Wells Fargo

Wells Fargo Finally Adds Mobile Payments to its Horrible iOS and Android Apps

Wells Fargo has finally added mobile deposits to its piss-poor app for iOS and Android.

On the one hand, this is awesome. Making deposits using the camera on your iPhone or Android phone is way more convenient than going to a branch — especially if you don’t have a branch nearby. On the other hand, practically every other bank in the country has been doing this for something like five years, and Wells Fargo’s mobile app is one of the worst I have used.

Still, the convenience is worth the hassle, if you aren’t willing to switch to a more tech-savvy bank. If you want to try it, get the apps here: iOS / Android.

Wells Fargo Fined $3.2 Million by New Orleans Bankruptcy Judge

Wells Fargo got in major trouble for applying payments first to fees, then to the principal of a mortgage. And because it pissed off a New Orleans bankruptcy judge by fighting the case for five years while the homeowner’s lawyers worked without pay. (From Bloomberg Law)

Phishing by Phone

Tonight, I received the following official-sounding message from “the Transaction Review Department of Wells Fargo Bank” asking me to “verify recent transactions on [my] credit Visa card.” While I do have a Wells Fargo business card, this message doesn’t sound quite right. First, I’ve never heard anyone refer to a “credit Visa card.” Second, as far as I can tell, Wells Fargo does not have a “Transaction Review Department.” Third, there are no unusual charges to my account—by me or anyone else.

I haven’t called the number, because I’m pretty sure this is a phishing attempt, and I’m not interested in giving the phisher in question any verification that it has the correct phone number.

It is just good enough that many people would probably respond. I’m quite certain those who respond will be asked for their account information, and would find their cards maxed shortly after.

Be on the lookout for scams like this. Don’t believe anything that doesn’t sound right, and don’t ever give out your account information over the phone.

Big Banks Jump on the Payday Loan Train

Payday lending traditionally happens in seedy storefronts, often in low-income neighborhoods and around military bases. Not any more! Eager to get in on the next big subprime lending bubble before it bursts, big banks are brushing up on their loan shark chops and opening payday lending divisions.

So what’s the problem, here? Well, payday loans from banks typically carry annual interest rates as high as 365%. That means if you took out a $10 loan, it would cost $46.50 to pay it back. It doesn’t feel so bad because payday loans are supposed to be short-terms loans, but the typical payday loan customer uses payday loans often enough that he or she is actually paying that kind of interest.

Banks are especially interested because they tend to hold the payday loan customer’s deposits, as well. Payday loan customers wind up paying more in overdraft fees, and are more likely to lose their bank accounts. In short, it’s bad news for consumers.

The Center for Responsible Lending is watching this trend, and has more information about big bank payday lending.

Wells Fargo and US Bank Are Payday Lenders, Other Big Banks Finance Payday Loans

The same banks that used to make—or finance—the subprime loans that sent the world economy into a nosedive are now making and financing payday loans. Now they just use TARP funds and cheap loans from the Fed.

Payday loans are still subprime loans, but the risk is built into the enormous interest rates, which average 455%. The mafia offers better interest rates. Actually, the mafia is probably just operating payday loan storefronts now. Wells Fargo in particular is knee-deep in payday loans. It directly finances a third of payday loan branches in the U.S.

In order to make those 455% loans, banks like Wells Fargo and US Bank are able to borrow money from the Federal Reserve at .5% or less. (Wait, does that mean they can really average a 454.5% profit, not counting defaults? Holy shit.)

(Video from Showdown in America.)

Another Take on the Coming Debit Card Fees

Adam Levitin’s analysis of the coming debit card fees from Bank of America and others is spot on, and it boils down to this: On the one hand, it’s an improvement to see banks being up-front about fees, instead of screwing you without telling you. On the other hand, a monthly fee has nothing to do with usage, risk, or anything else relevant. And, yet, maybe the biggest reason the banks are raising fees is because they can, because there isn’t any real competition in banking.

Banks Plan to Charge a Monthly Fee to Use a Debit Card

As of October 1st, banks will be able to charge only 21¢ per transaction for debit cards, due to the Dodd-Frank Act’s Durbin Amendment. That’s a completely reasonable charge for sending a few bits of data over the wires. But charging comically large percentages for transactions is how banks pay for the mortgages on those skyscrapers, so they’re just going to charge you, instead.

Bank of America will begin charging $5/month to use a debit card early next year, and Wells Fargo is already testing a $3/month fee in some states. In other words, debit card use is going to get a lot more expensive for consumers.

Price tags on everything else may rise, too, since Visa and Mastercard (not banks, so not bound by the Dodd-Frank Act’s Durbin Amendment) plan to quadruple their merchant transaction fee.

Is Overdraft Protection Worthwhile?

Starting today, banks may not charge overdraft fees unless you explicitly opt in to overdraft protection.

So, should you opt in to overdraft protection?

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Wells Fargo’s Freezing of Bank Accounts After Bankruptcy Found Illegal

http://www.flickