require you make all purchases with your Discover card, which a lot of people simply don't take.
There won't be any reward for you, or opportunity to say I told you so, after Mint reveals the shocking news they were hacked X number of years from now.
So, I'm giving it to you now. This is just smart and logical. You do not need technical proficiency to reason out the risks, or the daily "12yo exploits MOST-SECURIST-EVER IOT device in 20 minutes" articles.
With that said, without public support, and government laws, this is a losing battle.
Equifax had no authorization from you to collect and distribute your financial data, but they did it anyway, and your financial services sent them the information. And of course, not surprised, their criminal negligence, revealed EVERY SINGLE ACCOUNT to hackers. Let's be real, when the news for stupids spins the story in this manner:
Equifax data breach: The number of victims may be impossible to know
It means that the number was so great as to be unspinnable, so they went with another narrative, "Nobody knows" like dark matter, it's impossible, our scientists are trying but it's impossible....lol
> Discover card has a section in your UI that tries to automatically break down your spending by store type
All merchants that accept credit cards are placed in a category by the card companies, and every credit or debit card purchase therefore gets this category attached to it. Some places surfaces this information to you, in various ways. I have Chase, and they have a pretty shitty UI for this, but there's something there at least.
So it's not unique to Discover, and it's not them "guessing" or trying, it's based on fixed merchant categories.
It's even codified and part of ISO standards [1]. It's not a conspiracy, it's simply Discovercard putting a UI around data that's already being collected.
Hi djsumdog,
We understand you have concerns about security. Here at Mint, we use a very strong proprietary cryptographic security model which guarantees the safety of your personal information. We'd love to discuss this more with you so if you reach out to us at https://help.mint.com/ we would love to make sure you're happy with our services.
/KEB
Simple[1] is pretty close. Create "Goals" for any amount and time period, Save $X by Y Date . Simple automatically allocates money to your Goals from your Available Balance daily, every friday, or any other schedule. They show you a "Safe to Spend" balance which is your Available Balance minus your total Goals. You can associate a Goal with a spending category, say Groceries, and have all transactions marked Groceries come out of the Goal rather than your Safe to Spend balance.
I was a Simple customer from when they were still in beta, and I really loved them and talked a fair number of people into opening accounts with them over the years. Things went really downhill after a while.
Moving physical addresses was a total shitshow. It involved them snail-mailing two verification codes. One to the current address and one to the new address. And you had to be able to collect them both and get them entered within a certain time frame. (Really inconvenient when moving from Texas to NYC).
And then got a new banking partner and had to basically re-enroll everyone again with a time component. There was a web form that crashed immediately when I entered my information because they couldn't verify my address. I filed a ticket immediately, which they didn't follow up on. When I followed up on it, they said it was a known issue and they were working on it. No worries, I'll get an extension.
Eventually after me calling several times to ask about it, they just said that there were issues with some of their oldest accounts that just couldn't be resolved. So I could Re-enroll from scratch on their website. Which I did. And immediately got flagged as fraud because I already existed as a customer.
Eventually, they told me I would just have to find a different bank, and they were closing my account in 7 days, and they were going to keep any money left in the account at that point.
I was pretty livid.
And the goal system was theoretically really cool. I liked it a lot. But it never really worked correctly because the goal tag wouldn't stick from the Auth to the Settlement. So anything you had flagged when you made a purchase you had to re-flag when the purchase was no longer pending. It was a great idea but somehow they never figured out quite how to relate the Auths to the Settlements in their user database. Which is pretty scary.
Anyway, long story short, up until a couple years ago, I would've completely agreed about Simple being a good option. But I can't warn people away fast enough after all of the garbage I've had with them.
I had the exact same experience. Customer for years from the early public beta and watched their service get progressively worse post-acquisition. Eventually when they made the switch to BBVA my account was unable to be moved over despite months of back and forth with their support team. Eventually I switched to Schwab and I’ve been a happy customer ever since. It’s more work to manage, but I get so much more utility out of my money today.
I'm so happy to hear about your pain with the new banking partner. I thought I was the only one. That alone almost made me abandon them for good.
They just created a new goals system that "locks" off your money more than original goals. It seems like a good system, I need more experience to really say.
I still love Simple. But they made it readily apparent that I need to have funds in multiple banks to stay financially safe.
> Eventually, they told me I would just have to find a different bank, and they were closing my account in 7 days, and they were going to keep any money left in the account at that point.
Is that even legal? If so it sounds like an extraordinary loophole.
Doubt that's legal. I've had a few hundred bucks I lost track of in an ING account a decade ago that I was able to collect through CA collections. They can't just keep it. Smells super shady.
Sounds like a perfect storm of terrible experiences. I've used them for over a year without any issues. Hopefully I don't come across the same experience you had.
I liked the idea of simple, but didn't like the fact they couldn't send me checks to use. They'll mail them on my behalf but not send me an actual checkbook to hold onto for one off situations. I rarely use them, but sometimes contractors or landlords prefer this method or charge exorbitant fees to use a credit card.
Also if I come into a decent size amount of a cash payment, I can't walk into a bank to deposit it. Mailing in straight up cash seems super weird to me.
Workaround for both of these things are postal money orders. PMO's are basically checks in every way that matter, to the point where I've yet to find anyone who won't let me use one if they accept checks.
$1.95 per $1000 is pretty reasonable as far as fees go. If you want to deposit cash, you just get a money order for the amount, make it out to yourself, and use their photo check deposit. Funds available next business day.
If you need to pay someone, you buy a PMO with your debit card.
It's kind of an annoying requirement, but it beats the hell out of dealing with the banks in my area.
Huh, this is something I've never had to deal with or even knew existed. But yeah that makes sense. Appreciate the response for future reference I ever need to do this. I also agree that's not much of a fee and this would be a super rare scenario.
Hey I'm with you. I would love for those to go away and everything work off of digital transactions but some property managers (even in new complexes!) pay for some poor saas solutions that use a mix of dated tech and charge ridiculous fees that almost force people to not use it.
> I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc
Heck not even real "Accounts" (in the traditional banking sense) but just "funds" or "virtual accounts." I should be able to put $5/month into a "waste of money" fund, and then flag specific transactions against that balance when I use it, or as you said have a virtual credit card that goes straight out of my virtual "waste of money" fund.
It really is surprising how little innovation occurs in the banking space. I want more tools to track expenditures and money usage, silo-ing money virtually is an obvious way to do that, but yet nobody really offers it!
The innovation occurs, just outside of US for some reason.
When I was a student, in 2001, Poland, I had such functionality - I had separate sub-accounts, each one of them with a dedicated IBAN number, receiving funds.
My monthly allowance from the parents went to one account, my payments from clients (freelance programming) went to another one. From that I distributed the money into another account for holiday savings, and to a spending account with a dedicated and free wire transfer of $5/day for daily spending - the only one I attached a debit card to.
Once I got a browser in my phone, I think around 2004, in case of emergency (as in "standing in line at the store, and discovered I'm $2 short"), I could transfer the money between various accounts instantly.
Another cool thing was that since my father had an account in the same bank, I received all the wire transfers from him instantly. As in, I call him, ask him for extra $100 for something, he says "hold on", opens up bank account on his browser, sends the money, and I instantly get a text message that the funds are received, and I can politely say "thanks dad, I got it" before disconnecting :)
Using past tense, because that was all in 2001-2004. 16-18 years ago. Right now I think all the major banks offer that, so nobody considers it a big deal any more. Oh, and now we have instant inter-bank transfers, but they cost "a lot" - like a flat fee €1, so people usually send the regular free ones, which take <1 work day to get delivered (<3h if you send them between 7am and 5pm) - regardless of which bank you are using.
In the UK we actually have free instant inter-bank transfers. I send money using the app from one bank to the other bank and get the push notification from the second bank confirming I have recieved the money before the UI in the app from the first bank has even confirmed the money has sent.
Buy YNAB 4 (aka YNAB Classic). You'll have to import transactions manually, but I much prefer it to their subscription SaaS offering. I've used it for five years and love it.
You can import transactions manually into NYNAB (the new web version).
One problem I have with relying on OFX is that I have a nagging suspicion that it's not as 'official' as the statements. If there were a discrepancy between the two, I'd worry that I wouldn't be able to resolve it in my favor without having reviewed (and thus downloaded and reconciled against) the statements.
I was in your same boat until the SaaS offering started really figuring out how to do credit cards. Now, it's finally the better of the two options for me.
And Yodlee. Quovo. Tink. Finicity. A zillion others. This is where modern banking data is moving, for better or worse. I think it's better, but the world is still on it's first steps in this "more open" financial data linking space.
I work for a large bank and can offer a tip. When you find yourself in this situation -- please create an incident report by lodging a complaint with the branch manager or online . Tweet if you must : your goal is to make sure that an incident shows up in the CRM. Branch managers bonus is tied to customer satisfaction parameters. This will not make you situation more bearable but it will force the branch to be more responsive in the future.
The correct answer is to close your account and move to a bank that actually has an interest in providing customer service. (Credit unions are great.)
I have zero interest in some company's CRM, how they apportion money to employees, or anything else of that sort. If a company cannot get meaningful feedback about customers' reaction to their service, well, that sounds like they have a serious business problem to solve, and expecting me to fix it for free is, frankly, insulting and doomed to failure[1].
My rule in life with this sort of thing is simple. Don't do business with assholes.
[1] Get back to me when WF's CEO's bonus depends on customers going out of their way to provide feedback.
Throw me on the pile of people who don't love that tip. I'll go a step further and say, if that's the best remediation policy a large bank can offer, they're in a really bad spot.
As a consumer, I like my financial services to come in one of two flavors: Completely automated and self-service, or very personal.
Because I want to either never have to pick up the phone, or I want to know that, when I pick up the phone, ring straight through to a knowledgeable and empowered professional, instead of waiting on hold for 30m before getting some call center drone.
Any company where keeping a handle on customer service involves a signal having to filter through a CRM system and multiple layers of whatever-else-is-going-on-in-there is in neither of those camps: They aren't sufficiently automated and streamlined to give the hands-off experience, but they are also too bureaucratic to allow their customer-facing staff to offer a good hands-on experience.
And I just ain't got time for wallowing in some Goodhart's Law quagmire like that.
Even as someone who had abysmal interactions with mainstream banks when getting my mortgage, I don't think your response is charitable to the parent commentor, even if you don't think it's worth your time to provide feedback to a business entity, which is well within your rights.
If I as a dev for a large company see people online complaining about my product, I'd _probably_ tell them, in good faith, that if I had no direct touch to help, what channels they MIGHT be able to touch to have an impact, even if it's only post-factum.
What would you rather the business do? Have 0 receptivity to any channel of communication? Yeah, ticketing and support often sucks. But I see no reason to bite the hand that's trying to help you, both when they're going out of their way to try and give information that might move the needle, and when I'm hard pressed to give any more actionable advice. (at least for parallels within my space.)
I certainly would have liked to know I had _any_ recompense after BoA left me high and dry on some last minute mortgage detail and my agent went AWOL right before signing, even if it wasn't going to necessarily help my situation.
I've had a number of devs, when receiving feedback, tell me that I should instead seek out their bug tracker, register with their feedback system, open a support ticket, give detailed instructions about how to identify and fix my problem, and then wait for a decision about how I'm wrong.
Yes, but there are two issues here. One is getting your trouble resolved. Sadly that means doing some work you shouldn't have to at present. The other is sharing all those experiences so that we can garner momentum to change things.
I like credit unions, but I recently left one after they started adding various fees. CUs also often do not have the resources of a big bank. I have been stuck in Europe before waiting for the bank back home to open because they blocked my debit card even after I told them I was traveling. The contract 1800 number could not fix my issue.
IMO, the current best banking experience is Schwab. Hopefully they don’t make dumb changes and screw it up.
What I do, is just take my business somewhere else. Most people don’t review or give feedback, you just lose them and their word-of-mouth network forever. If it takes a bunch of extra steps to get your institution to do its job, I count myself lucky to have avoided deeper engagement to begin with. With any luck, enough people do this and your bank changes or dies.
I’m tired of businesses trying to get me to do their jobs for them.
The UK actually has a bunch of 'challenger banks' that are doing cool things like this.
I use Monzo which, a few month ago added support for 'Pots' - super lightweight mini bank accounts that let you partition up your money. Among others, I have a Holiday pot and a Savings pot. They even have this early stage feature where if you name a pot "Coin Jar" they'll automatically round up transactions to the nearest £ and transfer it to that pot.
Using something like Monzo is like night and day compared to the products from the big banks.
The budgeting part of what you're describing is basically YNAB. https://app.youneedabudget.com/
It's a set of virtual buckets for allocating what money you currently have. It's not free but it's great because when one bucket's empty, it forces you to choose where else that money is going to come from. Like, "OK you blew threw the beer money, dum dum. Do you want to steal from your vacation fund or the new computer fund." After using it, I would argue that the ideas of "budgeting" and "without any effort on my part" are not compatible. You have to make hard decisions with limited resources and a good budgeting system should automatically bring those hard decisions to your attention and not just let you see how you screwed up with a pretty graph a month later (cough, Mint).
Also, many people use it without auto-import, but then you obviously have to be rigorous about entering in transactions. Anyway, it's an option.
I'm a YNAB user in the UK, where auto-import isn't really practicable because banks refuse to guarantee you against fraud if you give our your online banking details to anyone else, including YNAB. That should change this year because they're being forced to allow customers to use that data: https://www.openbanking.org.uk/home/what-is-open-banking/ However, I've actually found it very useful to spend time manually entering my transactions because it's given me a much keener understanding of my finances. Having said that, I've got as much out of that as I'm going to now so I'm looking forward to being able to do auto-import.
I do auto-import in the US and it's pretty nice. I still manually enter in things at the end of the month (otherwise they might not clear for a few days and eat out of the next month's budget). But it does a good job of recognizing when it auto-imports a transaction you already entered manually so you don't get duplicates.
Open banking seems like some insane idea passed on the nod by well-off MP's who probably have no idea about how to make sure banks properly look after the average tommy Atkinson customer
What you describe are common features available to all customers of Danish banks. Free of charge in any decent bank. You get the “Dankort” (den card) for free. It’s a debit card that’s universally supported in all shops with zero surcharge. It’s trivial and a common service to share accounts with multiple cards in your family.
Have been doing this with savings and checking accounts at Ally Bank for over 8 years. Have stuff broken down into emergency fund, slush fund, home buying fund, monthly bills, regular checking, funny money, and some "business" labeled accounts for side projects. You can create an account in about a minute when logged in, though to remove an account you do have to call in, but they have no problem doing it. I have open and closed accounts several times a year when a project dries up or we change how doing finances.
It also doesn't hurt that they have good interest rates, no foreign expense costs, and don't charge for things like debit cards, checks, autodraft, bill pay, etc.
I do think they are USA only though. Not sure how it works for non US citizens.
A plug for Personal Capital for tracking multiple cards / investment accounts... No ads, just prompts to sign up for their managed investing service occasionally (can't speak to that, fee seems high...). But their free product is substantially more useful than Mint et al. Great web app, great iOS app, really good tracking of expenses and cash flow. Some small annoyances like not linking with Coinbase / Robinhood and not allowing batch editing or smart-editing of transaction categories, but they are small when you look at the larger picture of all they provide for free.
Or simply for death. Not my idea, I first thought it was a joke when they told me, but it makes perfect sense. I get exactly zero interest for my savings, not even to compensate inflation. It's stock options or bs funds.
Only useful service I get is cards and avoiding keeping cash in a physical safe. Credit comes from cards or specialized loan companies.
There are two services that do matter: mortgages and credit lines for companies. I can see how this kind of volume operations could be also be done by specialized companies so generalistic banks could disappear.
You don't even get to choose your mortgage company.
A few years ago a friend of mine bought a house and actually turned down a house who's sellers had a bank of America mortgage as he had bad experiences in the past. He went out of his way to choose not to deal with them, but to his suprise 30 days after he closed he got a letter in the mail telling him that his mortgage was sold to Bank of America!
As part of your disclosures, lenders that plan to sell your loan will usually be required to disclose this fact, so you can deal with a lender that keeps their loans in house. The last house I bought the company disclosed that they might sell the loan, but they remain the servicer on the loan, so I don't even know who owns it.
Since then I've bought 2 houses, and both mortgage companies I've worked with had that clause.
Is it actually possible to find someone who won't? Or is it just a false sense of choice like the ability to "choose an ISP that says they won't sell your information"?
Some credit unions may keep the mortgage in-house, but afaik it's mostly private banks working with HNWIs that will do so 100%. Those mortgages are often very large or non-standard (like 100% financing interest only or a combo mortgage/heloc).
Some small community banks maybe? Some banks keep at least a portion of their loans in house. In some cases they may still have that clause in case they decide to sell it later, even if they plan to keep it in house.
I have never purchased property in the US, but I keep reading horrible anecdote after horrible anecdote, so I have to ask:
As a buyer, why would I even care who the seller has their mortgage with? Why would that matter?
Where I'm from, the real estate agent deals with that shit. When you close the deal, the agent calls up the new bank or faxes them or whatever so that they open a mortgage for X amount for the piece of property for the buyer, and directs them to send Y to the old bank so that they close out the previous mortgage, and Z to the agent's account, who then takes their cut, and forwards the remainder to the seller.
It really shouldn't be relevant. Your title company will usually handle closing (apparently where you are form the agent does this? Here, the agent usually helps you so you don't have to deal with the title company, but the title company is responsible), and they will deal with the previous mortgage company. Usually you should have title insurance in case a problem does crop up (required for most lenders)- and your title company can deal with it. So the real nightmare is when your title company handling the transaction is a problem. (Usually the seller chooses the title company, but this can be negotiated between buyer and seller, and many sellers are more than happy to use the title company of your choice- if you pay for it).
Title company? Title insurance?!? A third-party for-profit company handles some aspect of the transfer of property, instead of, you know, government? And in case this third party fucks up, you need to pay for insurance?!?
You said the real estate agent handles it where you are from- are real estate agents government officials where you are? You don't have to have a title company, you could do it yourself, but a typical real estate transaction involves large amounts of money and multiple parties, so most people want someone else to handle it all. If you are borrowing money, you lender will probably insist on it.
This is how it works in Sweden, as far as I understand it:
Real estate agents have to be licensed, and part of their duties is of course to verify that the seller is who they say they are and that they own the thing they're trying to sell. When I sold an apartment, I had to show my ID to my agent so he could verify me.
The registry of who owns what pieces of land is managed by a government office, and government data is by legal default public, so checking if a seller actually owns a piece of land is trivial. You don't need to chase down a distributed sealed deed history thing thing, it's basically a single national database at this point.
So it's really simple to do, and the responsibility is on the seller's agent, who in turn has a strong incentive to not screw up, or they lose their license and their job.
When you go to your lender for a pre-approval on a mortgage, they want to know which piece of property you're buying, and they typically check that it's being sold by a licensed real estate agent, because if it is, then they can be assured that the seller is verified and actually can sell the property.
When you sign the purchase contract - which is typically one or two pages long - you sign one copy for the seller, one for the buyer, one for the agent, and one for the government office, and the agent helps you fill out the (short) form that goes with it so you can send it in and get the ownership legally transferred to you. That's it.
There's so little work involved with verifying ownership and transferring ownership, that it's just put on the shoulders of the real estate agents. The idea that you would need yet another party to handle this aspect is completely ludicrous in Sweden, it makes no sense.
Because now his friend is forced to be a customer of Bank of America unless he goes through a refinancing process. Even then, unless he's very careful, he could end up refinancing with a company who turns right back around and sells the mortgage back to Bank of America. The same thing happened to me. I've had two mortgages through other banks who then sold my mortgage to Wells Fargo forcing me to have to deal with them and I had absolutely no say in it.
Oh I'm sure, I didn't follow it all that closely but I remember it being resolved within a few weeks, but the headache was apparently enough for him to want to avoid sellers with BofA in the future.
1. In the US, becoming a Realator is 8 courses, and two years "experience". In California, up until a few years ago you didn't need any experience if you had a four year degree.
(The added mandatory experience requirement was not necessary. It just cut back on the number of Broker's Licenses issued. Making the best looking real estate cheerleader just more wealthy. Will explain in more detail below.)
2. In all honestly, the Realator should have been retired by now.
3. They basically just hold your hand while collecting 3 percent on the biggest purchase of your life. That's full commission. Supposedly, paying full commission gets you a better deal?
4. I believe the biggest assent any agent possesses is a great Ommission & Error Insurance policy.
5. Yea--I do have gripes about the whole industry.
6. But if you are a foreigner, a Realtor is indispensable. In this wonderful country, we allow anyone, to buy up our Land with a phone call. It irks me to no end. We have strict immigration laws, but allow rich people to buy our Land? As I step over homeless, and see huge empty houses; I just want to scream.
7. Just letting off steam. As to a good mortgage, they all supposedly have a "guy", but do your homework.
(The experience requirement was lobbied to limit the number of Broker's licenses out there. Their wasen't any evidence experience made any difference, but Gov. Brown fell for the ploy. Ironically, Governor Schwartznegger didn't cave into the lobby effort. He saw no problem in the industry, and making it difficult to obtain a Broker's licence as anti-commpetive. I stopped looking at party affiliation when he did what was ethical/moral. Arnold wasen't a bad politician. I didn't appreciate him at the time, but I do now.)
It's been almost exactly 2 years since I bought my condo, and I'm currently on my fourth mortgage company. Which is now Wells Fargo! I don't know why they keep selling my mortgage.
Banks don't do anything useful that cannot be provided by other means. They are completely useless. The only thing that banks do is to provide credit against things you already currently own, like mortgages and commercial loans. But these things could very easily be provided by an official agency. For example, if you don't pay your monthly mortgage you just lose the house and an official agency will deal with the sale of the property (maybe through third-party services). Same thing for commercial loans. There is no need to create a private, for-profit bureaucracy to handle this.
It doesn't need to be the public sector directly. What I mean is that banks are not using their own money to do what they do, so it does't make sense to let them charge interest. There could just be a set of regulated institutions that charge fixed fees (independent of the amount of the operation) to perform these tasks, which basically consist of converting one form of wealth (real state or business assets) into monthly obligations.
All the things you describe could result in an amazingly improved experience for customers, letting them better control their finance, and understand where their money goes.
Sadly, this is not how banks become rich. Banks become rich by letting their customers spend a lot of money they don't have, then charging them insane interest rates that will often result in them paying back multiple times what they originally owed.
Having moved to the US from a country where the idea of a credit card is close to inexistent (people take loans to buy a car or a house, or start a business - but certainly not to buy a TV), it took me a while to fully wrap my head around how insane the credit system was in the US, and how its only outcome can be very rich and powerful financial institutions leeching money from average citizens.
Yes, that's a serious problem. The changes I suggested are not sufficient to fix the problems in the banking system, they're just features I would like to see (and apparently are being worked on, according to other responses). Thinking further, a determined, well-designed, consumer-oriented bank could steal the "responsible spender" market share from the existing banking system and increase the fragility of the contemporary credit system. No clue what happens after that.
You can try capital one 360 account. It allows you to create virtual accounts for different categories. It doesn’t have all the features you desire, but is better than most other banks in this respect.
Capitol One has one of the largest advertising budgets at > $1.5B. Seems a bit insane to support an organization that is willing to send so much revenue out the door when a good chunk of it could be recaptured by its customers.
My friend is a recent employee of Capital One via the Paribus acquisition, and he has quoted his CTO as saying "We're not a bank, we're a technology company."
I don't bank with them so I can't comment on their offerings, but his insider perspective indicates that they're taking technology seriously (hence acquisitions like Paribus).
Hey, just playing devil's advocate here. Some banks come pretty close to what you're asking for. I go to a small, community bank in flyover country that uses Jack Henry as a SAAS for its online services. Most of the things you asked for are already being offered.
> I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc
You can open multiple checking accounts at most banks. I've made partitioned checking accounts like this before.
> automatically have fractions of my deposits sent to those accounts so my budgeting and money management are handled without any effort on my part.
Money transfers can be scheduled but they're usually by set amounts instead of fractions (e.g. add $100 on the first of the month). I use this myself.
> I should have lightweight cards available for each of those accounts with online card management (request/terminate cards, track per-card spending)
Should be able to open debit cards for each account but you'll probably need to be in person to request/terminate them. Maybe you could do it over the phone by authenticating yourself, not sure. I haven't heard of per-card tracking but at least you know what you spent on your card.
> multiple cards per account so I can give my wife full use of "grocery" card
You can tie multiple debit cards to the same account for a husband and wife. Try explaining what you're doing and a banker should set that up for you.
> alerts/notifications when I am spending too much in an account/not efficiently allocating the full amount/potentially using a card improperly
There are account alerts that can be set up for exactly this. I have it shoot me an email with the alert message when something gets triggered.
> financial projections
Account history can be downloaded in common formats like csv. There are already tools you could use to create the projection and do fancy data visualization things for yourself. You could scrape your account data periodically using your online banking credentials. Might be dangerous to automate though.
> For instance, I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc - and automatically have fractions of my deposits sent to those accounts so my budgeting and money management are handled without any effort on my part.
This part probably can reasonably be handled with a spreadsheet at home, so if you can't find a bank that supports it you can still get the benefits. Plus, that handles money that is not at your bank, too. For instance, many people prefer to use specialized firms for investments rather than their bank. For example, an index fund from Vanguard probably has lower fees than a fund using the same index from a bank.
> I should have lightweight cards available for each of those accounts with online card management (request/terminate cards, track per-card spending); multiple cards per account so I can give my wife full use of "grocery" card, and alerts/notifications when I am spending too much in an account/not efficiently allocating the full amount/potentially using a card improperly; financial projections; and so on.
I can't think of a good way to handle this at home without bank support, at least automatically. You might be able to do something using prepaid reloadable debit cards. E.g., you give your wife a prepaid reloadable debit card specifically for groceries, and you handle loading it from the grocery virtual account.
I don't agree that managing a spreadsheet to keep track of money folders is reasonable, when we live in the modern day off technology. I too have longed for having custom bank accounts with the strict purpose of keeping certain money separate from other money. My savings account keeps money for several purposes, but anyone looking at it would just see a single sum.
I can actually do this with Simple. I have been disappointed with their velocity of new features, but they do that really well with their "goals", I really like the feature.
I was hopeful simple would have become this magic solution but they just released the concept of savings funds that transactions won't pull from after waiting seemingly 7 years for it. Along with their strange "no long term travel" policy, I'd wouldn't recommend their service for anybody outside out college.
I've been Simple customer for years- never heard of this "no long term travel" policy- can you elaborate?
Edit: I just looked, and they indeed state that they may have close your account if you are traveling for "a very long time" or moving out of the country... odd, I wonder what their definition of "a very long time" is?
I manage most of this with Ally.com. Each bill has its own savings account (most with automatic payment set up on the account side). My direct deposit is automatically transferred on a recurring basis into that pay period’s portion of each bill.
You can open multiple checking accounts (and we have multiples for those services that don’t draft from savings accounts), but we only have one debit card. All weekly expenses come from that account (which is funded every week by auto transfers).
We aren’t the type that care about “entertainment” vs “food.” Some weeks we eat out more; other weeks we play. If there’s cash in the spend account, buy what you want.
Savings and investments are automatically transferred as well. When we have a specific thing to save for, we open a new savings account and modify the transfer rules.
I disagree that all those questions (and probably most of the others he didn't list) need thorough discussion. A strong product head can define the vision that answers those very early on. Integrating with existing systems is definitely the hard part.
I mean, most of what you want is already available, the majority of banks allow you to open multiple checking accounts, between my husband and I we have four Navy Federal checking accounts - one for me, two for him (long story why), one joint account. You have to go through the "account opening" procedure, which I guess isn't "lightweight," but it's not difficult or anything. Some banks don't even make you type in your personal information if you are logged in.
Then you can get a debit card for each of account and you can set your paycheck to deposited into each account with your company's payroll. Automatic transfers would work too. I do some budgeting per checking account, the joint account is for household bills. Savings is automatically deposited into my investments account too - did that with payroll.
Problem is some banks want fees per account or want you to jump through hoops to get the fees waived, but it's possible to get a no fee per account bank.
Youd be MUCH better off doing this with separate credit cards rather than separate bank accounts though for many reasons. Credit cards are big on account alerts - not sure if bank accounts really do account alerts, haven't looked into it. Just get a "grocery" credit card and a "fun" credit card, "bills" credit card etc. I, personally, have seventeen (17) credit cards.
I have a few other checking accounts with different banks, most of which are opened only temporarily, I churn bank account bonuses.
I've been planning a side project with a lot of those features. That's exactly how I think about my budgeting and that's exactly how I would like to allocate my money. I'm really not aware of any way to do this currently, apart from a lot of manual work in a spreadsheet, which is annoying and still requires restraint in spending. Mint isn't even that helpful when it comes to budgeting because their alerts and categories are always inconsistent and they change categories that you've set for no apparent reason. Not to mention the ads.
Unfortunately, getting data from bank accounts is a pain due to bank security. The approach I was going to use just to get started was to export Mint's data as a csv, and then build an app around that until I read up on the bank transaction formats that would let you pull your transaction history. Not ideal, though.
Have you looked at plaid? I'm not sure what their rates are like, but if you're doing just a personal project, you might be able to get away with their developer evaluation (though that only lets you interface with big banks, not the small ones - the developer evaluation that is).
Hi there - full disclosure, I work at Plaid . Anyone can signup for API keys and access all the thousands of banks that we currently support on Plaid for free in our dev environment.
Once you want to add more than 100 accounts, we recommend reaching out to learn more about pricing at scale; it depends on what APIs are being used, how much data is being pulled, how often, etc. Feel free to shoot me an email directly if you have any questions! (charley@plaid.com)
Ah, I had used it couple of years ago. At that point, I could get to my bank account with it at a major bank, authentication with smaller credit unions was restricted until I graduated from the dev environment.
Hi Madeline - happy to share more info on pricing - we're working on simplifying pricing for early stage / bootstrapped products . Feel free to reach out directly to my email if you want to learn more (charley@plaid.com).
We'll occasionally flag accounts that have dormant API activity in our development tier, but as long as you're still using the API we're happy to cover the cost of the free account.
> export Mint's data as a csv, and then build an app around that
This is what I do. Mint doesn't have an API, but I just inject some javascript using the console that pulls the csv file and displays the data in a way that makes sense to me.
SmartyPig does some of that. You set savings goals which is a little different than just funding categories, but you might be able to make it work. Maybe they have an API and you could let them deal with the banks?
For sub-accounts, Capital One 360 is the easiest in terms of creating and removing accounts for specific purposes.
Most credit unions have this ability as well. I have accounts in two, and they use the same software platform that makes it easy to partition money in the way you describe. The only difference is that opening and closing sub accounts has only recently been available from the web interface.
Basically, there is no good reason to ever use a commercial bank, unless you have millions of dollars sitting around or handle a lot of cash and the convenience of a BoA or Wells Fargo has value to you for that purpose. Commercial banks will always be more expensive and less responsive.
In he UK there are actually a number of new startup banks (I believe precipitated by a change in regulation which eases the requirements for small banks).
My bank starling almost has this feature. It allows you to create "pots" which partition the money. However it is slightly more limited in that you only have one card and can only spend money that is not in a pot. You can however move money between pots instantly using the app (as well as many other useful features such as viewing/changing your PIN, and temporarily blocking/unblocking the card (useful if you lose it, but think you might find it again))
Monzo is doing pretty much what you describe and are a real bank (in the UK for now, I believe they have plans to launch in the US soon) - they don't have cards per subaccount, but they are api first, which is nice.
I agree it's a sector ripe for rebirth - it's an interesting time to be alive - we're living through a revolution comparable in scope to the industrial revolution, and industries like banking, which are primarily about storing and moving information, will be radically altered. Banking is one of the last to be touched.
"You Need A Budget" is excellent budgeting software that works like this. You can make separate mini accounts for different types of purchases. It imports transactions from nearly every bank and Venmo. It works on web and mobile. And the company sells subscriptions so you are the customer.
> If anyone has any recommendations in the meantime, please let me know!
I do this today with my regular bank account that's with a big bank. I can open subaccounts, get cards for them (or student cards for young family members), have automatic transfers setup for the day after my check deposits, etc. All accounts are listed on my account summary page.
This works fine for me. As a bonus, there aren't any extra fees for the privilege of giving my bank credentials to a third party.
If you move to New Zealand, several banks the ability to split paychecks into different accounts, with the option of having a bunch of cards if you wanted.
What I would personally like is an extension to the EFTPOS standard so that I can get receipts with my transaction history. It would be great if instead of just saying I spend $50 at the supermarket, it gave me itemised receipts which I could then export.
> If you move to New Zealand, several banks the ability to split paychecks into different accounts
This is available in the United States, too. I've had the option with a couple of different employers over the years, at least back into the 90's. But it seems to be dependent on the the company's accounting/payroll people/service.
I do almost exactly what you described with Charles Schwab.
I have multiple "full" accounts, but there's no maintenence fees or anything. Their online tools are great. You can open a new checking account with the click of a button.
As I understand it, you need a brokerage account to get this; it's called the "High Yield Investor checking and savings account". It's not intended for most people, though apparently they don't care if you get the brokerage account and don't use it. On the other hand, Schwab has effectively zero physical branches, and apparently don't accept most ways of depositing money to your account, which makes it awkward to deal with cash and checks that end up in your hands for whatever reason.
All accurate. It is definitely marketed at investors, but I've used it as my checking account (er, accounts) for years now.
Although there are a handful of branches where I live, I never physically go there. I handle all check deposits via their mobile app. I never receive cash for anything though. You are correct, it would probably be a bad choice for someone dealing with a lot of cash.
And as a sibling comment said, no ATM fees anywhere in the world, ever.
CapitolOne! You can open an accounts online, no fees and you get interest on your balance. I have more than 20 accounts with them for everything from saving for vacation to saving for unexpected pet expenses.
I had an account with exactly this functionality ~18 years ago (sic!) in Poland already. All three bank accounts I have in Poland right now offer that - and I think it's the standard in the mainstream ones.
I was about 20. Needed to get something notarized, someone mentioned that banks could do it. I googled and confirmed WF could do it for their customers so I went over to my nearest branch.
Asked the front desk if I could get something notarized. They said sure and referred me to a banker at a desk. I walked over and sat down and told him I was looking to get something notarized.
He said sure, but first can I ask if you've considered upgrading your bank account? I said I didn't think I was interested, but he decided it was worth a few minutes of my time to pull out a pamphlet and talk me through the benefits. I thought I was through it. But then he started asking me if I had considered opening an investment account. I told him that with my current earnings and burn rate it didn't make much sense. But he decided to walk me through the benefits. Then I thought surely, he must be ready to help me notarize my document. Nope. He wants to talk about - I don't remember - small business loans, life insurance? Something that made no sense to offer a 20 year old. Sat through that presentation. I'll make an aside - I was much less experienced with deflecting sales pitches at that age, today I'd have stopped it all much sooner.
But I digress. After 10-20 minutes of pitches for products I never expressed interest in, he finally gave up and asked me what I needed notarized. I honestly don't remember what it was, but he turned around and instantly told me that they weren't able to do that type of notarization. Despite wasting so much of my time, they didn't even have the courtesy to make sure they'd be able to help me out afterwards before launching into their pitch.
A few months later walked by a branch and on a whim decided it was a good time to close my account. Walked in, ask to close it, they said I had to wait, I said oh OK that's alright I'll just withdraw all of it. Good riddance.
> A few months later walked by a branch and on a whim decided it was a good time to close my account. Walked in, ask to close it, they said I had to wait, I said oh OK that's alright I'll just withdraw all of it. Good riddance.
Careful, if it's not actually closed they'll hit you with fees.
All banks, even the local ones, use something called Chex Systems, which works somewhat like Equifax for bank accounts. If you leave an account open with a $0 balance, and something hits it, and causes an overdraft, and accumulates fees, and then they close it later on for you with a negative balance for hundreds of dollars, then this gets reported to Chex and the next time you try to open an account with any other bank, they say, "Nope, we have a record here for you for account abuse."
These records stick around for about 7 years -- longer than many items on a credit report.
Can confirm. I had a negative ChexSystems report cause me all manner of grief after a credit union account I forgot about got closed out 23 cents in the negative.
Two dimes and three pennies. It cost them more than that in angry phone calls and reporting it in the first place.
In college, I had an account at Wells Fargo, and my parents would occasionally deposit money into it as a way of sending me money for free. One day, my mom tried to do this and got sucked into a 20 minute sales pitch to switch my parents' mortgage to WF. The teller finally took the cash, but it never actually appeared in my account. After a few hours, my mom went back to the bank, and they couldn't find any record of the transaction - but the teller remembered spending 20 minutes talking to my mom, so there were able to find the money, deposit it correctly, and solve the problem.
So, I mean, there are some good things to those pitches I guess. Wells Fargo is impressively awful.
I have a suspicion that they (and other banks) may employ some 'secret shopper' types. If they don't pester you with annoying stupid unrelated questions, they will get penalized or fired. Such is "retail" in the US.
One piece of it is actually regulation. When you're dealing with huge amounts of yellow tape and you have millions of customers, the overhead cost of providing services is absolutely sky high. Many of their clients don't even make them money; think of the Starbucks barista that has $1000 in checking and no savings. Sure they can turn some of that money around into interest, but the cost-per-customer of lawyers, compliance, auditing, etc is far higher.
Any of the banks that are actually offering decent interest rates on deposits are online banks, because it enables them to centralize and automate all of their operations in one place.
Credit Unions are similar. They usually serve a smaller community, which means they're centralized and have less overhead. They are also beholden to different less-strict laws.
I've heard this first-hand from the founder/CEO of a small local bank. Every time they write a loan they are forced to provide the customer with a 200-page "book" of all the compliance and regulation surrounding that loan. The client immediately throws it in the trash, every time. It hurts the bank, because they have to print that, audit it, have lawyers look it over, maintain it. It also hurts the client; these laws are meant to inform consumers, but in reality they irresponsibly only require banks to throw incomprehensible amounts of information at consumers. Like website Terms of Service, consumers never read it, they just trust what the bank teller tells them.
>Every time they write a loan they are forced to provide the customer with a 200-page "book" of all the compliance and regulation surrounding that loan.
This must vary by state; I recently took out a small loan from my local bank in Pennsylvania and the information I went home with came out to about 15 pages.
>When you're dealing with huge amounts of yellow tape and you have millions of customers
I thought the conventional wisdom was that onerous regulation actually favored huge businesses with "millions of customers" -- for example, the effort of having to "print that, audit it, have lawyers look it over, maintain it" is a fixed cost so the cost per customer is smaller for larger banks.
That is absolutely true. My meaning is that the big banks are the only banks that have survived all the regulation, and the only reason they can survive is because they're increasingly centralizing all of their operations and shitting on average customers who earn them essentially no money.
Unfortunately, the massive restructuring you're referring to would likely need to be in the form of deregulation. It's unfortunate because deregulating something is typically a non-discussion. Our banking regulations make almost no distinction between massive, "too big to fail" banks and small community banks. Like most regulation, it's the massive companies that can foot the bill for complying with regulation, creating barriers to entry into the market.
I didn't want to think you were right, but digging into this it seems to be the case. Dodd-Frank has apparently been a boon to big banks, and squashed competion [0].
"“Having a bank, it’s a sign of economic vitality,” he says. And it’s not just North Carolina. He notes the country has about 40 percent fewer banks today than when the Dodd-Frank Wall Street Reform Act, passed in response to the recession and implementing the most significant changes to financial regulations since the Great Depression, was signed in 2010.
Proponents of the measure said it would reduce the risk of another financial crisis by decreasing the concentration of resources in a handful of banks. Gwaltney says it’s done “the exact opposite.”
“The five or 10 largest banks in the country are larger than they were at the passage of Dodd-Frank,” he says."
The repeal of the Glass-Steagall legislation (Banking Act of 1933) in 1999 deregulated and allowed banks to act as investment, commercial, and retail at will. That deregulation doomed us to the financial crisis a decade later and the "too-big-to-fail" atrocity that ensued.
You can find lots of references from the time of the repeal saying "this is a bad idea because this act was designed to prevent banks screwing around in the way that caused the Great Depression, and the inevitable result of repealing it will be to cause a similar problem".
Then you can look at the CDO crisis less than ten years later and talk about correlation not being causation until you're blue in the face.
Here's another prediction: the destruction of the CFSB will lead to anti-consumer behavior at large banks.
The bailouts certainly would have been easier if retail and investment banking had been separate. With the current state the investment bankers can hold everyone hostage because they may also blow up regular bank accounts.
Because it is so difficult to write good regulations. It is [nearly?] impossible to predict all the consequences of your regulation ahead of time. After the regulation is written there are many more people who have an incentive to figure out how to twist it to their advantage, and they get as long as they need to dream it up. Then they get a as long as they need to try various forms in small areas that you don't notice until they get it "right" and then before you know it they have grown.
It doesn't help that the people who are best able to write the regulations are those who are in the industry: they also have incentive to get it wrong. Either you have people who don't understand the industry writing the regulations despite not being competent to do so, and thus not realizing at all what the loopholes are; or you get those who are inside to close the bad loop holes (the ones they know will be abused and they will get in trouble for) while opening up smaller loopholes that benefit slightly them at the expense of someone else not writing the regulations. Either way you lose, though insiders is slightly better. This is also why you see a "revolving door" between industry and regulators: that is the only way regulators can get the skills they need to write something that isn't completely awful.
>It is [nearly?] impossible to predict all the consequences of your regulation ahead of time.
Yes but why is the burden asymmetric? It is similarly impossible to predict the consequences of deregulation ahead of time yet proponents of deregulation are never held to the total unpredictability of the outcomes of their position.
I will partially counter that a much simpler class of regulations can cover more things in deregulation.
For example, if I just make fraud illegal, if you misrepresent what your evil I don't care what it is under deregulation I can get you. If you are honest about your evil it will be harder (but not impossible!) to sell it.
Deregulation also allows the "small guy" a better chance because to compete, and so with more choice the customer is likely to be more aware of choice.
Again, the above is not complete. There are big holes in this as well. Fundamentally there are always a subset of people who are willing to do evil to get ahead, if they can do their evil while being in the letter of the law they will. Society needs a way to deal with it, and nothing is perfect.
> It is similarly impossible to predict the consequences of deregulation ahead of time yet proponents of deregulation are never held to the total unpredictability of the outcomes of their position.
What's an example of this? The deregulation of airlines? The repeal of Glass-Steagall? I've read a lot of bad takes about the latter's supposed outcomes, but none of them claimed that the outcome was unpredictable.
>The repeal of Glass-Steagall? I've read a lot of bad takes about the latter's supposed outcomes, but none of them claimed that the outcome was unpredictable.
It depends on what you mean by 'outcome.' If by outcome you mean that with GLBA/Glass-Steagall repeal banks began investing in the products they had previously been barred from then sure that was predictable. If we mean second order effects like it's possible contribution to the financial crisis then I'd say that was definitely unpredictable considering economists still can't agree on whether GLBA played a role or not.
That deregulation already happened a month or two ago. But it's bullshit because the banks were awful before Dodd Frank too.
What Obama should have done during the crisis is nationalize the failing big banks instead of bailing them out and then broken them down into a hundred little banks and sold them off.
The Emergency Economic Stabilization Act was enacted October 3, 2008, a month and a day before the election and nearly four months before Obama was inaugurated as President. While both McCain and Obama voted in favor of the act, and issued a joint statement in favor of the action as Presidential candidates, that part of the crisis was over and done with before he took office.
I remember a thing on Frontline about the banking crisis where they described a meeting with Obama and the bankers where the bankers were pretty much ready for big concessions. Obama instead didn't do anything and let that opportunity go. He did the same when the Obamacare negotiations were going on. Instead of kicking some of his colleagues in the rear he was pretty weak and got weak results. I think he learned from these lessons and became much more assertive over time. It seems most presidents do better in their second term once they have learned the job.
George W. Bush presided over the crisis, despite what conservative media pundits would have you believe. It's amazing how this has been largely ret-conned for half the US population. We live in, uh, interesting times.
I suppose you just consider it collateral damage that big banks will act just as irresponsibly as before when they are deregulated? The whole premise that deregulation is the answer is always that the regulation isn't accomplishing anything useful, but if it really weren't accomplishing anything useful you would think the big banks themselves wouldn't be so eager to get rid of it.
I was commenting on the lack of competition. Deregulating with the aim of making the barriers to entry into the marketplace smaller. Not deregulation to allow big banks to get away with more...
Also, I would guess with more competition from smaller banks, megabanks might actually act more responsibly.
[EDIT] but you are kind of proving my point, so thanks! I said "deregulation" so your mind is already made up on the point.
On the contrary, deregulation (of banks and otherwise) is all the rage, and has been for some time (as another commentator noted, many 2008-era regulations are already being repealed). What I don't understand is how the deregulation is going to only improve things for small businesses, not allow large ones to be even more ruthlessly exploitative. Especially since the trend in many other industries (that aren't nearly as tightly regulated as banks) has been for large companies to absorb smaller ones.
Different banks have different levels of service. Often times a local, non-national branded, bank will have the services and service you might expect from your banker. Of course if they get to successful they get sucked into a bigger non-service oriented bank.
Wells Fargo seems to be particularly bad about things. I had a 'lifetime free checking account' with a local bank that ended up getting bought by Wells Fargo. About 3 years in to having my Checking there they tried to charge me a fee for it. I pointed out it was 'lifetime free' and they agreed to honor that when they bought the previous bank. They acquiesced and for the next year it was free. Then the fees started up again. Another call, another mea culpa, and quiet. Then the fees started up again. At that point I severed my banking relationship with them. (which I suppose is what they wanted)
Agreed. I changed over to a local credit union from Bank of America a few years back. Their online banking is a bit more awkward, but I can always talk with an informed person, which more than makes up for it.
My theory is that banks started out personal, but as they have consolidated have become ever more industrial in their scale and processes. Unfortunately, industrial-style human interaction is pretty awful.
I think the massive restructuring will come as banks split tasks into a) fully automating the boring things, and b) creating really good tools that empower their front-line workers (instead of treating them as dumb peripherals).
If our current major banks all went the way of Blockbuster during that process, I'll shed no tears. Few will, I imagine.
I only know horror stories from Wells Fargo. My only experience was wanting to break a $100 bill. I went up to the teller and asked for change, and they could not break the bill for a non-customer. Mind blown. I just walked next door to the grocery and bought a $1 thing of gum.
My favorite terrible story was a founder I know. His company just got funded and he got is first paycheck in a while, and he deposited it his Wells account. Well, he had a second account that was requiring payment, so they drained his primary account to level out the other account without telling him. He found out when his wife called him saying she was unable to buy groceries. Oh, and this was Christmas.
I had the same experience as you with Bank of America (come on, you're a bank. This degree of shitty service does not entice me into wanting to become a customer).
Even my credit union can be a pain in the ass. I had a check made out to my wife that needed to be deposited immediately. She signed it over to me and I took it to the CU. She wasn't on that account so they wouldn't deposit it without her being there. I went right outside and forced it through the ATM, which didn't make such stupid demands.
Your second story is a textbook example of why you should never open credit/loan accounts with a bank if you already have checking/savings there. You lose all leverage in negotiating debts, since they'll just take what they feel is owed when they get fed up with your delinquency. Wells Fargo did that to me, but I've seen that right reserved at more banks than just them.
HN meta-analysis: You will see mostly anecdotal evidence here that facilitates confirmation bias. Whatever you think of the subject at hand, threads like this mainly serve to let people vent more than offering actual insight.
(FWIW I have anecdotal evidence that both my local Wells Fargo and another big bank branch seemed to be stepping up service quality in response to the scandal. But again, that's not actually worth anything apart from demonstrating that anecdotes are insufficient.)
yay! i hope more people come to this kind of realization that small banks & credit unions are soooo much better--better service, better rates, better products, more forgiving about penalties and fees, and so much better at treating you like a real live human.
wells, chase, citi, BofA & the other big banks should be broken up into 100s of regional banks. lack of dignity and respect for customers follows from "too big to fail" (not to mention wasting trillions of our dollars without any punishment).
In the UK, there's this odd thing where some big high street banks have sub-brands that use the same core bank, but have their own customer service, online banking, etc. The Co-Operative has Smile, HSBC has First Direct. And these sub-brands generally have fantastic customer service!
Why? Why not just have great customer service for the main bank?
These sub-brands aren't, AFAIK, aimed at better-off customers who are worth more (there are examples of that too - Santander has Cater Allen), so it's not like there's some greater payoff to decent customer service.
They are phone and online only, without physical branches, so there are lower costs. Perhaps it's that?
besides the lower prices due to operational efficiency that you mention, it's probably about having a different marketing mix (the 4 Ps--product, price, placement and promotion) to attract a different cusotmer segment. many of their customers probably don't even know or care that the sub-brand is owned by a high street bank. the sub-brand might also be part of a strategy to funnel younger, new customers into the fold.
i'd say the main reason the main banks don't have good customer service is that they simply don't have to, and the actors therein have selfish aims. the fiefdoms of the large organization will typically divert resources to themselves (increase revenue, decrease operational expenses, and increase managerial compensation/headcount). consumer inertia allows this to happen (which is why i advocate moving away from big banks to promote competition and better service).
My impression was that most credit unions and small banks had pretty limited online banking, headaches with ATMs (not that I use them as much these days), etc. They are too small develop those services in-house, so I imagine they buy them as SaaS? Are they good enough now? I have Wells accounts I'd be happy to jettison...
yes, it's not the sexiest online banking, but you can do everything you need to do, including setting up automated bill pay. my credit union has an app that allows me to do mobile deposit as well, so i almost never need to go to a branch. the credit card i also have with them shows basic account info, but uses a connected (i.e., single sign-on), but separate, website for setting up autopay and other services.
for getting cash, most credit unions are part of the co-op network for atms: https://co-opcreditunions.org/locator/ so you have similar availability to a major bank (but admittedly a little more obscured).
You're right that traditionally credit unions and community banks have used antiquated consumer facing tech (online banking, mobile banking, loan applications, online account opening, etc) owned by 1 of 3 OG financial technology companies in the U.S.: Fiserv, FIS, and Jack Henry. They are all multi-billion dollar public companies that have formed primarily via acquisitions.
I started a company to challenge the incumbents after running a credit union as CTO.
Yeah. I already had an account with Charles Schwab (based in San Francisco), and I set up a roth IRA for this year in about 5 minutes by myself, online.
So it's not that financial institutions can't be good at this, it's that the big banks fundamentally don't care about customers who aren't wealthy or institutional in nature.
But there are definitely alternatives like credit unions, online banks, and brokerage firms with banking services. Not that everyone of these is good, but you have options, especially if you live in a city, like most people on HN probably do.
Quit big banks. Join a credit union, tell your friends about it. Encourage your employer to switch banks too, if you are in a position to do so.
It's a brokerage firm with some banking features. Brokerage firms understand that investors have options on where to take their money, whereas banks like Wells Fargo often seem to forget that.
If only more people did what you did, take your money to the local bank or credit union. If they don't have any more customers they can't pull these shenanigans.
I've been with a credit union (ESL) for 5 years now and they are amazing.
Chase seems to have moved their "hands on" banking to their "Private Bankers" (who you qualify for if you have some minimum amount of money or debt across your accounts).
Yes, I am a Chase Private Client and, to be honest, it's awesome. I call and a friendly human answers immediately.
But beyond that, I think Chase does a pretty good job overall with in-branch customer service. Their online/mobile banking is great. They're the best big bank by far IMO.
In-branch customer service has gotten super annoying in the last 3 or 4 years. I walk in to do something simple, there's like 8 bankers standing around in suits, doing nothing, and one of them rushes up to me like I just made their day and starts enthusiastically helping me with my simple thing... it's better than a long line and a disinterest in doing their job, but god damn it's creepy.
The illusion here is that it ever was different. A new bank, a small bank, a new office in your location with strong competition, that's the short term situations where you get real service. A well established bank won't even try to hide that they are just screwing you, because it costs too big a share of the money they screw out of you.
A few months (or maybe years?) ago here on HN I read a nice small article about that you always get screwed, not just with banks. Everywhere! The question is how, how much, and what for. Try to get screwed for a good reason, and if not possible at least for the smallest possible amount.
Not in the article but my experience so far: Try not get mad at the getting screwed part because it can't be avoided. And try not to imagine a fantasy world in which the screwing never happened before.
It boils down to this: "Banks are always trying to get customers to think of them as trusted agents, while reserving the right to act as rapacious counterparties."
I like Matt Levine because his "I was on the inside" voice is pragmatic and straightforward, and often makes me stop and say, "Huh."
Sounds bad, but you should see some Citibank branches -- they dont even make the call for you nor do you get a place to sit down -- I was trying to resolve an issue and the representative literally took me to an in-bank phone booth, dialed the number and handed the phone to me. Basically -- deal with call-center-hell while standing up. What's the point?
The good news is that this behavior is not universal, I looked around and there are banks with great customer service (in my case, i found ChaseManhattan to be superb, though it may be due to my "tier" and how much money i keep with them.)
On the topic of "tiers," I have found that with Citibank, when my credit card has a small balance, I get really good phone support. If my card has a medium balance (say, $2,000 to $9,000), I get shoved off to a third-world call center. But when my balance climbs over $20,000, I get the good service again.
Yes, my balance fluctuates wildly month-to-month. Travel.
Semi-related: If you have any entities (power company, cell phone provider, etc..) setup to directly pull their payments from your account, these can cause the account to re-open, and then overdraft. Be careful.
Same EXACT thing with Sprint, however at the oligopoly Sprint, you have little choice.
This appears to happen with any proto-monopolistic entity. The problem is, unlike government protected 'businesses' like cell phone and cable companies, there is no monopoly in the Banking sector.
So, WHY, why are people still drawn to the lowest common denominator big banks for their accounts? It makes not sense.
I'm leaving this month from my own big bank, after their "FREE" online banking as long as you don't bother us, e-checking account, went from free to $12 a month.
In principle this makes sense, but I've had pretty negative experiences dealing with community banks, where the tellers weren't any better, but there wasn't an 800 line for them to go to.
>These huge banks have simply become way too big, and it serves no one's interest but their own. They have zero incentive to provide actual customer service anymore. There needs to be a massive restructuring of our system to allow smaller banks to thrive and provide actual competition.
Thats not the plan though. Now that they have IMF'd almost the whole world, they have no one elses pie to take from... so they are turning inwards. In order to do this, they are murdering and executing [1](American Psycho reference, but lots of literal truth there too) their way to the top, but not just in banking... in all industries. (bayer-monsanto being a good example).
What we need is anti-trust/anti-monopoly laws to actually be enforced... oh wait... the same bankers that need regulating basically own congress and many more. I'll never forget looking up my podunk Texas congressmans public financing and wonder why so many NY banks were donating to him. Until we find a way to start fixing congress (the closest to the people of the 3 branches) this will just happen again and again.
Personally, after hunting terrorists for the government in my youth, I've come to the conclusion that bankers are the real terrorists. Financial terrorists.
Looking at that chart...unremarked is the 1991 $1.9 billion merger of Manufacturers Hanover with Chemical...it's more a commentary on the reality than the chart, a $1.9 billion bank merger doesn't make the cut as being important enough in the current post-Glass–Steagall "too big to fail" TARP banks...I interviewed for an IT role with the old Manny Hanny group within Chase Manhattan bank in the late 1990s...they were a bank buried within a larger bank, and soon to merge with JP Morgan and a host of other banks.
Yeah quite a lot of people don't understand the power of holding or just "financial services" companies in todays economy. They are quiet giants in most respects. For example, in the "147-corporations who rule the world paper"[1] I noticed number 13 was Franklin Resources Inc. Never heard of them, but apparently as a holding company they are one of the most powerful in the world... with many more like them.
Having worked in "big banks", I can say that there is a complete disconnect on the top. These people (on the top) sit on an ivory tower, think that they will bark orders and the slaves will obey. They become so big and slow-moving, that only by insane cost-cutting (at the expense of real customer service) keeps them viable, and keeps the shareholders happy.
The disconnect from the ground (and being surrounded by cronies and yes-men/women who keep them blind and stupid) causes the poor service.
Is it (even) worse in banking, or is this just something that happens to all companies above a certain size? I can totally see it being the case that a more heavily regulated industry suffers more, but that's pure conjecture.
I agree with your experience, same in Bank of America. I walked in to report fraud, a teller gets on the phone and call someone on the same number as I would from the back of my card.
Bank of America is a master at minimizing cost - they are introducing vATMs - virtual assistant ATM - its a regular ATM but with two-way camera so you talk with banker that is obviously located somewhere else. Just 2 months ago someone was helping me with perfect English and she said shes in Texas. Just few days ago, same location I connect and there is a guy in turban around his head, with broken English and clock on the wall I can see pointing 3am (it was around 2pm EST). So there you have it. I bet within 2 years they will complete transition and 99% of branches will have those vATMs at the cost of 70% savings in location, wages, etc.
I am slowly shifting to smaller bank though where people know me by name, I deal with same people who help me without using phone and sometimes even computer. So far BB&T and First Republic are very good choices.
When you go to any major metropolitan city in the United States, the downtown area will typically have several large skyscrapers. Take a look some time and note how many can be included in one of these 3 categories - banks, health "care", or financial services. Our priorities as a nation are fucked and the big banks are just a giant reminder to everyone. The fact that these companies are so huge and making so much money is ridiculous.
I've been banking with First Republic now for over a decade and the service has been nothing short of spectacular.
People I know are shocked when I tell them I enjoy going to the bank - I've never waited for more than 10 seconds to be helped, and they have done everything I asked within minutes.
And, not for nothing, they are constantly baking delicious chocolate chip cookies, too. More than once I have stopped at the bank for no reason just to get another cookie.
I once took out $25,000 from my WF account and asked for it in a cashiers check. I paid the $5 fee for the check (even though they had stated that it would be free) - then I took my money....
I came back ~1month later to re-deposit the check into SAME WF acct.
They stated that they had to put a hold on the check for 14 days until they could verify the funds. For a WF issued cashiers check. From the SAME act the funds came out of.
It is easy to forge a cashiers check. Even if it is real, it is possible to erase the name on it and put something else on. Or you could have a fake id that makes it seem like you are really the person who it was written to. Those are just the types of fraud that come to mind immediately, those who work in banks probably know of more.
Worked in a bank when I was younger (Not WF). Was fairly trivial for us to confirm that the cashiers check was actually issued by us. It shouldn't have been held longer than a day at most, particularly not for a client.
Leaving aside that it's your money and yours to do with as you wish...
Out of curiosity, if you care to disclose, what was your reasoning behind this?
If I'm a bank, I can see a couple of red flags with this (maybe some obscure kiting, or similar), "take five digit sum from account, in a check made out to self - then one month later deposit same uncashed check into originating account"... and "verifying the funds" is not verifying availability, but 'minimizing possibility of sketchiness'.
First Tech in the Pacific Northwest used to invent their own wheel, and it was great. Usable UI, 2FA; I had no complaints. Then they switched to what I assume is some pre-packaged SaaS. It's awful. Not even an attempt at MFA, just UID/PWD and off you go. UI sucks. Stuff doesn't work if you don't allow popups, but doesn't fail in such a way as to make root cause obvious ("here's an obscure error message with a string of hex numbers..."). I wish they'd go back to what they had.
There are a healthy assortment of fintech offerings for banking clustered in Austin and on the West Coast, maybe more.
Check out Q2 and Malauzai in Austin (there are are several, these are just the two I have evaluated) for a stack that is agnostic of the core system and provides almost all banking functions across channels.
This kind of thing isn't cheap though, and bank boards are notoriously conservative when it comes to innovation, especially for small banks.
One such is Jack Henry. I just interviewed with them (but didn't get the job, which is too bad as I really wanted to work there). They offer everything you need to start a bank or credit union, at a couple of different complexity levels.
There are definitely vendors for at least some of the backend and web services a starting bank will need. I've forgotten any of the names I've heard, though.
> There needs to be a massive restructuring of our system to allow smaller banks to thrive and provide actual competition.
Hmm... does there really need to be any restructuring though? It sounds like you "opened up an account next door at a small local bank" without any problem, so the choices are there, and your choices in banking really aren't that limited.
Your frustration with bigger banks seems to be related to the fact that as banks become bigger, their clientele also tends to be represented by more and more corporations and high net worth individuals. Those clients undoubtedly contribute a larger percentage to the bank's bottom line, so their focus naturally shifts to serving those types more than the average person with a personal checking account.
Just because McDonalds is the easy choice, that doesn't mean it's the only choice. McDonalds' existence (or that of the big banks) doesn't mean the system is broken - only that our collective preferences probably need to change.
I use Wells Fargo for one purpose: obtaining foreign currency. I keep my actual money in savings and checking accounts with Ally, and the minimum $300 in my Wells Fargo 0.01% APY (lol) savings account (so they don't charge me $5/month fees).
In exchange for this, if I'm traveling out of the country and don't want to rely solely on ATMs and credit cards, I first transfer some money into my WF account, and then I can go to the bank and pick up some, say, Canadian dollars, only paying the exchange rate (which last time I did this was equivalent to the rate on ATMs and credit cards). If it's not CAD/Euros/Pesos, I just call and they can order it for me.
When I was a teenager, my WF account was my main account, and every single time I went into the bank they tried to sign me up for a checking account. Wasn't surprised one bit when the scandal hit. (Fortunately, they never created any accounts for me.)
>I'm traveling out of the country and don't want to rely solely on ATMs and credit cards
Ummm... Why not? There's plenty of accounts that refund ATM fees. I don't want to have to stop at the bank on my way out and i especially don't want to carry around more than $60 in cash. Especially in a foreign country!
Agreed. I rely mostly on my credit union for financial matters and eschew large banks whenever possible. The service I get at my credit union and a local bank (that I won't name for obvious reasons) is light-years ahead of what I have received in the past from larger institutions.
The _only_ benefit of a large bank like Wells Fargo is that they're nearly everywhere, and I can deposit or withdraw money from any branch without paying a fee.
They do not offer any other service or product that comes close to competing with my local credit union (or even most small banks).
In the absence of a quality local bank or credit union, I can't speak highly enough about e-banking at places like Fidelity or Schwab. They're huge banks but you can open new accounts online in no time. You can use literally any ATM in the country and they'll pay whatever fees you are charged. No minimum balance, bill pay, basically every feature you should be able to expect from a bank these days.
The ONLY downside I've thought of, even though I haven't encountered it yet, is if you need to get a lot of cash you might have to jump through hoops. But you can get at least $200 from most ATMs so that's only a problem if you're going to pay cash for a car or something.
Wells Fargo and BofA have earned a negative reputation for "the big banks," but in my experience, Chase and Citi are perfectly fine ACH + ATM utilities. (YMMV if you aren't the kind of customer they want, i.e. playing close to $0 or making weird high-volume transfers).
Regardless of customer service concerns, the rates on other financial services are simply more favorable at specialist firms. American Express for rewards credit cards, Vanguard for investment, Marcus or Ally for cash savings, etc. A local bank or credit union with impeccable customer service around a full suite of services is still probably not worth the money you're leaving on the table.
You just compared Apples and Oranges. First Republic is typically for the higher-earning, higher net-worth individual, whereas Wells Fargo caters to a much broader set.
Not to say that Wells Fargo should not provide better service, but I just want to point out that these are two different types of banks.
I had a similar experience with Bank of America. The person who was supposed to help me was rude, untrained, and actually caused a lot of problems without addressing my original request (close my account); I later got help from a higher-up (actually trained) who did provide a modicum of service. I had a much better experience at a Credit Union.
First Republic really isn't any different than Wells Fargo. They talk a big game about personal service but it's the same bullshit. (Speaking from firsthand experience of moving from WF to FRB.) You'll talk to a different person every time you go in, their website isn't great (though the recent upgrade has helped), and their mortgage products require absurdly high down payments (20-30%) to be rate competitive with WF/Citi/Chase (as of 2017/Q4). They also have absurdly high minimums for many accounts (3-4k), though they do have nice features like fee-free out-of-network ATM use.
I really want to believe there's something better. But I think the real choice is between "local bank" -- shitty website, hard-to-use ATMs that require putting checks in envelopes, bad hours OR a big national bank, where you're a number, but the software is good, there are branches everywhere, they have a good mobile app/good ATMs, etc.
My personal philosophy has become, "I'm ok being a number because I'm pretty average personally, but I want a local bank for business banking." It's worked so far.
> I really want to believe there's something better. But I think the real choice is between "local bank" -- shitty website, hard-to-use ATMs that require putting checks in envelopes, bad hours OR a big national bank, where you're a number, but the software is good, there are branches everywhere, they have a good mobile app/good ATMs, etc.
My relatively large regional credit union has all the advantages you list for a big bank except branches everywhere when traveling, especially good ATMs and mobile app. And doesn't have the “your just a number” problem.
> You just compared Apples and Oranges. First Republic is typically for the higher-earning, higher net-worth individual, whereas Wells Fargo caters to a much broader set.
Okay, so pick any other bank which serves the entire community — whether it's a small credit union, a smaller regional bank, or a larger one which isn't BofA (I use TD Bank). The service will still be worlds better and they won't periodically require massive fraud prosecutions. It has nothing to do with the customers and everything to do with the corporate culture.
My point was only about the type of service you can expect at a bank of this type. Therefore, I gave another anecdote (my experience at a comparable bank, and another at a smaller/different type of bank).
I agree that the culture at Wells Fargo appears to have been one of rapacious greed. What I do not understand is how the previous CEO and his underling (the woman who retired) were not hauled before a judge on a range of criminal charges. Maybe CFPB does not have prosecuting power, but surely they can refer to DoJ for prosecution?
In Sweden bank provide two forms of services. All digital services which is what they are strongly pushing for, and ATM machines where customers withdraws (with a max of $1500 per week) and store owners can deposits in a few special machines in the "large" cities. Practically no office deal with cash and the few remaining is purely for consultations.
Through all this digitization and cost savings the numbers of banks has gone down. From a infrastructure perspective it has never been as cheap and easy to start up a bank, and yet what we see is the opposite. Now why do we not see new competition in banking?
Probably because the massive amount of regulations that have been added in the last century means starting with nothing is a massive undertaking if you aim at providing a full service bank. Startups are popping up, but usually they only do one thing. And a limited set of that one service at that.
Is that a US thing? Here, all the customer-having banks have all their services available through the app, with very quick and helpful support through chat. I didn't even had to come to their office to open an account – they delivered the card together with the documents I had to sign. This industry has been radically transformed in the last few years, just as taxis. I thought it happened everywhere, especially in US.
How you described is how it works in the US too. I have opened up dozens of accounts at banks and it's always been that easy - never had to go to a branch or anything. Closing the account is usually very easy as well.
The reason I open and close so many accounts is churning the sign up bonuses.
I had very similar experience at one of the large banks, no one cared about helping me, everyone just directed me to go online on their website to call the 1-800 number. What's the point of Physical Banking Centers anymore. Not the mention the horrendous wait for the customer care to answer the phone when called.
Agreed. Scarily, a lot of consultants and industry watchers foresee the healthcare industry going through the same wave of consolidation that banks did in the 1980s and 1990s -- they even use it as a metaphor for what they think will happen. I think that's something to worry about
The cost of employing and training people who are able to do those tasks at each location might not be make up for the revenue they bring in.
Online systems let you weed out those who are going to cost you in terms of labor hours, so you can trim the 20% of customers who take up 80% of the resources.
I got an email recently from WF about the issue with them opening accounts in customer's names without them knowing. The email said something to the effect of contact them if I think an account was opened that I didn't authorize.
I have a feeling First Republic tends to care about consumer banking at this point because it's just not a big bank yet. But how much customer service do you need, anyway? I step foot in an actual bank maybe once a year, if that.
Agreed. The only reason I have an account with a large bank (BofA) is for safe deposit box. Otherwise I use a local bank (Cambridge Savings Bank, MA) and have been very happy with their services.
I mean I don’t think they care about consumer banking. They care about banking with businesses and institutions. The personal checking accounts are basically marketing toward that end.
I gave up on Wells Fargo over 15 years ago and have never regretted it for a moment. Small credit unions are just fine. I'll never again use a big bank.
It seems like whenever you go to a bank, it's simply a time for them to try to sell you on credit lines and new accounts. Everything is handled in big offices and super dysfunctional.
yes I walked into a branch the other day to open a business account.
The staff sat me in a room and tele-conferenced me to some other branch to go through the process of opening an account with someone-off site.
I've interacted a lot with the larger banks and been flabbergasted at how they view the world.
Banks, big and small, regard the consumer operations of the bank as a cost center, which they should do as little as possible to maintain. In fact - I believe the only reason that they even have public facing consumer branches is largely to get access to capital as cheaply as possible. Every proposed improvement to the consumer experience is viewed in the light of "how is this going to make the bank more money." If a direct line from improving the customer experience to make more money can't be drawn, the bank won't do it.
Long gone are the days where banks provided a core function to the vast majority of society. They just exist to enrich themselves.
> In fact - I believe the only reason that they even have public facing consumer branches is largely to get access to capital as cheaply as possible
I would agree with this. Banks nowadays– maybe not local independent banks or credit unions– leverage your money to purchase investment vehicles on better credit for their higher-profile clientele, and also as liquid capital to dispense as needed.
> If a direct line from improving the customer experience to make more money can't be drawn, the bank won't do it.
Yep. I have an account at a sizable bank, and their mobile app has been broken the half dozen times I've used it, across as many months.
It's the 21st century and a bank cannot figure out how to finance a proper mobile management application.
The government should've instead created a "fine" where they receive something like half of Wells Fargo's profits for the next ten years or so. Then cap executive compensation for the duration. Then force every board member to resign and have a regulator on the board. All for the next decade. These one-and-done fines that are paid by shareholders instead of management, even large ones, do nothing...do something with lasting consequences if you want to punish, modify behavior, and put the fear of god into others considering cheating.
Your plan is to loop the government/regulators into the scam? What exactly is that incentivizing and how does that improve things for the average bank customer?
The executives responsible (principally Carrie Tolstedt and John Stumpf) not only did not go to jail, they ended up money ahead to the tune of 8-9 figures, even after clawbacks.
So if you're an executive, you know what to do...
And if you're a shareholder, is a billion dollar fine compared against 88.4 billion in 2017 revenue sufficient to sustain your motivation in an endless fight against the backscratching director and executive culture?
I don't have faith in Wells Fargo ownership or leadership to ensure ethical or even legal behavior in the absence of sufficient incentives. The market as currently set up encourages large scale misbehavior and destructive abuse by Wells Fargo of its customers. The stockholders are insulated by distance from the misery their company causes, and the executives outright make out like bandits, even when they get caught.
This is ultimately a problem which can only be solved by voters and their representatives inflicting meaningful punishment.
My parents opened an account for me with a bank when I was ~6 years old in 1988 that was swallowed up by Wells Fargo in the early naughts, which I maintained until about 6 years ago. At around the time I withdrew all my money and moved it to a local CU, I was going through financial hardships, and frequently would have less than a hundred dollars to my name. I never had any problems with them until then, when they would seem to hold up smaller debits as pending, even if a deposit was made which was also held as pending, until a larger debit was made and they were able to shift the order of transactions to maximize overdraft fees.
For example, $50 balance, $25 debit, $20 debit, $100 deposit, $80 debit resulting in a logical balance of $25 would be shifted to clear as a $50 balance, $80 debit (+$30 fee), $25 debit (+$30 fee), $20 debit (+$30 fee), $100 deposit leaving a balance of -$65 and a daily fee until I could find more cash to deposit and not use my debit card.
These transactions could happen over multiple business days, which made zero sense. Even now that I have a more stable job and a comfortable pillow of cash to fall back on, my CU seems to want to dictate where that money should go, instead of me shifting it around. Just this week, I went into a branch to withdraw some cash where the teller asked if I wanted to shift some savings into a money market account, which I agreed to, but said I didn't have much time that day to discuss it. Before I could go next door and get lunch, he had moved the money and zeroed out the account, which (despite being a saving account, is where my debit purchases get withdrawn from), managed to get me two overdraft fees when I bought lunch.
I'm seriously considering purchasing another mattress to store my money. In this day and age, there is no such thing as a bank. They are all financial institutions.
They should be in jail, along with the CEO. This isn't just white collar crime. This was blatant, premeditated, financial fraud. Directed from the very top to every single Wells Fargo office.
How is the public so stupid and uneducated, as to not be outraged?
All this does, is help to motivate the next generation of sociopaths. Zero consequences.
> This was blatant, premeditated, financial fraud. Directed from the very top to every single Wells Fargo office.
Oh no! No it wasn't! They never directed their employees to do anything illegal or unethical in hitting those unrealistic account targets, and the fact that hundreds (or more) tellers to do so the very same way is entirely coincidence and not the executives' fault! /s
I had high hopes for Bank Simple some time ago when they came out. Then they got acquired by a bigger bank. This industry is nearly impossible to disrupt. Just like the Oil companies back in the day, these banks are so big and powerful that it's impossible to innovate in the current market conditions.
Big Oil was broken up by anti trust legislation. It's possible this comes back around. Currently reading a biography on Brandeis who was one of the titans of anti-trust in the 30s and 40s. I'm hoping that kind of regulation comes back around.
How? The CFPB wasn't perfect, but like the ACA, many think that if legislation is not perfect, it should not be enacted. That's the entire basis of the Hastert rule, if the majority party isn't able to "secure" a majority of votes, then bills shouldn't be voted on.
Isn't that the point of voting?!? Why are our representatives pre-voting on bills to determine if they should even be argued, debated, amended and tried? I'm reminded of something one of my senators said last year about the Russia investigation (specifically the election interference, not "collusion"), in context of them not wanting to investigate because the facts were not known. THATS THE FKING POINT OF AN INVESTIGATION YOU DIPSH*T, TO FIND FACTS.
Everyone needs to vote this november. I don't care if you vote Republican, Democrat or any of the 3rd parties. Just vote. Get the old guys out. Disrupt their legacy. We (software developers) hate the Waterfall method. We like being Agile, whatever that means. Make our government operate the same way. Iterate in small, meaningful chunks.
Not sure how they calculate fines like these but it sure should work something like the following:
$100M + [(entire bank profit gained from illegal activity) * 7.0] + [(number of people screwed) * (average fees charged per person) * 2.0]
In addition, there should be a stipulation that the bank cannot (in present or future) pay the fee through employee layoffs or other cop-outs. Ideally, the government is able to require fine payments to come directly from executive compensation or by selling assets, etc.
My guess is it would come out to, let’s say, a hell of a lot more than this.
> Ideally, the government is able to require fine payments to come directly from executive compensation or by selling assets, etc.
Interestingly enough, DF allows the government to do this if the bank is considered "too big to fail", which is a classification they define precisely in the bill.
Yes. Dodd-Frank, the act that created the CFPB, mandates that the fines are deposited into what's called the Consumer Financial Civil Penalty Fund[1].
Money in that fund can be used for only two purposes by law:
1) Compensating victims of the wrongdoing
2) General consumer education & financial literacy programs
The key here is that #1 takes priority by law; #2 only kicks in if the victims are unknown or in a few other edge cases that would make compensation difficult. Victim compensation must always come first. If that drains the fund, #2 never happens[2].
I agree with the others in this thread who have serious problems with regulatory agencies that "self-fund" by using fines to keep the lights on. CFPB doesn't do this -- it cannot do this, even if it wanted to -- and that's what makes it different.
You might remember the debate in Congress over this bill. I was younger then, but still distinctly remember opponents of DF calling for precisely this kind of model during hearings. They were against CFPB receiving operations funding, and frankly I'm glad they didn't prevail. Nobody's issuing excess fines just to keep their jobs for the next fiscal year or levying themselves raises, and consumers get their money back in full. It just seems so reasonable, doesn't it?
>I agree with the others in this thread who have serious problems with regulatory agencies that "self-fund" by using fines to keep the lights on. CFPB doesn't do this
So one of the agencies most likely to go after major corporations don't do this. But the police that go after the little people can? Seems... rigged.
I completely agree that's its the wrong way to do it no matter if you're a regulatory or law enforcement agency. If I had my way, they would all operate like the CFPB.
And this is why I don't understand the opponents who want to tear it down. I understand why some might disagree with the bureau for philosophical reasons, but if we're going to have it, let's do it right.
I don't know about this fine, but the vast majority of bank fines are usually "consumer relief." Banks usually are in a position to where the actual financial impact of the fine is a very small fraction of the headline number.
"Goldman Sachs buys a home loan at 50 percent off. It then modifies the mortgage for the borrower to perhaps 60 percent of face value. The modification gets referred to the overseer of the mortgage settlement, proving that Goldman did lower the cost for the homeowner. And as homeowners begin to make modified payments, the bank can resell the now-performing loans, or just take in the revenue stream. If this works, Goldman makes at least a 10 percent profit on the deal, while satisfying the consumer relief terms of the settlement."[1]
The above glosses over the notion of it working by saying "if it works," but for the most part, it does.
it's a CFPD fine.. so it goes into their Civil Penalty Fund, and it's required to be used for victim compensation, and where that's not practical, the remaining funds are used for consumer education and financial literacy programs.
By law, those are the only things the CFPD can spend this money on.
Which is why these fines will continue. Everyone hates the banks so the regulators can just keep fining them for everything indefinitely, when they run out of ideas they find some new problems with the 2008 mortgages again.
This a good analysis. It sums everything up without the bullshit.
The only thing I would correct in your "Financial Corruption Process Map" is the step after #3:
.
3.5 "big fish" start buying up politicians and lobbying firms to legalize more and more "bad behavior"
4. Megabank acts legally to do something "reprehensible" since they lobbied to legalize it.
4.5 financial collapse. scandal...then the hand wringing begins by walking corpses in Washington.
I object to most of the roughly 50% of my income that is taken from me and can't say I've ever been called a freeloader... That's an interesting point of view you have there; "either don't be a US citizen or never complain about tax policy".
"Conscientious objection" to taxes means you wouldn't pay taxes, it doesn't mean you just complain about it. You can't do that and stay a US Citizen and not go to jail.
I guess I just don't care enough to ruin my life over it. It's a pretty interesting thing to think about, actually. To think that a bloody revolution was sparked over much less than what we put up with today... It's almost like Stockholm Syndrome.
That revolution was fought because there was no representation in the body that levied the taxes. We do have representation in the body that levies taxes now.
New York has nothing to do with the CFPD. The CFPD's civil penalty fund is legally mandated to use all money for two things only: victim compensation, and consumer education and financial literacy programs.
The GAO has audited the CFPD, and verified the funds are being spent in accordance with the law.
NY State is not the federal government. This is like asking what the US's military is like and having someone describe the Illinois National Guard.
Long story short, this all going into the Civil Penalty Fund:
In accordance with the Dodd-Frank Act and the Bureau's Civil Penalty Fund rule, the Fund can only be used for two purposes: to compensate eligible harmed consumers and, to the extent that victim payments are not practicable, to provide funding for consumer education and financial literacy programs.
The situation you outline above is illegal under Dodd-Frank, the act that created the bureau.
Those who designed the agency were worried about precisely this kind of perverse incentive structure & required that it distribute all penalties back to consumers.
It's not as much as the fine was expected to be worse, just that the situation is now resolved. WFC can put this behind them, and move on. AFAICR, this is the last of the scandals that have rocked the bank. As soon as the cap on their assets is lifted (likely before the end of the quarter), there's nothing left in the queue holding the price back. As such, the company will be able to take advantage of the higher interest rate environment we're moving into, and the stock (already undervalued compared to its peers) will benefit as a result.
Or probably the end of uncertainty about the investigation is itself a signal. (People who dropped it from their portfolios because they were risky now put it back.)
When a large fine is levied, there is only one question which actually matters: Did the company profit more than the fine from the illegal actions? If they did, then the fine will be written off as a 'cost of doing business' and nothing will change. It wouldn't make sense to do otherwise. When dealing with entities as large as Wells Fargo, they can often get away with anything as long as it is profitable enough. Since their personhood doesn't extend to the government actually being able to curtail their free movement or actions, and fines are the only way they can be censured, the fact that the public itself will balk at fines which are simply seen as "too large" can enable them to get away with anything.
This only hurt old Wells shareholders (stock is up nearly 2% today on this news). Meanwhile the Wells executives who clearly broke the law get off scot free.
Martin Shkreli instead get's the book thrown at him, assets seized, and sent to federal prison for much less.
Someone pointed out to me once that the parable of the boy who cried wolf is a story where not only did he lie, he also laughed in their faces and mocked them for believing him. He gets eaten in the end.
It's hard for me think of wellsfargo as an "evil" company, because every time I had to go into the branch, they have some of the nicest tellers and it's always a pleasant experience.
Nice people work for Walmart and Amazon who are both frequently cited as terrible employers. Terrible people also work at generally "good" companies as well.
Say it with me folks: Business aren't people. They're collections of people who run a a whole range of types.
I don't know how to say this without sounding condescending, but you basically just need to think harder or perhaps more critically. This is like saying you can't wrap your head around global warming because it's cold un your backyard or that you can't believe the earth is round because the ground in front of you seems so flat.
We must open our minds to larger concepts. This sort of small-mindedness is responsible for the worst part of the human condition.
My mother opened my first bank account at HSBC a long time ago. Then the recession happened and their regional branches got bought out by First Niagara, the shittiest and most customer-service-time-deaf corporation I ever had the displeasure of dealing with. (And then we learned through the news that HSBC actively assisted drug money laundering in South America, woohoo) Fortunately they were then bought out by KeyBank, although now I just use a local credit union.
Throughout all of that, my local tellers and bank staff remained. They are probably the friendliest and most helpful bank staff I ever encountered. It’s a shame they had to go through all of that. Probably more irate customers than I had to deal with them.
> ... the shittiest and most customer-service-time-deaf corporation ... Fortunately they were then bought out by KeyBank, although now I just use a local credit union.
The same KeyBank who hit my account with $380+ in overdraft fees _in a single day_ when they decided after four years of seeing the same paycheck being deposited twice a month that it was "subject to hold"?
I have been a WF customer for many years and, to be fair, they have always done right by me. It used to be that my main complaint was they would ask me to sign up for a credit card every time I walked into a branch, but they've cut way back on that.
I am, of course, disgusted by their fraudulent actions, and have several times considered closing my accounts in protest. But now I'm thinking that I probably couldn't find a bank anywhere under closer and more intense scrutiny. For now at least, it seems they're on their best behavior.
I felt sorry for the branch manager at by local branch when I closed my account. She's a great person who really cares about her customers, unlike her employer.
Critically, Well Fargo "submitted to an unprecedented order Friday that would give the Office of the Comptroller of the Currency the right to remove some of the lender’s executives or board members" [1]. TL; DR Senior management and even Board members can be fired by the OCC.
Until people start going to jail for their illegal activity rather than just paying out nominal fines I wouldn't expect their behavior to change. This is at least the 3rd major fine Wells Fargo has paid in the last few years.
If only people remembered that the second half of the expression about "a few bad apples" is that they "spoil the bunch."
A fine isn't going to hurt Wells, especially when it's about two weeks worth of profit.
If you want to teach a bank a lesson, you have to hit their business model. If after a fraud is uncovered regulators instituted restrictions to account openings instead of fines, you would see change. For example, if Wells wasn't allowed to open a new account - of any kind - for six months they would start to lose customers - and bankers - to institutions without restrictions. That would change the industry.
The CFPD is required to use all money from fines for victim compensation, and where that's not practical, they keep it to compensate future victims or they can spend it on consumer education and financial literacy programs.
They are not permitted to spend the money on anything else.
I'm commenting late on this and for the first time on HN ever, but the things that big banks can do and get away with are ridiculous. It simply doesn't matter what they do to their customers because they will always be bailed out and get their way. They don't have to care because it doesn't matter.
Remember: This isn't the Trump administration. This results from the regulation that was put in place and the enforcement that was started before, and that his administration is busy trying to deconstruct.
Setting the political aspect aside, there seems to be a broader consensus that this "bankster" behavior is bad and needs to be reined in.
And investment depends upon a certain degree of stability as well as reliable financial and legal systems.
How this behavior is handled -- or not -- has more of an impact, down to start-up ventures and their environments, than people sometimes stop to think about.
OK, but Wells Fargo made $5 billion last year, and the activity they were fined for took place over many years, which leaves me to ask: after the fines, was this activity profitable or not? If it was profitable, do the fines actually dissuade future dishonesty?
Also, apparently Wells Fargo thinks that 27,000 people lost their cars over this. I bet none of those people will be made whole. Cars are really essential things: lose your car and you may be unable to take a child to school, unable to shop for food, or even unable to get to work. It's a pity that can't be undone.
No, they made 22 billion. You're probably reading their quarterly figures.
source: https://www.nasdaq.com/symbol/wfc/financials?query=income-st...
The scams in themselves were not profitable. For the cross-selling, they made an extra 100 million or so over the course of many years, I don't recall the figures I read.
This billion dollar fine is like a small change for them. Warren Buffet has a lot of exposure to this company and he has been influencing to let them go for a long time. Go figure!
Well, the shareholders have suffered outsize to the amount of damage to the victims in dollar terms by orders of magnitude. Probably 100-150 billion, conservatively, wasn’t realized.
Wells didn’t get in trouble during the financial crisis because they stuck to conventional banking instead of investment banking, like their peers. Their reputation was unmatched.
Since the crisis WFC has floated low double digits percentage wise around their market cap, while all its peers have doubled and tripled in market cap. Wells holders have missed the boat they waited ten years for, and probably will live in purgatory for another 4 or 5 years because of this mess.
Won’t somebody please think of the shareholders?
>I bet none of those people will be made whole.
At this level of fine? Probably not. $1,000,000,000 is a substantial amount of cash but that would only be ~$37,000 a person if 100% of the fine went to the only the victims who lost their vehicles. Certainly enough to replace a lost car but far from adequate to cover damages from the effects of losing a vehicle and living with that repossession on your credit history.
And that doesn't even account for that 27,000 was only the number that suffered repossessions, not the number victimized by Wells Fargo.
They also have to pay back the people they snookered all their money plus interest. That's been stated in the articles that I've ready about the matter.
Will fines dissuade future dishonesty? Not likely. But jail time of the guilty decision makers would.
Steal a candy bar? Go to jail. Knowingly ruin someone's life? No problem. The shareholders pay for it.
That will never happen because the lawmakers (i.e. wealthy elite, not democratically elected representatives) will never write laws to punish themselves. As long we live in a plutocracy we have zero hope of personal accountability for these sort of criminals.
They will however pass brutal laws sentencing poor people to 35 years to life for possession, an other disgusting shit like that, but that's another story.
Yes. Agreed.
Look at 2007 / 2008. Wall Street nearly crash the world economy to the ground. Ecnomists estimated it cause deaths into the thousands. (30k or 300k come to mind but I can't find the reference atm.) The Obama admin for all intents and purposes pardoned Wall Street. Yet Obama is hailed as a liberal, a hero, and one of our greatest ever.
I have to believe Orwell is bewildered.
For clarity: you saying the source of the laws are wealthy "elites" that aren't in office? Meaning sone lobbyists and their patrons? Otherwise I'm confused as one can both be a selfish rich person AND a (american-style or noy) democratically elected official.
Ask any American this question:
"Knowing that some people are responsible for _knowingly_ enriching themselves off of messing with the global economy leading to the global economic crisis of 2009 and, for example, hundreds of thousands to millions of excess deaths, would you support: (A) jail time and criminal accountability for all involved; or (B) a $700,000,000,000 bailout for, among other things, their next yacht fund?
If the majority answer is (A) then there's your evidence we live in a plutocracy.
I don't necessarily disagree - I was trying to establish what position the above poster had. (i.e. where they saying the decisions are being made by the officials in office or by the lobbyists or by the people hiring the lobbyists). None of those options deny a plutocracy, they just describe the means.
There are three groups.
- The Elites. In current parlance The 1%.
- Their enablers. They're the next 14%. We really don't have an acknowledgement of the existence of this group. Examples would be politicians, the majoriry of the media, etc.
- Everyone else. In 1984 this was The Proles.
The 1% v 99% lens is __all wrong__. Any discussion via that lens is all but pointless. It puts the 14% on the wrong side of the line.
I really hate the use of "elites" in this context (you're using a common usage, I just don't like it).
To be elite is something to aspire to, to admire. To be truly elite includes concepts like benevolence, compassion, a larger awareness, and a long-term perspective. Being rich and/or educated alone isn't enough to be elite. Having power is definitely not part of being elite. A malevolent dictator is not an elite, they are just a powerful jerk.
This may be yelling to hold back the tide, but I think it's a bad idea to connect concepts of "good" with concepts of "asshole"
Per Wikipedia:
"In political and sociological theory, the elite (French élite, from Latin eligere) are a small group of powerful people who hold a disproportionate amount of wealth, privilege, political power, or skill in a society."
Call it whatever you want. The key takeaway is the awareness of The 14% is nonexistent. The 14% is not part of the so called 99%, the 14% is on the wrong side of divide.
That's essentially the same problem I've had with what you had a problem. I'm confused.
Why massively put people in jail for everything?
In most countries jails are no good to prisoners. They are used to isolate people from society, not to help people to become a better person. And society is putting tones of money to support penitentiary system.
I believe for economical crimes people who took the decision should be fined a lot and banned from taking positions where they can do the same things again. No need to isolate them from society. At least for the first time. The same for other crimes where people do not hurt or threaten to hurt other people.
>The same for other crimes where people do not hurt or threaten to hurt other people.
Isn't that the thing though? Don't these bankers actually hurt more people, and hurt them worse, than any violent criminal could? So the person who hurts one family gets jail but the one that hurts thousands "doesn't get to work in the industry" anymore? That sounds like hogwash to me.
Has everyone just forgotten about the principle of equality under the law?
No, we've just gotten really good at interpreting our contract from the late 1700s really well.
The Lucas critique, or Campbell's law, both refer to the same concept. Any metric that becomes a target is no longer a sufficient metric.
The Constitution has been our metric for 250 years. I don't have a superior alternative, but it occurs to me that we've demanded it be a literal document, but when its our own skin on the line, we suddenly forget the inconvenient parts, and contort our minds to find absolution for something we are going to do anyways.
While I agree prisons are overused, making it a purely economical matter means it's just another investment. Benefit if you get away with it vs risk of getting caught. You have to be pretty draconian to make no one take that risk.
Banning people from an activity is also hard. They can just take a position where they advise others who will make such decisions, or other loopholes.
Jail time may not be the answer, and we clearly do a bad job of making these acts a financial risk (not to mention preventing recurrence), so your suggestion is undoubtedly an improvement over current day, but I don't think we can stop there. (Not that I have better ideas yet)
I would tend to agree with you because I feel the point isn't to ruin these people's lives, but to prevent them from causing further harm. Banning them from ever working in economics and seizing a large chunk of their wealth could be effective. That being said, it would also do society some good to actually punish these people and make an example out of them. The way they are just allowed to collect a bonus and keep going, at the moment, is terrible, it only reinforce's the impression on Wall Street that they are above the law (which they effectively are). Putting them in jail, like normal people, would serve to correct that.
Well, the bankers have always had their own threat of isolation as a hole card. If you don't like my money, I know a nice place in the Alps where they are isolationists to a fault, Switzerland.
Not that I agree with the idea, but it seems to work in practice.
Massively? How many C Level execs are there?
Actually there is a lot of real world evidence that fines dissuade honesty.
Were the decision makers involved adequately punished? Will they ever do something like it again?
Fines dissuade from making exactly the same thing but that doesn't seem to prevent different kinds of scam.
ZTE apparently paid bonuses to 30+ people even though that were involved in some kind of violation. I bet Wells Fargo well also pay the CEO and the board very handsomely.
As it was in 2009 where me and you and every John Q Taxpayer contributed to the yacht and private jet fund for the Wall Street execs that stole pension money from millions of Americans, tripled unemployment, caused hundreds of thousands of excess deaths in the subsequent economic downturn...
Nothing pitchforks, molotovs, and sturdy rope wouldn't solve, but I guess we're just too comfortable to do anything but passively let them f*ck us in the butt.
"dissuade" does not mean "completely prevent forever in all circumstances"
Dissuade means something more like "reduce the chances of it happening".
If the OP had written "fines do not completely prevent forever the chances of a bad thing happening" everyone would have realised that was a nonsensical bar because even putting in jail doesn't do that.
The Wells Fargo fine indicates there are gaps in that evidence ;)
"dissuade" does not mean "completely prevent forever in all circumstances"
Dissuade means something more like "reduce the chances of it happening".
I think most people did not read your comment :-)
Fines don’t seem to be preventing these cheats from ripping off consumers.
When a bank cheats its customers, they should be prohibited from providing those services for several years. Shut down their mortgage division and force them to sell it off. That is the only real penalty that has teeth.
Well, that's shooting own leg for government and people: 1. This is a business which generates taxes 2. This is a business which generates employment 3. This is a business which provides a service to people and current clients will suffer from shutdown.
If you can simply fine it hard enough to make them stop cheating like that in future, that should be more than enough. Simple fines to make cheats unprofitable should do the thing.
Also the rule "to shutdown" the entire division might be misused on the wrong way or to blackmail the business. Once you shut down the division, it's much harder to reverse it, than simply to return a fine.
If it's sold off then the buyer is going to serve the costumers and pay taxes so no real loss for society.
The larger issue is it's a minimal impact on the company and the people who actually commit ed the crimes.
What about the people currently having a mortgage with the bank? You wouldn't want to hurt them.
fannie mae probably owns the mortgage anyway
Don’t banks generally bundle and sell mortgages anyway?
> I bet none of those people will be made whole
I don't think this is about making them whole, it's just about fining them. I could be wrong, but I believe those victimized are still welcome to conduct a civil action against Wells Fargo.
You're wrong, in addition to the fine paid to the Feds, they also have to pay back the people they lied to along with interest.
They have to pay back the direct damages that they caused. They don't have to pay all of the damages resulting from the initial damage. If the money they took caused someone's car to be repossessed which caused them to lose their job, they don't have to pay for the lost income from the job.
Well, under this ruling they don't have to. But the victims didn't sign off on this, they are perfectly entitled to sue for whatever they think they deserve. (Though if they intend to do so they should absolutely not accept the money they try to give them as a result of this deal, as that will make their case that much harder to win)
I actually agree with you on this, Wells Fargo was doing this malpractice for years and the fine is really disproportionate. I mean even with the fine they still have a net income of over $4 billion. The regulator needs to levy a more stringent penalty. The puny penalty alludes to a bonhomie between the company and the regulators
I think it could be looked at another way also. What amount of potential earnings did they lose out on over the course of several years because the public are now aware they are potentially a dishonest (at least extremely careless) company to be avoided?
I still don't fill my gas tank at BP stations...
HSBC only got $1.9bn for money laundering for terrorists and cartels, there's no intention anywhere in financial regulation to punish big banks.
Fines are usually multiple times more than the value they cheated which seems to be the case here( ~100M$ ) - so it is fair in some sense. Just because they are still profitable doesn’t mean the fine was unfair. There might be other divisions were people worked honestly, let’s not paint everybody with a broad brush or sound despondent.
Cars are really essential things: lose your car and you may be unable to take a child to school, unable to shop for food, or even unable to get to work. It's a pity that can't be undone.
There's an app called Getaround (https://www.getaround.com/) which works really well for this, if you live in a big city.
Something has happened to big banks along the way, where they no longer actually provide banking services to their customers. When I walk into a Wells Fargo branch now and sit down with a "banker" to take care of my accounts, it consists of sitting next to them while they call 1-800-WELLSFARGO for me and talk to a call center. There simply is no service anymore. I walked into my local branch to open up an IRA last week before the tax deadline, and they literally couldn't even do it for me in time because the person on the phone said "we'll do our best effort, no guarantee." I walked up to the teller, asked for a cashier check for the full amount in my accounts, and opened up an account next door at a small local bank (First Republic). They were able to sit down with me and immediately pull up all the paperwork to create and fund an IRA account with no hassle at all right there, no phone call involved. It was like night and day.
These huge banks have simply become way too big, and it serves no one's interest but their own. They have zero incentive to provide actual customer service anymore. There needs to be a massive restructuring of our system to allow smaller banks to thrive and provide actual competition.
It's definitely an industry ripe for rebirth. For instance, I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc - and automatically have fractions of my deposits sent to those accounts so my budgeting and money management are handled without any effort on my part. I should have lightweight cards available for each of those accounts with online card management (request/terminate cards, track per-card spending); multiple cards per account so I can give my wife full use of "grocery" card, and alerts/notifications when I am spending too much in an account/not efficiently allocating the full amount/potentially using a card improperly; financial projections; and so on.
Most consumer products and customer services should be totally accessible through a web interface. All of this could be built on top of today's banking infrastructure as a mostly-frontend service but instead I'm forced to give my personal information to services like Mint (who can not and will not ever do what I actually need it to do) or trust Random Startup #347 with access to my bank account because banks are monoliths without technical capacity or consumer-oriented business practices. I imagine some upstart will eventually come along with a better solution but banking regulation (though absolutely necessary in many ways) will hinder growth of any challenger.
If anyone has any recommendations in the meantime, please let me know!
I deleted all my Mint stuff years ago just because of the security concerns. If you mention the security concerns on Hackernews, a Mint employee typically replies with a link to the wikipedia page on their patented security model. Still, I'd rather not type all my bank passwords into an Intuit website.
I like your concept of the multiple credit/card style budgeting. That makes a lot of sense. There are even some of those multicards out there with an e-ink display to select different cards. A bank could just issue one of those for a fee where you can select the account (and have a way to transfer money/items around if you select the wrong budget option).
Discover card has a section in your UI that tries to automatically break down your spending by store type (grocery, gas, etc.) but it does require you make all purchases with your Discover card, which a lot of people simply don't take.
There won't be any reward for you, or opportunity to say I told you so, after Mint reveals the shocking news they were hacked X number of years from now.
So, I'm giving it to you now. This is just smart and logical. You do not need technical proficiency to reason out the risks, or the daily "12yo exploits MOST-SECURIST-EVER IOT device in 20 minutes" articles.
With that said, without public support, and government laws, this is a losing battle.
Equifax had no authorization from you to collect and distribute your financial data, but they did it anyway, and your financial services sent them the information. And of course, not surprised, their criminal negligence, revealed EVERY SINGLE ACCOUNT to hackers. Let's be real, when the news for stupids spins the story in this manner:
Equifax data breach: The number of victims may be impossible to know
https://www.usatoday.com/story/money/2017/09/17/equifax-data...
It means that the number was so great as to be unspinnable, so they went with another narrative, "Nobody knows" like dark matter, it's impossible, our scientists are trying but it's impossible....lol
> Equifax data breach: The number of victims may be impossible to know
Just assume all of them. Every last customer. Probably closest to the truth.
Not customers. You don't have to have done anything with the company, they collect data on anyone who has any credit history.
> Discover card has a section in your UI that tries to automatically break down your spending by store type
All merchants that accept credit cards are placed in a category by the card companies, and every credit or debit card purchase therefore gets this category attached to it. Some places surfaces this information to you, in various ways. I have Chase, and they have a pretty shitty UI for this, but there's something there at least.
So it's not unique to Discover, and it's not them "guessing" or trying, it's based on fixed merchant categories.
It's even codified and part of ISO standards [1]. It's not a conspiracy, it's simply Discovercard putting a UI around data that's already being collected.
[1] https://en.wikipedia.org/wiki/Merchant_category_code
> Some places surfaces this information to you, in various ways.
Citibank includes this code in the "SID" element in OFX generated by their "OFX Direct" service (i.e. https://www.accountonline.com/cards/svc/CitiOfxManager.do). I haven't seen it in the OFX from any other financial institution though. The codes are cataloged here: https://github.com/greggles/mcc-codes
Hi djsumdog, We understand you have concerns about security. Here at Mint, we use a very strong proprietary cryptographic security model which guarantees the safety of your personal information. We'd love to discuss this more with you so if you reach out to us at https://help.mint.com/ we would love to make sure you're happy with our services. /KEB
This has to be satire, right?
Green username. Freshly created account.
#deletemint
You forgot the wikipedia link!
Honestly, this is so tone deaf as to be a little amusing.
(though I'll admit the sibling's comment about satire is probably right)
The account was made today and has -4 karma from likely it's only ever post.
Simple[1] is pretty close. Create "Goals" for any amount and time period, Save $X by Y Date . Simple automatically allocates money to your Goals from your Available Balance daily, every friday, or any other schedule. They show you a "Safe to Spend" balance which is your Available Balance minus your total Goals. You can associate a Goal with a spending category, say Groceries, and have all transactions marked Groceries come out of the Goal rather than your Safe to Spend balance.
1) http://www.simple.com
I was a Simple customer from when they were still in beta, and I really loved them and talked a fair number of people into opening accounts with them over the years. Things went really downhill after a while.
Moving physical addresses was a total shitshow. It involved them snail-mailing two verification codes. One to the current address and one to the new address. And you had to be able to collect them both and get them entered within a certain time frame. (Really inconvenient when moving from Texas to NYC).
And then got a new banking partner and had to basically re-enroll everyone again with a time component. There was a web form that crashed immediately when I entered my information because they couldn't verify my address. I filed a ticket immediately, which they didn't follow up on. When I followed up on it, they said it was a known issue and they were working on it. No worries, I'll get an extension.
Eventually after me calling several times to ask about it, they just said that there were issues with some of their oldest accounts that just couldn't be resolved. So I could Re-enroll from scratch on their website. Which I did. And immediately got flagged as fraud because I already existed as a customer.
Eventually, they told me I would just have to find a different bank, and they were closing my account in 7 days, and they were going to keep any money left in the account at that point.
I was pretty livid.
And the goal system was theoretically really cool. I liked it a lot. But it never really worked correctly because the goal tag wouldn't stick from the Auth to the Settlement. So anything you had flagged when you made a purchase you had to re-flag when the purchase was no longer pending. It was a great idea but somehow they never figured out quite how to relate the Auths to the Settlements in their user database. Which is pretty scary.
Anyway, long story short, up until a couple years ago, I would've completely agreed about Simple being a good option. But I can't warn people away fast enough after all of the garbage I've had with them.
You didn't even mention when cards didn't work for three days for "maintenance"
Surprisingly I grinned and bared it until I decided the world wasn't ready for life without checks, unfortunately.
> the world wasn't ready
Your world. The US. There are plenty of countries where checks were phased out many decades ago. :-)
Well, that is where Simple operates.
I had the exact same experience. Customer for years from the early public beta and watched their service get progressively worse post-acquisition. Eventually when they made the switch to BBVA my account was unable to be moved over despite months of back and forth with their support team. Eventually I switched to Schwab and I’ve been a happy customer ever since. It’s more work to manage, but I get so much more utility out of my money today.
I'm so happy to hear about your pain with the new banking partner. I thought I was the only one. That alone almost made me abandon them for good.
They just created a new goals system that "locks" off your money more than original goals. It seems like a good system, I need more experience to really say.
I still love Simple. But they made it readily apparent that I need to have funds in multiple banks to stay financially safe.
> Eventually, they told me I would just have to find a different bank, and they were closing my account in 7 days, and they were going to keep any money left in the account at that point.
Is that even legal? If so it sounds like an extraordinary loophole.
Doubt that's legal. I've had a few hundred bucks I lost track of in an ING account a decade ago that I was able to collect through CA collections. They can't just keep it. Smells super shady.
Sounds like a perfect storm of terrible experiences. I've used them for over a year without any issues. Hopefully I don't come across the same experience you had.
I liked the idea of simple, but didn't like the fact they couldn't send me checks to use. They'll mail them on my behalf but not send me an actual checkbook to hold onto for one off situations. I rarely use them, but sometimes contractors or landlords prefer this method or charge exorbitant fees to use a credit card.
Also if I come into a decent size amount of a cash payment, I can't walk into a bank to deposit it. Mailing in straight up cash seems super weird to me.
Workaround for both of these things are postal money orders. PMO's are basically checks in every way that matter, to the point where I've yet to find anyone who won't let me use one if they accept checks.
$1.95 per $1000 is pretty reasonable as far as fees go. If you want to deposit cash, you just get a money order for the amount, make it out to yourself, and use their photo check deposit. Funds available next business day.
If you need to pay someone, you buy a PMO with your debit card.
It's kind of an annoying requirement, but it beats the hell out of dealing with the banks in my area.
Huh, this is something I've never had to deal with or even knew existed. But yeah that makes sense. Appreciate the response for future reference I ever need to do this. I also agree that's not much of a fee and this would be a super rare scenario.
Yeah except a lot of debit cards have a $500 daily transaction limit.
They usually have a limit for withdrawing cash, but not a limit for POS purchases.
FYI, they just started offering paper checks. It's in beta I believe. I received my first Simple checkbook and wrote a check just a couple weeks ago.
Cool. Now they just need to give better interest rates compared to Schwab and Ally. :)
Downstream of you handwriting a check is a hundred million dollar quagmire of process and tech to deal with the aftermath of your dead tree scribbles.
Just let them mail it... Simple!
Hey I'm with you. I would love for those to go away and everything work off of digital transactions but some property managers (even in new complexes!) pay for some poor saas solutions that use a mix of dated tech and charge ridiculous fees that almost force people to not use it.
Would just much rather use a real bank that lets me write checks for free (was a BankSimple beta user, and left after they were acquired by BBVA).
That's Random Startup #347 ;) I have considered trying Simple but not gotten around to it yet.
> I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc
Heck not even real "Accounts" (in the traditional banking sense) but just "funds" or "virtual accounts." I should be able to put $5/month into a "waste of money" fund, and then flag specific transactions against that balance when I use it, or as you said have a virtual credit card that goes straight out of my virtual "waste of money" fund.
It really is surprising how little innovation occurs in the banking space. I want more tools to track expenditures and money usage, silo-ing money virtually is an obvious way to do that, but yet nobody really offers it!
The innovation occurs, just outside of US for some reason.
When I was a student, in 2001, Poland, I had such functionality - I had separate sub-accounts, each one of them with a dedicated IBAN number, receiving funds.
My monthly allowance from the parents went to one account, my payments from clients (freelance programming) went to another one. From that I distributed the money into another account for holiday savings, and to a spending account with a dedicated and free wire transfer of $5/day for daily spending - the only one I attached a debit card to.
Once I got a browser in my phone, I think around 2004, in case of emergency (as in "standing in line at the store, and discovered I'm $2 short"), I could transfer the money between various accounts instantly.
Another cool thing was that since my father had an account in the same bank, I received all the wire transfers from him instantly. As in, I call him, ask him for extra $100 for something, he says "hold on", opens up bank account on his browser, sends the money, and I instantly get a text message that the funds are received, and I can politely say "thanks dad, I got it" before disconnecting :)
Using past tense, because that was all in 2001-2004. 16-18 years ago. Right now I think all the major banks offer that, so nobody considers it a big deal any more. Oh, and now we have instant inter-bank transfers, but they cost "a lot" - like a flat fee €1, so people usually send the regular free ones, which take <1 work day to get delivered (<3h if you send them between 7am and 5pm) - regardless of which bank you are using.
In the UK we actually have free instant inter-bank transfers. I send money using the app from one bank to the other bank and get the push notification from the second bank confirming I have recieved the money before the UI in the app from the first bank has even confirmed the money has sent.
I highly recommend checking out https://www.youneedabudget.com for the ability to do this and more. (No affiliation, just a very satisfied customer)
Does that require giving them your banking online login details?
Buy YNAB 4 (aka YNAB Classic). You'll have to import transactions manually, but I much prefer it to their subscription SaaS offering. I've used it for five years and love it.
I use a python script to download most transactions from banks/credit cards. https://sites.google.com/site/pocketsense/home/msmoneyfixp1/...
There are enough people who do this that you can figure out how to access the OFX endpoint for most financial institutions.
You can import transactions manually into NYNAB (the new web version).
One problem I have with relying on OFX is that I have a nagging suspicion that it's not as 'official' as the statements. If there were a discrepancy between the two, I'd worry that I wouldn't be able to resolve it in my favor without having reviewed (and thus downloaded and reconciled against) the statements.
I was in your same boat until the SaaS offering started really figuring out how to do credit cards. Now, it's finally the better of the two options for me.
There's yet another thing that's needed industry wide. Oauth or similar concept with read only access to a data api.
We used to with something like quicken, but most banks half ass it.
I really think the state of how bad consumer bank integration tech is has led to this reality of login and scrape that you have with yodlee & co.
plaid.com
And Yodlee. Quovo. Tink. Finicity. A zillion others. This is where modern banking data is moving, for better or worse. I think it's better, but the world is still on it's first steps in this "more open" financial data linking space.
plaid asks for your online banking password.
If you want auto-import, yes.
Otherwise, it requires only an email (and that you pay them 5$/monthly somehow. Paypal, credit card, whatever).
If you don't want auto-import (which doesn't even work for my credit union anyway), you can uploads .csvs, or manually input your transactions.
If you're concerned about that, you can always go with desktop software. Quicken will do "virtual accounts".
Or Free Software alternatives such as GNUcash.
LWN have a current "Grumpy Editor" series article on Beancount:
https://lwn.net/Articles/751874/
And an older one from 2009:
https://lwn.net/Articles/314577/
The correct term would be “facilities”, but this jargon is only used for corporate/UHNW clients with complex credit needs IME.
I work for a large bank and can offer a tip. When you find yourself in this situation -- please create an incident report by lodging a complaint with the branch manager or online . Tweet if you must : your goal is to make sure that an incident shows up in the CRM. Branch managers bonus is tied to customer satisfaction parameters. This will not make you situation more bearable but it will force the branch to be more responsive in the future.
No.
The correct answer is to close your account and move to a bank that actually has an interest in providing customer service. (Credit unions are great.)
I have zero interest in some company's CRM, how they apportion money to employees, or anything else of that sort. If a company cannot get meaningful feedback about customers' reaction to their service, well, that sounds like they have a serious business problem to solve, and expecting me to fix it for free is, frankly, insulting and doomed to failure[1].
My rule in life with this sort of thing is simple. Don't do business with assholes.
[1] Get back to me when WF's CEO's bonus depends on customers going out of their way to provide feedback.
This is the correct answer. Many times people feel trapped in their bank because it is a pain to move, but it’s not hard.
Throw me on the pile of people who don't love that tip. I'll go a step further and say, if that's the best remediation policy a large bank can offer, they're in a really bad spot.
As a consumer, I like my financial services to come in one of two flavors: Completely automated and self-service, or very personal.
Because I want to either never have to pick up the phone, or I want to know that, when I pick up the phone, ring straight through to a knowledgeable and empowered professional, instead of waiting on hold for 30m before getting some call center drone.
Any company where keeping a handle on customer service involves a signal having to filter through a CRM system and multiple layers of whatever-else-is-going-on-in-there is in neither of those camps: They aren't sufficiently automated and streamlined to give the hands-off experience, but they are also too bureaucratic to allow their customer-facing staff to offer a good hands-on experience.
And I just ain't got time for wallowing in some Goodhart's Law quagmire like that.
Don't direct people to bullshit bureaucratic snakeholes.
Even as someone who had abysmal interactions with mainstream banks when getting my mortgage, I don't think your response is charitable to the parent commentor, even if you don't think it's worth your time to provide feedback to a business entity, which is well within your rights.
If I as a dev for a large company see people online complaining about my product, I'd _probably_ tell them, in good faith, that if I had no direct touch to help, what channels they MIGHT be able to touch to have an impact, even if it's only post-factum.
What would you rather the business do? Have 0 receptivity to any channel of communication? Yeah, ticketing and support often sucks. But I see no reason to bite the hand that's trying to help you, both when they're going out of their way to try and give information that might move the needle, and when I'm hard pressed to give any more actionable advice. (at least for parallels within my space.)
I certainly would have liked to know I had _any_ recompense after BoA left me high and dry on some last minute mortgage detail and my agent went AWOL right before signing, even if it wasn't going to necessarily help my situation.
> as a dev
I've had a number of devs, when receiving feedback, tell me that I should instead seek out their bug tracker, register with their feedback system, open a support ticket, give detailed instructions about how to identify and fix my problem, and then wait for a decision about how I'm wrong.
I've done that maybe twice.
I have so many problems of my own that I have no time or interest to fix theirs. If they are blind to their problems they deserve what they get.
That's not my job.
Yes, but there are two issues here. One is getting your trouble resolved. Sadly that means doing some work you shouldn't have to at present. The other is sharing all those experiences so that we can garner momentum to change things.
Both problems can be resolved by moving your accounts to a credit union, and encouraging others to do the same.
I like credit unions, but I recently left one after they started adding various fees. CUs also often do not have the resources of a big bank. I have been stuck in Europe before waiting for the bank back home to open because they blocked my debit card even after I told them I was traveling. The contract 1800 number could not fix my issue.
IMO, the current best banking experience is Schwab. Hopefully they don’t make dumb changes and screw it up.
There is a theory that you should fix your own problems before you fix other's.
That's not a theory, that's a slogan.
And that's a straw man
You can do it concurrently.
Bingo
What I do, is just take my business somewhere else. Most people don’t review or give feedback, you just lose them and their word-of-mouth network forever. If it takes a bunch of extra steps to get your institution to do its job, I count myself lucky to have avoided deeper engagement to begin with. With any luck, enough people do this and your bank changes or dies.
I’m tired of businesses trying to get me to do their jobs for them.
Account closure doesn't register in manager KPIs?
Thanks for the tip.
The UK actually has a bunch of 'challenger banks' that are doing cool things like this.
I use Monzo which, a few month ago added support for 'Pots' - super lightweight mini bank accounts that let you partition up your money. Among others, I have a Holiday pot and a Savings pot. They even have this early stage feature where if you name a pot "Coin Jar" they'll automatically round up transactions to the nearest £ and transfer it to that pot.
Using something like Monzo is like night and day compared to the products from the big banks.
ah hah! I was looking for a bank with this type of feature about 6 months ago, thanks
The budgeting part of what you're describing is basically YNAB. https://app.youneedabudget.com/ It's a set of virtual buckets for allocating what money you currently have. It's not free but it's great because when one bucket's empty, it forces you to choose where else that money is going to come from. Like, "OK you blew threw the beer money, dum dum. Do you want to steal from your vacation fund or the new computer fund." After using it, I would argue that the ideas of "budgeting" and "without any effort on my part" are not compatible. You have to make hard decisions with limited resources and a good budgeting system should automatically bring those hard decisions to your attention and not just let you see how you screwed up with a pretty graph a month later (cough, Mint).
Also, many people use it without auto-import, but then you obviously have to be rigorous about entering in transactions. Anyway, it's an option.
I'm a YNAB user in the UK, where auto-import isn't really practicable because banks refuse to guarantee you against fraud if you give our your online banking details to anyone else, including YNAB. That should change this year because they're being forced to allow customers to use that data: https://www.openbanking.org.uk/home/what-is-open-banking/ However, I've actually found it very useful to spend time manually entering my transactions because it's given me a much keener understanding of my finances. Having said that, I've got as much out of that as I'm going to now so I'm looking forward to being able to do auto-import.
I do auto-import in the US and it's pretty nice. I still manually enter in things at the end of the month (otherwise they might not clear for a few days and eat out of the next month's budget). But it does a good job of recognizing when it auto-imports a transaction you already entered manually so you don't get duplicates.
Open banking seems like some insane idea passed on the nod by well-off MP's who probably have no idea about how to make sure banks properly look after the average tommy Atkinson customer
What you describe are common features available to all customers of Danish banks. Free of charge in any decent bank. You get the “Dankort” (den card) for free. It’s a debit card that’s universally supported in all shops with zero surcharge. It’s trivial and a common service to share accounts with multiple cards in your family.
Have been doing this with savings and checking accounts at Ally Bank for over 8 years. Have stuff broken down into emergency fund, slush fund, home buying fund, monthly bills, regular checking, funny money, and some "business" labeled accounts for side projects. You can create an account in about a minute when logged in, though to remove an account you do have to call in, but they have no problem doing it. I have open and closed accounts several times a year when a project dries up or we change how doing finances.
It also doesn't hurt that they have good interest rates, no foreign expense costs, and don't charge for things like debit cards, checks, autodraft, bill pay, etc.
I do think they are USA only though. Not sure how it works for non US citizens.
A plug for Personal Capital for tracking multiple cards / investment accounts... No ads, just prompts to sign up for their managed investing service occasionally (can't speak to that, fee seems high...). But their free product is substantially more useful than Mint et al. Great web app, great iOS app, really good tracking of expenses and cash flow. Some small annoyances like not linking with Coinbase / Robinhood and not allowing batch editing or smart-editing of transaction categories, but they are small when you look at the larger picture of all they provide for free.
It's definitely an industry ripe for rebirth.
Or simply for death. Not my idea, I first thought it was a joke when they told me, but it makes perfect sense. I get exactly zero interest for my savings, not even to compensate inflation. It's stock options or bs funds.
Only useful service I get is cards and avoiding keeping cash in a physical safe. Credit comes from cards or specialized loan companies.
There are two services that do matter: mortgages and credit lines for companies. I can see how this kind of volume operations could be also be done by specialized companies so generalistic banks could disappear.
You don't even get to choose your mortgage company.
A few years ago a friend of mine bought a house and actually turned down a house who's sellers had a bank of America mortgage as he had bad experiences in the past. He went out of his way to choose not to deal with them, but to his suprise 30 days after he closed he got a letter in the mail telling him that his mortgage was sold to Bank of America!
And not suprisingly he had the same issues.
As part of your disclosures, lenders that plan to sell your loan will usually be required to disclose this fact, so you can deal with a lender that keeps their loans in house. The last house I bought the company disclosed that they might sell the loan, but they remain the servicer on the loan, so I don't even know who owns it.
Since then I've bought 2 houses, and both mortgage companies I've worked with had that clause.
Is it actually possible to find someone who won't? Or is it just a false sense of choice like the ability to "choose an ISP that says they won't sell your information"?
Some credit unions may keep the mortgage in-house, but afaik it's mostly private banks working with HNWIs that will do so 100%. Those mortgages are often very large or non-standard (like 100% financing interest only or a combo mortgage/heloc).
Some small community banks maybe? Some banks keep at least a portion of their loans in house. In some cases they may still have that clause in case they decide to sell it later, even if they plan to keep it in house.
It is possible. Smaller banks and CUs will often keep mortgages. Suntrust for example, tends to keep their mortgages.
I have never purchased property in the US, but I keep reading horrible anecdote after horrible anecdote, so I have to ask:
As a buyer, why would I even care who the seller has their mortgage with? Why would that matter?
Where I'm from, the real estate agent deals with that shit. When you close the deal, the agent calls up the new bank or faxes them or whatever so that they open a mortgage for X amount for the piece of property for the buyer, and directs them to send Y to the old bank so that they close out the previous mortgage, and Z to the agent's account, who then takes their cut, and forwards the remainder to the seller.
Is this not how it works in the US?
It really shouldn't be relevant. Your title company will usually handle closing (apparently where you are form the agent does this? Here, the agent usually helps you so you don't have to deal with the title company, but the title company is responsible), and they will deal with the previous mortgage company. Usually you should have title insurance in case a problem does crop up (required for most lenders)- and your title company can deal with it. So the real nightmare is when your title company handling the transaction is a problem. (Usually the seller chooses the title company, but this can be negotiated between buyer and seller, and many sellers are more than happy to use the title company of your choice- if you pay for it).
Title company? Title insurance?!? A third-party for-profit company handles some aspect of the transfer of property, instead of, you know, government? And in case this third party fucks up, you need to pay for insurance?!?
Jesus.
You said the real estate agent handles it where you are from- are real estate agents government officials where you are? You don't have to have a title company, you could do it yourself, but a typical real estate transaction involves large amounts of money and multiple parties, so most people want someone else to handle it all. If you are borrowing money, you lender will probably insist on it.
This is how it works in Sweden, as far as I understand it:
Real estate agents have to be licensed, and part of their duties is of course to verify that the seller is who they say they are and that they own the thing they're trying to sell. When I sold an apartment, I had to show my ID to my agent so he could verify me.
The registry of who owns what pieces of land is managed by a government office, and government data is by legal default public, so checking if a seller actually owns a piece of land is trivial. You don't need to chase down a distributed sealed deed history thing thing, it's basically a single national database at this point.
So it's really simple to do, and the responsibility is on the seller's agent, who in turn has a strong incentive to not screw up, or they lose their license and their job.
When you go to your lender for a pre-approval on a mortgage, they want to know which piece of property you're buying, and they typically check that it's being sold by a licensed real estate agent, because if it is, then they can be assured that the seller is verified and actually can sell the property.
When you sign the purchase contract - which is typically one or two pages long - you sign one copy for the seller, one for the buyer, one for the agent, and one for the government office, and the agent helps you fill out the (short) form that goes with it so you can send it in and get the ownership legally transferred to you. That's it.
There's so little work involved with verifying ownership and transferring ownership, that it's just put on the shoulders of the real estate agents. The idea that you would need yet another party to handle this aspect is completely ludicrous in Sweden, it makes no sense.
No. There are no loan assumptions in US. Seller’s mortgage holder is irrelevant.
Ok. Good. :-)
So why was Klathmon's friend bothered by it?
Because now his friend is forced to be a customer of Bank of America unless he goes through a refinancing process. Even then, unless he's very careful, he could end up refinancing with a company who turns right back around and sells the mortgage back to Bank of America. The same thing happened to me. I've had two mortgages through other banks who then sold my mortgage to Wells Fargo forcing me to have to deal with them and I had absolutely no say in it.
In his case Bank of America attempted to forclose on a house he bought after he bought it.
I presume your friend had title insurance, and the title company dealt with it?
Oh I'm sure, I didn't follow it all that closely but I remember it being resolved within a few weeks, but the headache was apparently enough for him to want to avoid sellers with BofA in the future.
1. In the US, becoming a Realator is 8 courses, and two years "experience". In California, up until a few years ago you didn't need any experience if you had a four year degree. (The added mandatory experience requirement was not necessary. It just cut back on the number of Broker's Licenses issued. Making the best looking real estate cheerleader just more wealthy. Will explain in more detail below.)
2. In all honestly, the Realator should have been retired by now.
3. They basically just hold your hand while collecting 3 percent on the biggest purchase of your life. That's full commission. Supposedly, paying full commission gets you a better deal?
4. I believe the biggest assent any agent possesses is a great Ommission & Error Insurance policy.
5. Yea--I do have gripes about the whole industry.
6. But if you are a foreigner, a Realtor is indispensable. In this wonderful country, we allow anyone, to buy up our Land with a phone call. It irks me to no end. We have strict immigration laws, but allow rich people to buy our Land? As I step over homeless, and see huge empty houses; I just want to scream.
7. Just letting off steam. As to a good mortgage, they all supposedly have a "guy", but do your homework.
(The experience requirement was lobbied to limit the number of Broker's licenses out there. Their wasen't any evidence experience made any difference, but Gov. Brown fell for the ploy. Ironically, Governor Schwartznegger didn't cave into the lobby effort. He saw no problem in the industry, and making it difficult to obtain a Broker's licence as anti-commpetive. I stopped looking at party affiliation when he did what was ethical/moral. Arnold wasen't a bad politician. I didn't appreciate him at the time, but I do now.)
It's been almost exactly 2 years since I bought my condo, and I'm currently on my fourth mortgage company. Which is now Wells Fargo! I don't know why they keep selling my mortgage.
*servicer. Fannie or Freddie probably own the note.
Banks don't do anything useful that cannot be provided by other means. They are completely useless. The only thing that banks do is to provide credit against things you already currently own, like mortgages and commercial loans. But these things could very easily be provided by an official agency. For example, if you don't pay your monthly mortgage you just lose the house and an official agency will deal with the sale of the property (maybe through third-party services). Same thing for commercial loans. There is no need to create a private, for-profit bureaucracy to handle this.
So... Your alternative to banks is banks, but public sector, and you expect this to improve the bureaucracy level?
It doesn't need to be the public sector directly. What I mean is that banks are not using their own money to do what they do, so it does't make sense to let them charge interest. There could just be a set of regulated institutions that charge fixed fees (independent of the amount of the operation) to perform these tasks, which basically consist of converting one form of wealth (real state or business assets) into monthly obligations.
More like reuse an existing bureaucracy instead of creating a parallel, private one.
All the things you describe could result in an amazingly improved experience for customers, letting them better control their finance, and understand where their money goes.
Sadly, this is not how banks become rich. Banks become rich by letting their customers spend a lot of money they don't have, then charging them insane interest rates that will often result in them paying back multiple times what they originally owed.
Having moved to the US from a country where the idea of a credit card is close to inexistent (people take loans to buy a car or a house, or start a business - but certainly not to buy a TV), it took me a while to fully wrap my head around how insane the credit system was in the US, and how its only outcome can be very rich and powerful financial institutions leeching money from average citizens.
Yes, that's a serious problem. The changes I suggested are not sufficient to fix the problems in the banking system, they're just features I would like to see (and apparently are being worked on, according to other responses). Thinking further, a determined, well-designed, consumer-oriented bank could steal the "responsible spender" market share from the existing banking system and increase the fragility of the contemporary credit system. No clue what happens after that.
You can try capital one 360 account. It allows you to create virtual accounts for different categories. It doesn’t have all the features you desire, but is better than most other banks in this respect.
Capitol One has one of the largest advertising budgets at > $1.5B. Seems a bit insane to support an organization that is willing to send so much revenue out the door when a good chunk of it could be recaptured by its customers.
Warning: anecdotal.
My friend is a recent employee of Capital One via the Paribus acquisition, and he has quoted his CTO as saying "We're not a bank, we're a technology company."
I don't bank with them so I can't comment on their offerings, but his insider perspective indicates that they're taking technology seriously (hence acquisitions like Paribus).
Every big old enterprise company loves saying things like "we're a technology company".
Seems weird to base your decision on how they spend their money. Isn't how much they actual charge you what matters, rather than what they use it for?
$1.5 billion in marketing on $30 billion in revenue doesn't seem that outlandish. Maybe it is for a bank.
If it matters, Capital One 360 is, or at least was, the old ING Direct USA. The whole division was acquired by Capital One.
more like a wanna be tech company.
It's still Capital One at the end of the day... I really don't relish the idea of giving them money.
Hey, just playing devil's advocate here. Some banks come pretty close to what you're asking for. I go to a small, community bank in flyover country that uses Jack Henry as a SAAS for its online services. Most of the things you asked for are already being offered.
> I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc
You can open multiple checking accounts at most banks. I've made partitioned checking accounts like this before.
> automatically have fractions of my deposits sent to those accounts so my budgeting and money management are handled without any effort on my part.
Money transfers can be scheduled but they're usually by set amounts instead of fractions (e.g. add $100 on the first of the month). I use this myself.
> I should have lightweight cards available for each of those accounts with online card management (request/terminate cards, track per-card spending)
Should be able to open debit cards for each account but you'll probably need to be in person to request/terminate them. Maybe you could do it over the phone by authenticating yourself, not sure. I haven't heard of per-card tracking but at least you know what you spent on your card.
> multiple cards per account so I can give my wife full use of "grocery" card
You can tie multiple debit cards to the same account for a husband and wife. Try explaining what you're doing and a banker should set that up for you.
> alerts/notifications when I am spending too much in an account/not efficiently allocating the full amount/potentially using a card improperly
There are account alerts that can be set up for exactly this. I have it shoot me an email with the alert message when something gets triggered.
> financial projections
Account history can be downloaded in common formats like csv. There are already tools you could use to create the projection and do fancy data visualization things for yourself. You could scrape your account data periodically using your online banking credentials. Might be dangerous to automate though.
> For instance, I should be able to partition my money into several lightweight accounts - one for groceries, one for home expenses, investment, etc - and automatically have fractions of my deposits sent to those accounts so my budgeting and money management are handled without any effort on my part.
This part probably can reasonably be handled with a spreadsheet at home, so if you can't find a bank that supports it you can still get the benefits. Plus, that handles money that is not at your bank, too. For instance, many people prefer to use specialized firms for investments rather than their bank. For example, an index fund from Vanguard probably has lower fees than a fund using the same index from a bank.
> I should have lightweight cards available for each of those accounts with online card management (request/terminate cards, track per-card spending); multiple cards per account so I can give my wife full use of "grocery" card, and alerts/notifications when I am spending too much in an account/not efficiently allocating the full amount/potentially using a card improperly; financial projections; and so on.
I can't think of a good way to handle this at home without bank support, at least automatically. You might be able to do something using prepaid reloadable debit cards. E.g., you give your wife a prepaid reloadable debit card specifically for groceries, and you handle loading it from the grocery virtual account.
I don't agree that managing a spreadsheet to keep track of money folders is reasonable, when we live in the modern day off technology. I too have longed for having custom bank accounts with the strict purpose of keeping certain money separate from other money. My savings account keeps money for several purposes, but anyone looking at it would just see a single sum.
I can actually do this with Simple. I have been disappointed with their velocity of new features, but they do that really well with their "goals", I really like the feature.
I was hopeful simple would have become this magic solution but they just released the concept of savings funds that transactions won't pull from after waiting seemingly 7 years for it. Along with their strange "no long term travel" policy, I'd wouldn't recommend their service for anybody outside out college.
I've been Simple customer for years- never heard of this "no long term travel" policy- can you elaborate?
Edit: I just looked, and they indeed state that they may have close your account if you are traveling for "a very long time" or moving out of the country... odd, I wonder what their definition of "a very long time" is?
I manage most of this with Ally.com. Each bill has its own savings account (most with automatic payment set up on the account side). My direct deposit is automatically transferred on a recurring basis into that pay period’s portion of each bill.
You can open multiple checking accounts (and we have multiples for those services that don’t draft from savings accounts), but we only have one debit card. All weekly expenses come from that account (which is funded every week by auto transfers).
We aren’t the type that care about “entertainment” vs “food.” Some weeks we eat out more; other weeks we play. If there’s cash in the spend account, buy what you want.
Savings and investments are automatically transferred as well. When we have a specific thing to save for, we open a new savings account and modify the transfer rules.
Not perfect, but works very well for us.
Check out the first half of http://steve-yegge.blogspot.com/2009/04/have-you-ever-legali... for a discussion of this.
I disagree that all those questions (and probably most of the others he didn't list) need thorough discussion. A strong product head can define the vision that answers those very early on. Integrating with existing systems is definitely the hard part.
I mean, most of what you want is already available, the majority of banks allow you to open multiple checking accounts, between my husband and I we have four Navy Federal checking accounts - one for me, two for him (long story why), one joint account. You have to go through the "account opening" procedure, which I guess isn't "lightweight," but it's not difficult or anything. Some banks don't even make you type in your personal information if you are logged in.
Then you can get a debit card for each of account and you can set your paycheck to deposited into each account with your company's payroll. Automatic transfers would work too. I do some budgeting per checking account, the joint account is for household bills. Savings is automatically deposited into my investments account too - did that with payroll.
Problem is some banks want fees per account or want you to jump through hoops to get the fees waived, but it's possible to get a no fee per account bank.
Youd be MUCH better off doing this with separate credit cards rather than separate bank accounts though for many reasons. Credit cards are big on account alerts - not sure if bank accounts really do account alerts, haven't looked into it. Just get a "grocery" credit card and a "fun" credit card, "bills" credit card etc. I, personally, have seventeen (17) credit cards.
I have a few other checking accounts with different banks, most of which are opened only temporarily, I churn bank account bonuses.
I've been planning a side project with a lot of those features. That's exactly how I think about my budgeting and that's exactly how I would like to allocate my money. I'm really not aware of any way to do this currently, apart from a lot of manual work in a spreadsheet, which is annoying and still requires restraint in spending. Mint isn't even that helpful when it comes to budgeting because their alerts and categories are always inconsistent and they change categories that you've set for no apparent reason. Not to mention the ads.
Unfortunately, getting data from bank accounts is a pain due to bank security. The approach I was going to use just to get started was to export Mint's data as a csv, and then build an app around that until I read up on the bank transaction formats that would let you pull your transaction history. Not ideal, though.
Have you looked at plaid? I'm not sure what their rates are like, but if you're doing just a personal project, you might be able to get away with their developer evaluation (though that only lets you interface with big banks, not the small ones - the developer evaluation that is).
Edit: plaid is a nice abstraction bank api: https://plaid.com/
Hi there - full disclosure, I work at Plaid . Anyone can signup for API keys and access all the thousands of banks that we currently support on Plaid for free in our dev environment.
Once you want to add more than 100 accounts, we recommend reaching out to learn more about pricing at scale; it depends on what APIs are being used, how much data is being pulled, how often, etc. Feel free to shoot me an email directly if you have any questions! (charley@plaid.com)
Ah, I had used it couple of years ago. At that point, I could get to my bank account with it at a major bank, authentication with smaller credit unions was restricted until I graduated from the dev environment.
I'm glad to hear that's not the case anymore.
>I'm not sure what their rates are like
Very opaque and very expensive ($500 / mo+)
Also, they will shut down your account if you don't use your free edition enough.
Hi Madeline - happy to share more info on pricing - we're working on simplifying pricing for early stage / bootstrapped products . Feel free to reach out directly to my email if you want to learn more (charley@plaid.com).
We'll occasionally flag accounts that have dormant API activity in our development tier, but as long as you're still using the API we're happy to cover the cost of the free account.
> export Mint's data as a csv, and then build an app around that
This is what I do. Mint doesn't have an API, but I just inject some javascript using the console that pulls the csv file and displays the data in a way that makes sense to me.
SmartyPig does some of that. You set savings goals which is a little different than just funding categories, but you might be able to make it work. Maybe they have an API and you could let them deal with the banks?
Checkout YNAB (You Need A Budget).
You can do those things.
For sub-accounts, Capital One 360 is the easiest in terms of creating and removing accounts for specific purposes.
Most credit unions have this ability as well. I have accounts in two, and they use the same software platform that makes it easy to partition money in the way you describe. The only difference is that opening and closing sub accounts has only recently been available from the web interface.
Basically, there is no good reason to ever use a commercial bank, unless you have millions of dollars sitting around or handle a lot of cash and the convenience of a BoA or Wells Fargo has value to you for that purpose. Commercial banks will always be more expensive and less responsive.
In he UK there are actually a number of new startup banks (I believe precipitated by a change in regulation which eases the requirements for small banks).
My bank starling almost has this feature. It allows you to create "pots" which partition the money. However it is slightly more limited in that you only have one card and can only spend money that is not in a pot. You can however move money between pots instantly using the app (as well as many other useful features such as viewing/changing your PIN, and temporarily blocking/unblocking the card (useful if you lose it, but think you might find it again))
Monzo is doing pretty much what you describe and are a real bank (in the UK for now, I believe they have plans to launch in the US soon) - they don't have cards per subaccount, but they are api first, which is nice.
I agree it's a sector ripe for rebirth - it's an interesting time to be alive - we're living through a revolution comparable in scope to the industrial revolution, and industries like banking, which are primarily about storing and moving information, will be radically altered. Banking is one of the last to be touched.
"You Need A Budget" is excellent budgeting software that works like this. You can make separate mini accounts for different types of purchases. It imports transactions from nearly every bank and Venmo. It works on web and mobile. And the company sells subscriptions so you are the customer.
https://ynab.com/referral/?ref=RhsyymvEwUvLaJTk (If you sign up with this link then we both get a free month.)
> If anyone has any recommendations in the meantime, please let me know!
I do this today with my regular bank account that's with a big bank. I can open subaccounts, get cards for them (or student cards for young family members), have automatic transfers setup for the day after my check deposits, etc. All accounts are listed on my account summary page.
This works fine for me. As a bonus, there aren't any extra fees for the privilege of giving my bank credentials to a third party.
If you move to New Zealand, several banks the ability to split paychecks into different accounts, with the option of having a bunch of cards if you wanted.
What I would personally like is an extension to the EFTPOS standard so that I can get receipts with my transaction history. It would be great if instead of just saying I spend $50 at the supermarket, it gave me itemised receipts which I could then export.
> If you move to New Zealand, several banks the ability to split paychecks into different accounts
This is available in the United States, too. I've had the option with a couple of different employers over the years, at least back into the 90's. But it seems to be dependent on the the company's accounting/payroll people/service.
I do almost exactly what you described with Charles Schwab.
I have multiple "full" accounts, but there's no maintenence fees or anything. Their online tools are great. You can open a new checking account with the click of a button.
As I understand it, you need a brokerage account to get this; it's called the "High Yield Investor checking and savings account". It's not intended for most people, though apparently they don't care if you get the brokerage account and don't use it. On the other hand, Schwab has effectively zero physical branches, and apparently don't accept most ways of depositing money to your account, which makes it awkward to deal with cash and checks that end up in your hands for whatever reason.
All accurate. It is definitely marketed at investors, but I've used it as my checking account (er, accounts) for years now.
Although there are a handful of branches where I live, I never physically go there. I handle all check deposits via their mobile app. I never receive cash for anything though. You are correct, it would probably be a bad choice for someone dealing with a lot of cash.
And as a sibling comment said, no ATM fees anywhere in the world, ever.
No fees on ATMs, including international ATMs. Also, their 24/7 Chat Support is stellar.
CapitolOne! You can open an accounts online, no fees and you get interest on your balance. I have more than 20 accounts with them for everything from saving for vacation to saving for unexpected pet expenses.
Qapital provides some of the features that you've mentioned: https://www.qapital.com/spending/
> It's definitely an industry ripe for rebirth.
I'm eagerly looking forward to Silicon Valley disrupters getting into banking and, somehow, making it even worse.
ANZ does most of this, though you’ll have to set up the logic yourself. Oh and US banking may be too primitive.
No need for multiple cards. While we are thinking of ideal scenarios, might as well go with mobile payments.
Quite amazing how backwards US is in this manner.
I had an account with exactly this functionality ~18 years ago (sic!) in Poland already. All three bank accounts I have in Poland right now offer that - and I think it's the standard in the mainstream ones.
Ripe for rebirth? They broke the law and faced no substantial consequence. And no, a fine isn't substantial.
We need a complete overhaul of our society, starting with the banks.
I had a similar breaking point with Wells Fargo.
I was about 20. Needed to get something notarized, someone mentioned that banks could do it. I googled and confirmed WF could do it for their customers so I went over to my nearest branch.
Asked the front desk if I could get something notarized. They said sure and referred me to a banker at a desk. I walked over and sat down and told him I was looking to get something notarized.
He said sure, but first can I ask if you've considered upgrading your bank account? I said I didn't think I was interested, but he decided it was worth a few minutes of my time to pull out a pamphlet and talk me through the benefits. I thought I was through it. But then he started asking me if I had considered opening an investment account. I told him that with my current earnings and burn rate it didn't make much sense. But he decided to walk me through the benefits. Then I thought surely, he must be ready to help me notarize my document. Nope. He wants to talk about - I don't remember - small business loans, life insurance? Something that made no sense to offer a 20 year old. Sat through that presentation. I'll make an aside - I was much less experienced with deflecting sales pitches at that age, today I'd have stopped it all much sooner.
But I digress. After 10-20 minutes of pitches for products I never expressed interest in, he finally gave up and asked me what I needed notarized. I honestly don't remember what it was, but he turned around and instantly told me that they weren't able to do that type of notarization. Despite wasting so much of my time, they didn't even have the courtesy to make sure they'd be able to help me out afterwards before launching into their pitch.
A few months later walked by a branch and on a whim decided it was a good time to close my account. Walked in, ask to close it, they said I had to wait, I said oh OK that's alright I'll just withdraw all of it. Good riddance.
> A few months later walked by a branch and on a whim decided it was a good time to close my account. Walked in, ask to close it, they said I had to wait, I said oh OK that's alright I'll just withdraw all of it. Good riddance.
Careful, if it's not actually closed they'll hit you with fees.
C'mon, this is Wells Fargo we're talking about! They'll hit you with the fees whether the account was closed or not.
Or just apparently open a new account for you.
"a" new account? not 5?
Just logged in to check.
Balance: $0.31
"This account is dormant. Call us at 1-800-869-3557 to reactivate or close your account."
How convenient that there's absolutely no information about the consequences of a dormant account.
And thats when he realized Wells Fargo got the last laugh, 10 years of late fees
Personally I would simply ignore those fees. At the end of the day they have zero leverage to collect.
If only.
All banks, even the local ones, use something called Chex Systems, which works somewhat like Equifax for bank accounts. If you leave an account open with a $0 balance, and something hits it, and causes an overdraft, and accumulates fees, and then they close it later on for you with a negative balance for hundreds of dollars, then this gets reported to Chex and the next time you try to open an account with any other bank, they say, "Nope, we have a record here for you for account abuse."
These records stick around for about 7 years -- longer than many items on a credit report.
Can confirm. I had a negative ChexSystems report cause me all manner of grief after a credit union account I forgot about got closed out 23 cents in the negative.
Two dimes and three pennies. It cost them more than that in angry phone calls and reporting it in the first place.
Broken system.
In college, I had an account at Wells Fargo, and my parents would occasionally deposit money into it as a way of sending me money for free. One day, my mom tried to do this and got sucked into a 20 minute sales pitch to switch my parents' mortgage to WF. The teller finally took the cash, but it never actually appeared in my account. After a few hours, my mom went back to the bank, and they couldn't find any record of the transaction - but the teller remembered spending 20 minutes talking to my mom, so there were able to find the money, deposit it correctly, and solve the problem.
So, I mean, there are some good things to those pitches I guess. Wells Fargo is impressively awful.
I have a suspicion that they (and other banks) may employ some 'secret shopper' types. If they don't pester you with annoying stupid unrelated questions, they will get penalized or fired. Such is "retail" in the US.
One piece of it is actually regulation. When you're dealing with huge amounts of yellow tape and you have millions of customers, the overhead cost of providing services is absolutely sky high. Many of their clients don't even make them money; think of the Starbucks barista that has $1000 in checking and no savings. Sure they can turn some of that money around into interest, but the cost-per-customer of lawyers, compliance, auditing, etc is far higher.
Any of the banks that are actually offering decent interest rates on deposits are online banks, because it enables them to centralize and automate all of their operations in one place.
Credit Unions are similar. They usually serve a smaller community, which means they're centralized and have less overhead. They are also beholden to different less-strict laws.
I've heard this first-hand from the founder/CEO of a small local bank. Every time they write a loan they are forced to provide the customer with a 200-page "book" of all the compliance and regulation surrounding that loan. The client immediately throws it in the trash, every time. It hurts the bank, because they have to print that, audit it, have lawyers look it over, maintain it. It also hurts the client; these laws are meant to inform consumers, but in reality they irresponsibly only require banks to throw incomprehensible amounts of information at consumers. Like website Terms of Service, consumers never read it, they just trust what the bank teller tells them.
>Every time they write a loan they are forced to provide the customer with a 200-page "book" of all the compliance and regulation surrounding that loan.
This must vary by state; I recently took out a small loan from my local bank in Pennsylvania and the information I went home with came out to about 15 pages.
>When you're dealing with huge amounts of yellow tape and you have millions of customers
I thought the conventional wisdom was that onerous regulation actually favored huge businesses with "millions of customers" -- for example, the effort of having to "print that, audit it, have lawyers look it over, maintain it" is a fixed cost so the cost per customer is smaller for larger banks.
That is absolutely true. My meaning is that the big banks are the only banks that have survived all the regulation, and the only reason they can survive is because they're increasingly centralizing all of their operations and shitting on average customers who earn them essentially no money.
> the overhead cost of providing services is absolutely sky high
That is an advantage for big banks.
Insane setup/maintenance costs and low marginal costs disadvantages small banks or startups.
Unfortunately, the massive restructuring you're referring to would likely need to be in the form of deregulation. It's unfortunate because deregulating something is typically a non-discussion. Our banking regulations make almost no distinction between massive, "too big to fail" banks and small community banks. Like most regulation, it's the massive companies that can foot the bill for complying with regulation, creating barriers to entry into the market.
I didn't want to think you were right, but digging into this it seems to be the case. Dodd-Frank has apparently been a boon to big banks, and squashed competion [0].
"“Having a bank, it’s a sign of economic vitality,” he says. And it’s not just North Carolina. He notes the country has about 40 percent fewer banks today than when the Dodd-Frank Wall Street Reform Act, passed in response to the recession and implementing the most significant changes to financial regulations since the Great Depression, was signed in 2010.
Proponents of the measure said it would reduce the risk of another financial crisis by decreasing the concentration of resources in a handful of banks. Gwaltney says it’s done “the exact opposite.”
“The five or 10 largest banks in the country are larger than they were at the passage of Dodd-Frank,” he says."
[0] https://banksstreetpartners.com/news/what-happened-to-our-co...
The repeal of the Glass-Steagall legislation (Banking Act of 1933) in 1999 deregulated and allowed banks to act as investment, commercial, and retail at will. That deregulation doomed us to the financial crisis a decade later and the "too-big-to-fail" atrocity that ensued.
That's not supported by the evidence from what I've read.
You can find lots of references from the time of the repeal saying "this is a bad idea because this act was designed to prevent banks screwing around in the way that caused the Great Depression, and the inevitable result of repealing it will be to cause a similar problem".
Then you can look at the CDO crisis less than ten years later and talk about correlation not being causation until you're blue in the face.
Here's another prediction: the destruction of the CFSB will lead to anti-consumer behavior at large banks.
The bailouts certainly would have been easier if retail and investment banking had been separate. With the current state the investment bankers can hold everyone hostage because they may also blow up regular bank accounts.
Why is it always a choice between poorly-written regulations and no regulations?
Because it is so difficult to write good regulations. It is [nearly?] impossible to predict all the consequences of your regulation ahead of time. After the regulation is written there are many more people who have an incentive to figure out how to twist it to their advantage, and they get as long as they need to dream it up. Then they get a as long as they need to try various forms in small areas that you don't notice until they get it "right" and then before you know it they have grown.
It doesn't help that the people who are best able to write the regulations are those who are in the industry: they also have incentive to get it wrong. Either you have people who don't understand the industry writing the regulations despite not being competent to do so, and thus not realizing at all what the loopholes are; or you get those who are inside to close the bad loop holes (the ones they know will be abused and they will get in trouble for) while opening up smaller loopholes that benefit slightly them at the expense of someone else not writing the regulations. Either way you lose, though insiders is slightly better. This is also why you see a "revolving door" between industry and regulators: that is the only way regulators can get the skills they need to write something that isn't completely awful.
>It is [nearly?] impossible to predict all the consequences of your regulation ahead of time.
Yes but why is the burden asymmetric? It is similarly impossible to predict the consequences of deregulation ahead of time yet proponents of deregulation are never held to the total unpredictability of the outcomes of their position.
That is a fair point.
I will partially counter that a much simpler class of regulations can cover more things in deregulation.
For example, if I just make fraud illegal, if you misrepresent what your evil I don't care what it is under deregulation I can get you. If you are honest about your evil it will be harder (but not impossible!) to sell it.
Deregulation also allows the "small guy" a better chance because to compete, and so with more choice the customer is likely to be more aware of choice.
Again, the above is not complete. There are big holes in this as well. Fundamentally there are always a subset of people who are willing to do evil to get ahead, if they can do their evil while being in the letter of the law they will. Society needs a way to deal with it, and nothing is perfect.
> It is similarly impossible to predict the consequences of deregulation ahead of time yet proponents of deregulation are never held to the total unpredictability of the outcomes of their position.
What's an example of this? The deregulation of airlines? The repeal of Glass-Steagall? I've read a lot of bad takes about the latter's supposed outcomes, but none of them claimed that the outcome was unpredictable.
>The repeal of Glass-Steagall? I've read a lot of bad takes about the latter's supposed outcomes, but none of them claimed that the outcome was unpredictable.
It depends on what you mean by 'outcome.' If by outcome you mean that with GLBA/Glass-Steagall repeal banks began investing in the products they had previously been barred from then sure that was predictable. If we mean second order effects like it's possible contribution to the financial crisis then I'd say that was definitely unpredictable considering economists still can't agree on whether GLBA played a role or not.
Not sure... just seems to be a reality.
Maybe writing regulations is hard. Have you tried it?
That deregulation already happened a month or two ago. But it's bullshit because the banks were awful before Dodd Frank too.
What Obama should have done during the crisis is nationalize the failing big banks instead of bailing them out and then broken them down into a hundred little banks and sold them off.
The Emergency Economic Stabilization Act was enacted October 3, 2008, a month and a day before the election and nearly four months before Obama was inaugurated as President. While both McCain and Obama voted in favor of the act, and issued a joint statement in favor of the action as Presidential candidates, that part of the crisis was over and done with before he took office.
I remember a thing on Frontline about the banking crisis where they described a meeting with Obama and the bankers where the bankers were pretty much ready for big concessions. Obama instead didn't do anything and let that opportunity go. He did the same when the Obamacare negotiations were going on. Instead of kicking some of his colleagues in the rear he was pretty weak and got weak results. I think he learned from these lessons and became much more assertive over time. It seems most presidents do better in their second term once they have learned the job.
> What Obama should have done during the crisis
George W. Bush presided over the crisis, despite what conservative media pundits would have you believe. It's amazing how this has been largely ret-conned for half the US population. We live in, uh, interesting times.
I suppose you just consider it collateral damage that big banks will act just as irresponsibly as before when they are deregulated? The whole premise that deregulation is the answer is always that the regulation isn't accomplishing anything useful, but if it really weren't accomplishing anything useful you would think the big banks themselves wouldn't be so eager to get rid of it.
I was commenting on the lack of competition. Deregulating with the aim of making the barriers to entry into the marketplace smaller. Not deregulation to allow big banks to get away with more...
Also, I would guess with more competition from smaller banks, megabanks might actually act more responsibly.
[EDIT] but you are kind of proving my point, so thanks! I said "deregulation" so your mind is already made up on the point.
On the contrary, deregulation (of banks and otherwise) is all the rage, and has been for some time (as another commentator noted, many 2008-era regulations are already being repealed). What I don't understand is how the deregulation is going to only improve things for small businesses, not allow large ones to be even more ruthlessly exploitative. Especially since the trend in many other industries (that aren't nearly as tightly regulated as banks) has been for large companies to absorb smaller ones.
The deregulation we've seen is deregulation being pushed by people with ties to big banks. Not all regulation (or deregulation) is created equally...
Different banks have different levels of service. Often times a local, non-national branded, bank will have the services and service you might expect from your banker. Of course if they get to successful they get sucked into a bigger non-service oriented bank.
Wells Fargo seems to be particularly bad about things. I had a 'lifetime free checking account' with a local bank that ended up getting bought by Wells Fargo. About 3 years in to having my Checking there they tried to charge me a fee for it. I pointed out it was 'lifetime free' and they agreed to honor that when they bought the previous bank. They acquiesced and for the next year it was free. Then the fees started up again. Another call, another mea culpa, and quiet. Then the fees started up again. At that point I severed my banking relationship with them. (which I suppose is what they wanted)
Agreed. I changed over to a local credit union from Bank of America a few years back. Their online banking is a bit more awkward, but I can always talk with an informed person, which more than makes up for it.
My theory is that banks started out personal, but as they have consolidated have become ever more industrial in their scale and processes. Unfortunately, industrial-style human interaction is pretty awful.
I think the massive restructuring will come as banks split tasks into a) fully automating the boring things, and b) creating really good tools that empower their front-line workers (instead of treating them as dumb peripherals).
If our current major banks all went the way of Blockbuster during that process, I'll shed no tears. Few will, I imagine.
I only know horror stories from Wells Fargo. My only experience was wanting to break a $100 bill. I went up to the teller and asked for change, and they could not break the bill for a non-customer. Mind blown. I just walked next door to the grocery and bought a $1 thing of gum.
My favorite terrible story was a founder I know. His company just got funded and he got is first paycheck in a while, and he deposited it his Wells account. Well, he had a second account that was requiring payment, so they drained his primary account to level out the other account without telling him. He found out when his wife called him saying she was unable to buy groceries. Oh, and this was Christmas.
I had the same experience as you with Bank of America (come on, you're a bank. This degree of shitty service does not entice me into wanting to become a customer).
Even my credit union can be a pain in the ass. I had a check made out to my wife that needed to be deposited immediately. She signed it over to me and I took it to the CU. She wasn't on that account so they wouldn't deposit it without her being there. I went right outside and forced it through the ATM, which didn't make such stupid demands.
Your second story is a textbook example of why you should never open credit/loan accounts with a bank if you already have checking/savings there. You lose all leverage in negotiating debts, since they'll just take what they feel is owed when they get fed up with your delinquency. Wells Fargo did that to me, but I've seen that right reserved at more banks than just them.
HN meta-analysis: You will see mostly anecdotal evidence here that facilitates confirmation bias. Whatever you think of the subject at hand, threads like this mainly serve to let people vent more than offering actual insight.
(FWIW I have anecdotal evidence that both my local Wells Fargo and another big bank branch seemed to be stepping up service quality in response to the scandal. But again, that's not actually worth anything apart from demonstrating that anecdotes are insufficient.)
yay! i hope more people come to this kind of realization that small banks & credit unions are soooo much better--better service, better rates, better products, more forgiving about penalties and fees, and so much better at treating you like a real live human.
wells, chase, citi, BofA & the other big banks should be broken up into 100s of regional banks. lack of dignity and respect for customers follows from "too big to fail" (not to mention wasting trillions of our dollars without any punishment).
In the UK, there's this odd thing where some big high street banks have sub-brands that use the same core bank, but have their own customer service, online banking, etc. The Co-Operative has Smile, HSBC has First Direct. And these sub-brands generally have fantastic customer service!
Why? Why not just have great customer service for the main bank?
These sub-brands aren't, AFAIK, aimed at better-off customers who are worth more (there are examples of that too - Santander has Cater Allen), so it's not like there's some greater payoff to decent customer service.
They are phone and online only, without physical branches, so there are lower costs. Perhaps it's that?
besides the lower prices due to operational efficiency that you mention, it's probably about having a different marketing mix (the 4 Ps--product, price, placement and promotion) to attract a different cusotmer segment. many of their customers probably don't even know or care that the sub-brand is owned by a high street bank. the sub-brand might also be part of a strategy to funnel younger, new customers into the fold.
i'd say the main reason the main banks don't have good customer service is that they simply don't have to, and the actors therein have selfish aims. the fiefdoms of the large organization will typically divert resources to themselves (increase revenue, decrease operational expenses, and increase managerial compensation/headcount). consumer inertia allows this to happen (which is why i advocate moving away from big banks to promote competition and better service).
My impression was that most credit unions and small banks had pretty limited online banking, headaches with ATMs (not that I use them as much these days), etc. They are too small develop those services in-house, so I imagine they buy them as SaaS? Are they good enough now? I have Wells accounts I'd be happy to jettison...
yes, it's not the sexiest online banking, but you can do everything you need to do, including setting up automated bill pay. my credit union has an app that allows me to do mobile deposit as well, so i almost never need to go to a branch. the credit card i also have with them shows basic account info, but uses a connected (i.e., single sign-on), but separate, website for setting up autopay and other services.
for getting cash, most credit unions are part of the co-op network for atms: https://co-opcreditunions.org/locator/ so you have similar availability to a major bank (but admittedly a little more obscured).
You're right that traditionally credit unions and community banks have used antiquated consumer facing tech (online banking, mobile banking, loan applications, online account opening, etc) owned by 1 of 3 OG financial technology companies in the U.S.: Fiserv, FIS, and Jack Henry. They are all multi-billion dollar public companies that have formed primarily via acquisitions.
I started a company to challenge the incumbents after running a credit union as CTO.
yes, i've indirectly dealt with both fiserv and jack henry on past consulting projects and they're definitely slow-moving dinosaurs. =)
Yeah. I already had an account with Charles Schwab (based in San Francisco), and I set up a roth IRA for this year in about 5 minutes by myself, online.
So it's not that financial institutions can't be good at this, it's that the big banks fundamentally don't care about customers who aren't wealthy or institutional in nature.
But there are definitely alternatives like credit unions, online banks, and brokerage firms with banking services. Not that everyone of these is good, but you have options, especially if you live in a city, like most people on HN probably do.
Quit big banks. Join a credit union, tell your friends about it. Encourage your employer to switch banks too, if you are in a position to do so.
Schwab is huge, so I'm skeptical that your good experience with them supports the thesis that you stated.
It's a brokerage firm with some banking features. Brokerage firms understand that investors have options on where to take their money, whereas banks like Wells Fargo often seem to forget that.
If only more people did what you did, take your money to the local bank or credit union. If they don't have any more customers they can't pull these shenanigans.
I've been with a credit union (ESL) for 5 years now and they are amazing.
Chase seems to have moved their "hands on" banking to their "Private Bankers" (who you qualify for if you have some minimum amount of money or debt across your accounts).
Yes, I am a Chase Private Client and, to be honest, it's awesome. I call and a friendly human answers immediately.
But beyond that, I think Chase does a pretty good job overall with in-branch customer service. Their online/mobile banking is great. They're the best big bank by far IMO.
In-branch customer service has gotten super annoying in the last 3 or 4 years. I walk in to do something simple, there's like 8 bankers standing around in suits, doing nothing, and one of them rushes up to me like I just made their day and starts enthusiastically helping me with my simple thing... it's better than a long line and a disinterest in doing their job, but god damn it's creepy.
The illusion here is that it ever was different. A new bank, a small bank, a new office in your location with strong competition, that's the short term situations where you get real service. A well established bank won't even try to hide that they are just screwing you, because it costs too big a share of the money they screw out of you.
A few months (or maybe years?) ago here on HN I read a nice small article about that you always get screwed, not just with banks. Everywhere! The question is how, how much, and what for. Try to get screwed for a good reason, and if not possible at least for the smallest possible amount.
Not in the article but my experience so far: Try not get mad at the getting screwed part because it can't be avoided. And try not to imagine a fantasy world in which the screwing never happened before.
Monopoly control, or near-monopoly-control, of many markets is hurting consumers and average citizens at the expense of a small number of CEOs.
Some good thinking on this: In context of amazon https://newrepublic.com/article/119769/amazons-monopoly-must... In context of tech firms, Google, Facebook http://www.slate.com/articles/technology/interrogation/2017/...
Read "The Used Car Salesman Defense" section in this issue of Matt Levine's "Money Stuff": https://www.bloomberg.com/view/articles/2018-03-20/explainin...
It boils down to this: "Banks are always trying to get customers to think of them as trusted agents, while reserving the right to act as rapacious counterparties."
I like Matt Levine because his "I was on the inside" voice is pragmatic and straightforward, and often makes me stop and say, "Huh."
Sounds bad, but you should see some Citibank branches -- they dont even make the call for you nor do you get a place to sit down -- I was trying to resolve an issue and the representative literally took me to an in-bank phone booth, dialed the number and handed the phone to me. Basically -- deal with call-center-hell while standing up. What's the point?
The good news is that this behavior is not universal, I looked around and there are banks with great customer service (in my case, i found ChaseManhattan to be superb, though it may be due to my "tier" and how much money i keep with them.)
On the topic of "tiers," I have found that with Citibank, when my credit card has a small balance, I get really good phone support. If my card has a medium balance (say, $2,000 to $9,000), I get shoved off to a third-world call center. But when my balance climbs over $20,000, I get the good service again.
Yes, my balance fluctuates wildly month-to-month. Travel.
Whats your "tier" and how much money do you keep with them?
Please reply with mothers maiden name, SSN and DOB.
Semi-related: If you have any entities (power company, cell phone provider, etc..) setup to directly pull their payments from your account, these can cause the account to re-open, and then overdraft. Be careful.
That sounds very unethical.
Its how banks work I guess? I think the agreement that you enter when you allow direct EFT states something to that effect. It's a crock of shit.
We are still talking about Wells Fargo, right? In my experience with them, I would say the adjective 'unethical' is hilariously redundant.
Same EXACT thing with Sprint, however at the oligopoly Sprint, you have little choice.
This appears to happen with any proto-monopolistic entity. The problem is, unlike government protected 'businesses' like cell phone and cable companies, there is no monopoly in the Banking sector.
So, WHY, why are people still drawn to the lowest common denominator big banks for their accounts? It makes not sense.
I'm leaving this month from my own big bank, after their "FREE" online banking as long as you don't bother us, e-checking account, went from free to $12 a month.
In principle this makes sense, but I've had pretty negative experiences dealing with community banks, where the tellers weren't any better, but there wasn't an 800 line for them to go to.
Thanks for sharing.
>These huge banks have simply become way too big, and it serves no one's interest but their own. They have zero incentive to provide actual customer service anymore. There needs to be a massive restructuring of our system to allow smaller banks to thrive and provide actual competition.
Thats not the plan though. Now that they have IMF'd almost the whole world, they have no one elses pie to take from... so they are turning inwards. In order to do this, they are murdering and executing [1](American Psycho reference, but lots of literal truth there too) their way to the top, but not just in banking... in all industries. (bayer-monsanto being a good example).
What we need is anti-trust/anti-monopoly laws to actually be enforced... oh wait... the same bankers that need regulating basically own congress and many more. I'll never forget looking up my podunk Texas congressmans public financing and wonder why so many NY banks were donating to him. Until we find a way to start fixing congress (the closest to the people of the 3 branches) this will just happen again and again.
[1]https://llwproductions.files.wordpress.com/2011/11/big-banks...
Personally, after hunting terrorists for the government in my youth, I've come to the conclusion that bankers are the real terrorists. Financial terrorists.
Looking at that chart...unremarked is the 1991 $1.9 billion merger of Manufacturers Hanover with Chemical...it's more a commentary on the reality than the chart, a $1.9 billion bank merger doesn't make the cut as being important enough in the current post-Glass–Steagall "too big to fail" TARP banks...I interviewed for an IT role with the old Manny Hanny group within Chase Manhattan bank in the late 1990s...they were a bank buried within a larger bank, and soon to merge with JP Morgan and a host of other banks.
Yeah quite a lot of people don't understand the power of holding or just "financial services" companies in todays economy. They are quiet giants in most respects. For example, in the "147-corporations who rule the world paper"[1] I noticed number 13 was Franklin Resources Inc. Never heard of them, but apparently as a holding company they are one of the most powerful in the world... with many more like them.
[1]https://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf
Having worked in "big banks", I can say that there is a complete disconnect on the top. These people (on the top) sit on an ivory tower, think that they will bark orders and the slaves will obey. They become so big and slow-moving, that only by insane cost-cutting (at the expense of real customer service) keeps them viable, and keeps the shareholders happy.
The disconnect from the ground (and being surrounded by cronies and yes-men/women who keep them blind and stupid) causes the poor service.
> "big banks"
Is it (even) worse in banking, or is this just something that happens to all companies above a certain size? I can totally see it being the case that a more heavily regulated industry suffers more, but that's pure conjecture.
I agree with your experience, same in Bank of America. I walked in to report fraud, a teller gets on the phone and call someone on the same number as I would from the back of my card.
Bank of America is a master at minimizing cost - they are introducing vATMs - virtual assistant ATM - its a regular ATM but with two-way camera so you talk with banker that is obviously located somewhere else. Just 2 months ago someone was helping me with perfect English and she said shes in Texas. Just few days ago, same location I connect and there is a guy in turban around his head, with broken English and clock on the wall I can see pointing 3am (it was around 2pm EST). So there you have it. I bet within 2 years they will complete transition and 99% of branches will have those vATMs at the cost of 70% savings in location, wages, etc.
I am slowly shifting to smaller bank though where people know me by name, I deal with same people who help me without using phone and sometimes even computer. So far BB&T and First Republic are very good choices.
Mandatory: 37 banks become just 4
https://www.visualnews.com/2016/01/25/37-banks-became-4-bank...
When you go to any major metropolitan city in the United States, the downtown area will typically have several large skyscrapers. Take a look some time and note how many can be included in one of these 3 categories - banks, health "care", or financial services. Our priorities as a nation are fucked and the big banks are just a giant reminder to everyone. The fact that these companies are so huge and making so much money is ridiculous.
I've been banking with First Republic now for over a decade and the service has been nothing short of spectacular.
People I know are shocked when I tell them I enjoy going to the bank - I've never waited for more than 10 seconds to be helped, and they have done everything I asked within minutes.
And, not for nothing, they are constantly baking delicious chocolate chip cookies, too. More than once I have stopped at the bank for no reason just to get another cookie.
I once took out $25,000 from my WF account and asked for it in a cashiers check. I paid the $5 fee for the check (even though they had stated that it would be free) - then I took my money....
I came back ~1month later to re-deposit the check into SAME WF acct.
They stated that they had to put a hold on the check for 14 days until they could verify the funds. For a WF issued cashiers check. From the SAME act the funds came out of.
I changed banks that day.
It is easy to forge a cashiers check. Even if it is real, it is possible to erase the name on it and put something else on. Or you could have a fake id that makes it seem like you are really the person who it was written to. Those are just the types of fraud that come to mind immediately, those who work in banks probably know of more.
Worked in a bank when I was younger (Not WF). Was fairly trivial for us to confirm that the cashiers check was actually issued by us. It shouldn't have been held longer than a day at most, particularly not for a client.
Leaving aside that it's your money and yours to do with as you wish...
Out of curiosity, if you care to disclose, what was your reasoning behind this?
If I'm a bank, I can see a couple of red flags with this (maybe some obscure kiting, or similar), "take five digit sum from account, in a check made out to self - then one month later deposit same uncashed check into originating account"... and "verifying the funds" is not verifying availability, but 'minimizing possibility of sketchiness'.
I was going through a divorce and needed the funds secured until I could deal with legal issues to ensure that they would be available
I wonder if all these small banks have to re-invent the SaaS wheel, or if there is a company out there providing a banking platform to them...
First Tech in the Pacific Northwest used to invent their own wheel, and it was great. Usable UI, 2FA; I had no complaints. Then they switched to what I assume is some pre-packaged SaaS. It's awful. Not even an attempt at MFA, just UID/PWD and off you go. UI sucks. Stuff doesn't work if you don't allow popups, but doesn't fail in such a way as to make root cause obvious ("here's an obscure error message with a string of hex numbers..."). I wish they'd go back to what they had.
There are a healthy assortment of fintech offerings for banking clustered in Austin and on the West Coast, maybe more.
Check out Q2 and Malauzai in Austin (there are are several, these are just the two I have evaluated) for a stack that is agnostic of the core system and provides almost all banking functions across channels.
This kind of thing isn't cheap though, and bank boards are notoriously conservative when it comes to innovation, especially for small banks.
Specifically, how do you even migrate a bank to a new platform?
One such is Jack Henry. I just interviewed with them (but didn't get the job, which is too bad as I really wanted to work there). They offer everything you need to start a bank or credit union, at a couple of different complexity levels.
There are definitely vendors for at least some of the backend and web services a starting bank will need. I've forgotten any of the names I've heard, though.
> There needs to be a massive restructuring of our system to allow smaller banks to thrive and provide actual competition.
Hmm... does there really need to be any restructuring though? It sounds like you "opened up an account next door at a small local bank" without any problem, so the choices are there, and your choices in banking really aren't that limited.
Your frustration with bigger banks seems to be related to the fact that as banks become bigger, their clientele also tends to be represented by more and more corporations and high net worth individuals. Those clients undoubtedly contribute a larger percentage to the bank's bottom line, so their focus naturally shifts to serving those types more than the average person with a personal checking account.
Just because McDonalds is the easy choice, that doesn't mean it's the only choice. McDonalds' existence (or that of the big banks) doesn't mean the system is broken - only that our collective preferences probably need to change.
I use Wells Fargo for one purpose: obtaining foreign currency. I keep my actual money in savings and checking accounts with Ally, and the minimum $300 in my Wells Fargo 0.01% APY (lol) savings account (so they don't charge me $5/month fees).
In exchange for this, if I'm traveling out of the country and don't want to rely solely on ATMs and credit cards, I first transfer some money into my WF account, and then I can go to the bank and pick up some, say, Canadian dollars, only paying the exchange rate (which last time I did this was equivalent to the rate on ATMs and credit cards). If it's not CAD/Euros/Pesos, I just call and they can order it for me.
When I was a teenager, my WF account was my main account, and every single time I went into the bank they tried to sign me up for a checking account. Wasn't surprised one bit when the scandal hit. (Fortunately, they never created any accounts for me.)
>I'm traveling out of the country and don't want to rely solely on ATMs and credit cards
Ummm... Why not? There's plenty of accounts that refund ATM fees. I don't want to have to stop at the bank on my way out and i especially don't want to carry around more than $60 in cash. Especially in a foreign country!
Replace "bank" by "silicon valley company" and you can pretty much make the same critics.
Agreed. I rely mostly on my credit union for financial matters and eschew large banks whenever possible. The service I get at my credit union and a local bank (that I won't name for obvious reasons) is light-years ahead of what I have received in the past from larger institutions.
The _only_ benefit of a large bank like Wells Fargo is that they're nearly everywhere, and I can deposit or withdraw money from any branch without paying a fee.
They do not offer any other service or product that comes close to competing with my local credit union (or even most small banks).
If your credit union has shared branching, they're everywhere too.
https://co-opcreditunions.org/locator/
Shared branching on credit unions is awesome.
In the absence of a quality local bank or credit union, I can't speak highly enough about e-banking at places like Fidelity or Schwab. They're huge banks but you can open new accounts online in no time. You can use literally any ATM in the country and they'll pay whatever fees you are charged. No minimum balance, bill pay, basically every feature you should be able to expect from a bank these days.
The ONLY downside I've thought of, even though I haven't encountered it yet, is if you need to get a lot of cash you might have to jump through hoops. But you can get at least $200 from most ATMs so that's only a problem if you're going to pay cash for a car or something.
That's any ATM in the world, not just country.
I always have a local bank just for the one time you need to go to a branch for something dumb once every ~5 years.
Wells Fargo and BofA have earned a negative reputation for "the big banks," but in my experience, Chase and Citi are perfectly fine ACH + ATM utilities. (YMMV if you aren't the kind of customer they want, i.e. playing close to $0 or making weird high-volume transfers).
Regardless of customer service concerns, the rates on other financial services are simply more favorable at specialist firms. American Express for rewards credit cards, Vanguard for investment, Marcus or Ally for cash savings, etc. A local bank or credit union with impeccable customer service around a full suite of services is still probably not worth the money you're leaving on the table.
You just compared Apples and Oranges. First Republic is typically for the higher-earning, higher net-worth individual, whereas Wells Fargo caters to a much broader set.
Not to say that Wells Fargo should not provide better service, but I just want to point out that these are two different types of banks.
I had a similar experience with Bank of America. The person who was supposed to help me was rude, untrained, and actually caused a lot of problems without addressing my original request (close my account); I later got help from a higher-up (actually trained) who did provide a modicum of service. I had a much better experience at a Credit Union.
First Republic really isn't any different than Wells Fargo. They talk a big game about personal service but it's the same bullshit. (Speaking from firsthand experience of moving from WF to FRB.) You'll talk to a different person every time you go in, their website isn't great (though the recent upgrade has helped), and their mortgage products require absurdly high down payments (20-30%) to be rate competitive with WF/Citi/Chase (as of 2017/Q4). They also have absurdly high minimums for many accounts (3-4k), though they do have nice features like fee-free out-of-network ATM use.
I really want to believe there's something better. But I think the real choice is between "local bank" -- shitty website, hard-to-use ATMs that require putting checks in envelopes, bad hours OR a big national bank, where you're a number, but the software is good, there are branches everywhere, they have a good mobile app/good ATMs, etc.
My personal philosophy has become, "I'm ok being a number because I'm pretty average personally, but I want a local bank for business banking." It's worked so far.
> I really want to believe there's something better. But I think the real choice is between "local bank" -- shitty website, hard-to-use ATMs that require putting checks in envelopes, bad hours OR a big national bank, where you're a number, but the software is good, there are branches everywhere, they have a good mobile app/good ATMs, etc.
My relatively large regional credit union has all the advantages you list for a big bank except branches everywhere when traveling, especially good ATMs and mobile app. And doesn't have the “your just a number” problem.
> You just compared Apples and Oranges. First Republic is typically for the higher-earning, higher net-worth individual, whereas Wells Fargo caters to a much broader set.
Okay, so pick any other bank which serves the entire community — whether it's a small credit union, a smaller regional bank, or a larger one which isn't BofA (I use TD Bank). The service will still be worlds better and they won't periodically require massive fraud prosecutions. It has nothing to do with the customers and everything to do with the corporate culture.
My point was only about the type of service you can expect at a bank of this type. Therefore, I gave another anecdote (my experience at a comparable bank, and another at a smaller/different type of bank).
I agree that the culture at Wells Fargo appears to have been one of rapacious greed. What I do not understand is how the previous CEO and his underling (the woman who retired) were not hauled before a judge on a range of criminal charges. Maybe CFPB does not have prosecuting power, but surely they can refer to DoJ for prosecution?
In Sweden bank provide two forms of services. All digital services which is what they are strongly pushing for, and ATM machines where customers withdraws (with a max of $1500 per week) and store owners can deposits in a few special machines in the "large" cities. Practically no office deal with cash and the few remaining is purely for consultations.
Through all this digitization and cost savings the numbers of banks has gone down. From a infrastructure perspective it has never been as cheap and easy to start up a bank, and yet what we see is the opposite. Now why do we not see new competition in banking?
Probably because the massive amount of regulations that have been added in the last century means starting with nothing is a massive undertaking if you aim at providing a full service bank. Startups are popping up, but usually they only do one thing. And a limited set of that one service at that.
Is that a US thing? Here, all the customer-having banks have all their services available through the app, with very quick and helpful support through chat. I didn't even had to come to their office to open an account – they delivered the card together with the documents I had to sign. This industry has been radically transformed in the last few years, just as taxis. I thought it happened everywhere, especially in US.
How you described is how it works in the US too. I have opened up dozens of accounts at banks and it's always been that easy - never had to go to a branch or anything. Closing the account is usually very easy as well.
The reason I open and close so many accounts is churning the sign up bonuses.
I had very similar experience at one of the large banks, no one cared about helping me, everyone just directed me to go online on their website to call the 1-800 number. What's the point of Physical Banking Centers anymore. Not the mention the horrendous wait for the customer care to answer the phone when called.
Agreed. Scarily, a lot of consultants and industry watchers foresee the healthcare industry going through the same wave of consolidation that banks did in the 1980s and 1990s -- they even use it as a metaphor for what they think will happen. I think that's something to worry about
The cost of employing and training people who are able to do those tasks at each location might not be make up for the revenue they bring in.
Online systems let you weed out those who are going to cost you in terms of labor hours, so you can trim the 20% of customers who take up 80% of the resources.
Have you been following the royal commission into banking that the current Australian government was dragged into, kicking and screaming all the way?
The system around the world needs to be bleached clean by some harsh sunlight and broken apart so these messed up incentives are untangled.
I got an email recently from WF about the issue with them opening accounts in customer's names without them knowing. The email said something to the effect of contact them if I think an account was opened that I didn't authorize.
Why the heck is the burden on ME to go look?
How can they determine if the form they have with your signature on it is fraudulent or not?
First Republic is awesome - I know several other founders who use them for their business banking.
I have a feeling First Republic tends to care about consumer banking at this point because it's just not a big bank yet. But how much customer service do you need, anyway? I step foot in an actual bank maybe once a year, if that.
Genuine question.. why doesnt everyone just go and create a credit union account.
Agreed. The only reason I have an account with a large bank (BofA) is for safe deposit box. Otherwise I use a local bank (Cambridge Savings Bank, MA) and have been very happy with their services.
I mean I don’t think they care about consumer banking. They care about banking with businesses and institutions. The personal checking accounts are basically marketing toward that end.
I gave up on Wells Fargo over 15 years ago and have never regretted it for a moment. Small credit unions are just fine. I'll never again use a big bank.
That's the promise of a lot of FinTech.
Building out services that are digital first so that the quality of service provided is actually scalable.
I opened an account with a local credit union after years of using Wells Fargo and the difference in service was stark.
This sounds like huge tech companies as well
I've heard it said that people change their spouses more often than they do their banks.
Similar experience trying to send international wire. Totally clueless.
Very strongly agreed.
It seems like whenever you go to a bank, it's simply a time for them to try to sell you on credit lines and new accounts. Everything is handled in big offices and super dysfunctional.
Amen.
yes I walked into a branch the other day to open a business account. The staff sat me in a room and tele-conferenced me to some other branch to go through the process of opening an account with someone-off site.
I've interacted a lot with the larger banks and been flabbergasted at how they view the world.
Banks, big and small, regard the consumer operations of the bank as a cost center, which they should do as little as possible to maintain. In fact - I believe the only reason that they even have public facing consumer branches is largely to get access to capital as cheaply as possible. Every proposed improvement to the consumer experience is viewed in the light of "how is this going to make the bank more money." If a direct line from improving the customer experience to make more money can't be drawn, the bank won't do it.
Long gone are the days where banks provided a core function to the vast majority of society. They just exist to enrich themselves.
> In fact - I believe the only reason that they even have public facing consumer branches is largely to get access to capital as cheaply as possible
I would agree with this. Banks nowadays– maybe not local independent banks or credit unions– leverage your money to purchase investment vehicles on better credit for their higher-profile clientele, and also as liquid capital to dispense as needed.
> If a direct line from improving the customer experience to make more money can't be drawn, the bank won't do it.
Yep. I have an account at a sizable bank, and their mobile app has been broken the half dozen times I've used it, across as many months.
It's the 21st century and a bank cannot figure out how to finance a proper mobile management application.
To be honest, the same could be said about some Silicon Valley tech companies as well…
Wasn't this the part of the point of Glass-Steagall? (I don't know much about it, so asking sincerely.)
The government should've instead created a "fine" where they receive something like half of Wells Fargo's profits for the next ten years or so. Then cap executive compensation for the duration. Then force every board member to resign and have a regulator on the board. All for the next decade. These one-and-done fines that are paid by shareholders instead of management, even large ones, do nothing...do something with lasting consequences if you want to punish, modify behavior, and put the fear of god into others considering cheating.
Your plan is to loop the government/regulators into the scam? What exactly is that incentivizing and how does that improve things for the average bank customer?
The executives responsible (principally Carrie Tolstedt and John Stumpf) not only did not go to jail, they ended up money ahead to the tune of 8-9 figures, even after clawbacks.
So if you're an executive, you know what to do...
And if you're a shareholder, is a billion dollar fine compared against 88.4 billion in 2017 revenue sufficient to sustain your motivation in an endless fight against the backscratching director and executive culture?
You think that even in this day and age, anytime you're getting hit with a billion dollars in fines, you'd sit up and pay attention.
I'm not saying WF (or more importantly, their shareholders) actually cares. But you'd think that they would at that level.
A billion ain't enough.
I don't have faith in Wells Fargo ownership or leadership to ensure ethical or even legal behavior in the absence of sufficient incentives. The market as currently set up encourages large scale misbehavior and destructive abuse by Wells Fargo of its customers. The stockholders are insulated by distance from the misery their company causes, and the executives outright make out like bandits, even when they get caught.
This is ultimately a problem which can only be solved by voters and their representatives inflicting meaningful punishment.
My parents opened an account for me with a bank when I was ~6 years old in 1988 that was swallowed up by Wells Fargo in the early naughts, which I maintained until about 6 years ago. At around the time I withdrew all my money and moved it to a local CU, I was going through financial hardships, and frequently would have less than a hundred dollars to my name. I never had any problems with them until then, when they would seem to hold up smaller debits as pending, even if a deposit was made which was also held as pending, until a larger debit was made and they were able to shift the order of transactions to maximize overdraft fees.
For example, $50 balance, $25 debit, $20 debit, $100 deposit, $80 debit resulting in a logical balance of $25 would be shifted to clear as a $50 balance, $80 debit (+$30 fee), $25 debit (+$30 fee), $20 debit (+$30 fee), $100 deposit leaving a balance of -$65 and a daily fee until I could find more cash to deposit and not use my debit card.
These transactions could happen over multiple business days, which made zero sense. Even now that I have a more stable job and a comfortable pillow of cash to fall back on, my CU seems to want to dictate where that money should go, instead of me shifting it around. Just this week, I went into a branch to withdraw some cash where the teller asked if I wanted to shift some savings into a money market account, which I agreed to, but said I didn't have much time that day to discuss it. Before I could go next door and get lunch, he had moved the money and zeroed out the account, which (despite being a saving account, is where my debit purchases get withdrawn from), managed to get me two overdraft fees when I bought lunch.
I'm seriously considering purchasing another mattress to store my money. In this day and age, there is no such thing as a bank. They are all financial institutions.
And it is for reasons like you mentioned that I discourage everyone I know from using debit cards for anything.
I only use credit cards for purchases, and I control when the money moves around. And I always pay the balance every month.
I heard this discussed in NPR as a reasonable fine because “it hit their profits but they still made money that quarter” and “the CEO steppe down”.
How is that enough when so many people had their life totally screwed? It should decimate their profits and high ups should serve federal time.
Id executives don’t fear the government over something so egregious were opening the door to more of the same.
disgusting.
conclusion: Bankers are above the law.
They should be in jail, along with the CEO. This isn't just white collar crime. This was blatant, premeditated, financial fraud. Directed from the very top to every single Wells Fargo office.
How is the public so stupid and uneducated, as to not be outraged?
All this does, is help to motivate the next generation of sociopaths. Zero consequences.
> This was blatant, premeditated, financial fraud. Directed from the very top to every single Wells Fargo office.
Oh no! No it wasn't! They never directed their employees to do anything illegal or unethical in hitting those unrealistic account targets, and the fact that hundreds (or more) tellers to do so the very same way is entirely coincidence and not the executives' fault! /s
But....but..we got Martin Shkreli in jail! /s
I had high hopes for Bank Simple some time ago when they came out. Then they got acquired by a bigger bank. This industry is nearly impossible to disrupt. Just like the Oil companies back in the day, these banks are so big and powerful that it's impossible to innovate in the current market conditions.
Big Oil was broken up by anti trust legislation. It's possible this comes back around. Currently reading a biography on Brandeis who was one of the titans of anti-trust in the 30s and 40s. I'm hoping that kind of regulation comes back around.
How? The CFPB wasn't perfect, but like the ACA, many think that if legislation is not perfect, it should not be enacted. That's the entire basis of the Hastert rule, if the majority party isn't able to "secure" a majority of votes, then bills shouldn't be voted on.
Isn't that the point of voting?!? Why are our representatives pre-voting on bills to determine if they should even be argued, debated, amended and tried? I'm reminded of something one of my senators said last year about the Russia investigation (specifically the election interference, not "collusion"), in context of them not wanting to investigate because the facts were not known. THATS THE FKING POINT OF AN INVESTIGATION YOU DIPSH*T, TO FIND FACTS.
Everyone needs to vote this november. I don't care if you vote Republican, Democrat or any of the 3rd parties. Just vote. Get the old guys out. Disrupt their legacy. We (software developers) hate the Waterfall method. We like being Agile, whatever that means. Make our government operate the same way. Iterate in small, meaningful chunks.
Banks, Oil, social networks
Not sure how they calculate fines like these but it sure should work something like the following:
$100M + [(entire bank profit gained from illegal activity) * 7.0] + [(number of people screwed) * (average fees charged per person) * 2.0]
In addition, there should be a stipulation that the bank cannot (in present or future) pay the fee through employee layoffs or other cop-outs. Ideally, the government is able to require fine payments to come directly from executive compensation or by selling assets, etc.
My guess is it would come out to, let’s say, a hell of a lot more than this.
> Ideally, the government is able to require fine payments to come directly from executive compensation or by selling assets, etc.
Interestingly enough, DF allows the government to do this if the bank is considered "too big to fail", which is a classification they define precisely in the bill.
But not before that.
Where does the fine go? Does it get divvied up amongst the people affected by WF's wrongdoing?
Yes. Dodd-Frank, the act that created the CFPB, mandates that the fines are deposited into what's called the Consumer Financial Civil Penalty Fund[1].
Money in that fund can be used for only two purposes by law:
1) Compensating victims of the wrongdoing 2) General consumer education & financial literacy programs
The key here is that #1 takes priority by law; #2 only kicks in if the victims are unknown or in a few other edge cases that would make compensation difficult. Victim compensation must always come first. If that drains the fund, #2 never happens[2].
I agree with the others in this thread who have serious problems with regulatory agencies that "self-fund" by using fines to keep the lights on. CFPB doesn't do this -- it cannot do this, even if it wanted to -- and that's what makes it different.
You might remember the debate in Congress over this bill. I was younger then, but still distinctly remember opponents of DF calling for precisely this kind of model during hearings. They were against CFPB receiving operations funding, and frankly I'm glad they didn't prevail. Nobody's issuing excess fines just to keep their jobs for the next fiscal year or levying themselves raises, and consumers get their money back in full. It just seems so reasonable, doesn't it?
[1] https://www.consumerfinance.gov/about-us/payments-harmed-con...
[2] https://www.federalregister.gov/d/2013-10320/p-48
>I agree with the others in this thread who have serious problems with regulatory agencies that "self-fund" by using fines to keep the lights on. CFPB doesn't do this
So one of the agencies most likely to go after major corporations don't do this. But the police that go after the little people can? Seems... rigged.
I completely agree that's its the wrong way to do it no matter if you're a regulatory or law enforcement agency. If I had my way, they would all operate like the CFPB.
And this is why I don't understand the opponents who want to tear it down. I understand why some might disagree with the bureau for philosophical reasons, but if we're going to have it, let's do it right.
I don't know about this fine, but the vast majority of bank fines are usually "consumer relief." Banks usually are in a position to where the actual financial impact of the fine is a very small fraction of the headline number.
"Goldman Sachs buys a home loan at 50 percent off. It then modifies the mortgage for the borrower to perhaps 60 percent of face value. The modification gets referred to the overseer of the mortgage settlement, proving that Goldman did lower the cost for the homeowner. And as homeowners begin to make modified payments, the bank can resell the now-performing loans, or just take in the revenue stream. If this works, Goldman makes at least a 10 percent profit on the deal, while satisfying the consumer relief terms of the settlement."[1]
The above glosses over the notion of it working by saying "if it works," but for the most part, it does.
[1] https://finance.yahoo.com/news/goldman-sachs-wins-lose-mortg...
Good reference, too:
https://www.nytimes.com/2017/03/17/business/dealbook/mortgag...
That's interesting. Thanks for the resources. I wasn't aware of this.
it's a CFPD fine.. so it goes into their Civil Penalty Fund, and it's required to be used for victim compensation, and where that's not practical, the remaining funds are used for consumer education and financial literacy programs.
By law, those are the only things the CFPD can spend this money on.
Civil Penalty Fund Rule: https://www.consumerfinance.gov/about-us/payments-harmed-con...
> Does it get divvied up amongst the people affected by WF's wrongdoing?
Are you crazy? The fines usually get distributed around different politicians to spend on their favorite things. Like this https://www.usatoday.com/story/opinion/editorials/2014/07/14...
Which is why these fines will continue. Everyone hates the banks so the regulators can just keep fining them for everything indefinitely, when they run out of ideas they find some new problems with the 2008 mortgages again.
Was mostly a sarcastic question ;)
This pattern can be seen everywhere...
1) politicians regulate an industry with the best intentions
2) industry becomes a safe haven for "the big fish" that can pay to play
3) Rinse and repeat for a while, creating bigger and bigger barriers to entry into the marketplace. Politicians are happy, mega banks are happy.
4) Megabank inevitably does something reprehensible
5) politicians slap them with some fines. Fake remorse ensues...
6) go back to step 1
This a good analysis. It sums everything up without the bullshit.
The only thing I would correct in your "Financial Corruption Process Map" is the step after #3:
.
I would agree with these additions. This is basically the crony capitalism playbook.
Stop paying taxes.
Well, taxes go towards some stuff I appreciate... plus I would probably be thrown in jail. So not sure that is a solution :p
Conscientious objection to taxation should be a thing though.
It is: it's called "renouncing your citizenship and moving to Somalia". Go ahead!
Oh, you meant to say that you want to be able to object to taxation but still freeload on all the benefits. Sorry, no.
I object to most of the roughly 50% of my income that is taken from me and can't say I've ever been called a freeloader... That's an interesting point of view you have there; "either don't be a US citizen or never complain about tax policy".
"Conscientious objection" to taxes means you wouldn't pay taxes, it doesn't mean you just complain about it. You can't do that and stay a US Citizen and not go to jail.
I guess I just don't care enough to ruin my life over it. It's a pretty interesting thing to think about, actually. To think that a bloody revolution was sparked over much less than what we put up with today... It's almost like Stockholm Syndrome.
That revolution was fought because there was no representation in the body that levied the taxes. We do have representation in the body that levies taxes now.
Tell that to the people of Washington DC! (No voting congresspeople)
I recently read that if you live in puerto rico full time for a tax year, you don't have to pay federal income tax, or something like that.
Apparently a lot of bitcoin people are considering the move. Move there for a year, sell your bitcoin, move back or something like that?
New York has nothing to do with the CFPD. The CFPD's civil penalty fund is legally mandated to use all money for two things only: victim compensation, and consumer education and financial literacy programs.
The GAO has audited the CFPD, and verified the funds are being spent in accordance with the law.
NY State is not the federal government. This is like asking what the US's military is like and having someone describe the Illinois National Guard.
Long story short, this all going into the Civil Penalty Fund:
In accordance with the Dodd-Frank Act and the Bureau's Civil Penalty Fund rule, the Fund can only be used for two purposes: to compensate eligible harmed consumers and, to the extent that victim payments are not practicable, to provide funding for consumer education and financial literacy programs.
https://www.consumerfinance.gov/about-us/payments-harmed-con...
The situation you outline above is illegal under Dodd-Frank, the act that created the bureau.
Those who designed the agency were worried about precisely this kind of perverse incentive structure & required that it distribute all penalties back to consumers.
https://www.consumerfinance.gov/about-us/payments-harmed-con...
Was the fine expected to be much worse? They're trading up at the moment
It's not as much as the fine was expected to be worse, just that the situation is now resolved. WFC can put this behind them, and move on. AFAICR, this is the last of the scandals that have rocked the bank. As soon as the cap on their assets is lifted (likely before the end of the quarter), there's nothing left in the queue holding the price back. As such, the company will be able to take advantage of the higher interest rate environment we're moving into, and the stock (already undervalued compared to its peers) will benefit as a result.
Or, markets are irrational.
Take your pick.
Or probably the end of uncertainty about the investigation is itself a signal. (People who dropped it from their portfolios because they were risky now put it back.)
It's now a known quantity and if there is one thing Wall Street dislikes is surprises.
When a large fine is levied, there is only one question which actually matters: Did the company profit more than the fine from the illegal actions? If they did, then the fine will be written off as a 'cost of doing business' and nothing will change. It wouldn't make sense to do otherwise. When dealing with entities as large as Wells Fargo, they can often get away with anything as long as it is profitable enough. Since their personhood doesn't extend to the government actually being able to curtail their free movement or actions, and fines are the only way they can be censured, the fact that the public itself will balk at fines which are simply seen as "too large" can enable them to get away with anything.
This only hurt old Wells shareholders (stock is up nearly 2% today on this news). Meanwhile the Wells executives who clearly broke the law get off scot free.
Martin Shkreli instead get's the book thrown at him, assets seized, and sent to federal prison for much less.
He defrauded rich people. That can't be allowed.
He also gloated.
Someone pointed out to me once that the parable of the boy who cried wolf is a story where not only did he lie, he also laughed in their faces and mocked them for believing him. He gets eaten in the end.
Marketplace reported this morning that while WF was fined $1B, they apparently saved more than three times that amount due to the new tax law.
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-wells-...
http://www.latimes.com/business/la-fi-wells-fargo-earnings-2...
It's hard for me think of wellsfargo as an "evil" company, because every time I had to go into the branch, they have some of the nicest tellers and it's always a pleasant experience.
Maybe it's possible to be a good, friendly person, good employee, etc., and still work for an awful company. People need jobs
Nice people work for Walmart and Amazon who are both frequently cited as terrible employers. Terrible people also work at generally "good" companies as well.
Say it with me folks: Business aren't people. They're collections of people who run a a whole range of types.
(Obvious exceptions for 1-man shops/Freelancers)
I don't know how to say this without sounding condescending, but you basically just need to think harder or perhaps more critically. This is like saying you can't wrap your head around global warming because it's cold un your backyard or that you can't believe the earth is round because the ground in front of you seems so flat.
We must open our minds to larger concepts. This sort of small-mindedness is responsible for the worst part of the human condition.
They didn't write that they couldn't form the thought; just that it was hard.
You could try reading harder, or perhaps more carefully (and critically).
My mother opened my first bank account at HSBC a long time ago. Then the recession happened and their regional branches got bought out by First Niagara, the shittiest and most customer-service-time-deaf corporation I ever had the displeasure of dealing with. (And then we learned through the news that HSBC actively assisted drug money laundering in South America, woohoo) Fortunately they were then bought out by KeyBank, although now I just use a local credit union.
Throughout all of that, my local tellers and bank staff remained. They are probably the friendliest and most helpful bank staff I ever encountered. It’s a shame they had to go through all of that. Probably more irate customers than I had to deal with them.
> ... the shittiest and most customer-service-time-deaf corporation ... Fortunately they were then bought out by KeyBank, although now I just use a local credit union.
The same KeyBank who hit my account with $380+ in overdraft fees _in a single day_ when they decided after four years of seeing the same paycheck being deposited twice a month that it was "subject to hold"?
I have been a WF customer for many years and, to be fair, they have always done right by me. It used to be that my main complaint was they would ask me to sign up for a credit card every time I walked into a branch, but they've cut way back on that.
I am, of course, disgusted by their fraudulent actions, and have several times considered closing my accounts in protest. But now I'm thinking that I probably couldn't find a bank anywhere under closer and more intense scrutiny. For now at least, it seems they're on their best behavior.
> But now I'm thinking that I probably couldn't find a bank anywhere under closer and more intense scrutiny.
I thought that like 2 scandals ago... But they keep appearing on the news with more... Maybe they are not done airing out their dirty laundry.
I felt sorry for the branch manager at by local branch when I closed my account. She's a great person who really cares about her customers, unlike her employer.
I think this raises a fair point. How can we punish the employers and not the employees?
Maybe we should have jailed the executives or responsible party, so no one dares to pull that kind of shit again.
Part of my frustration with WF is that after I establish a relationship with the manager, they inevitably move him or her to a different store.
Critically, Well Fargo "submitted to an unprecedented order Friday that would give the Office of the Comptroller of the Currency the right to remove some of the lender’s executives or board members" [1]. TL; DR Senior management and even Board members can be fired by the OCC.
[1] https://www.bloomberg.com/news/articles/2018-04-20/wells-far...
Until people start going to jail for their illegal activity rather than just paying out nominal fines I wouldn't expect their behavior to change. This is at least the 3rd major fine Wells Fargo has paid in the last few years.
If only people remembered that the second half of the expression about "a few bad apples" is that they "spoil the bunch."
A fine isn't going to hurt Wells, especially when it's about two weeks worth of profit. If you want to teach a bank a lesson, you have to hit their business model. If after a fraud is uncovered regulators instituted restrictions to account openings instead of fines, you would see change. For example, if Wells wasn't allowed to open a new account - of any kind - for six months they would start to lose customers - and bankers - to institutions without restrictions. That would change the industry.
Gone are the days of Enron when the people responsible actually go to jail, it seems :(
There doesn't appear to be any reparations for the actual consumers.
Where exactly do the fines go? A class action lawsuit would have served more justice.
This depends, but generally in Federal regulatory action, to the US Treasury. Victim restituion is a separate issue.
https://www.alternet.org/economy/bank-fines-and-crime
Relative to a salary of $90k / year, $1 billion fine is roughly equivalent to a $1k fine.. or roughly a parking ticket in downtown SF.
Where are the proceeds of the fine going?
This "fine" should be returned to the American people and not used to fund obscure government programs
It is being returned to the victims as the law requires the CFPB to do.
WFC had net income of $5.9 billion in Q1 2018. A $1B fine is a joke that is being played on the rest of us.
It won't put them out put business, but I guarantee this is not a good look for them or their board, even internally.
I have no sympathy for them, fyi.
What would a bank need to do to get fined their annual net income?
Maybe its a stupid question... but what do these agencies do with so much fine money?
I dare you o steal a marsbar in the supermarket, three times please.
Does anybody have recommendations for good banks?
As a general best bet: local credit union.
Will they take out a 0% loan to pay that?
So the government gets to keep $1B collected from WF. What about the people who overpaid all those fees? Are they being refunded?
The CFPD is required to use all money from fines for victim compensation, and where that's not practical, they keep it to compensate future victims or they can spend it on consumer education and financial literacy programs.
They are not permitted to spend the money on anything else.
I got an email today about them settling a class action lawsuit that covers this.
https://wfsettlement.com
What a great start! Keep it up!
I'm commenting late on this and for the first time on HN ever, but the things that big banks can do and get away with are ridiculous. It simply doesn't matter what they do to their customers because they will always be bailed out and get their way. They don't have to care because it doesn't matter.
The woman who was sucked out of the window of that Southwest flight was a Wells Fargo VP.
What's really funny is this is a bank and the bank essentially printed that $1bn itself anyway because banks control the money supply.
Not enough.
Remember: This isn't the Trump administration. This results from the regulation that was put in place and the enforcement that was started before, and that his administration is busy trying to deconstruct.
Setting the political aspect aside, there seems to be a broader consensus that this "bankster" behavior is bad and needs to be reined in.
And investment depends upon a certain degree of stability as well as reliable financial and legal systems.
How this behavior is handled -- or not -- has more of an impact, down to start-up ventures and their environments, than people sometimes stop to think about.
The criminal bailouts of 2008 also wasn't the Trump administration.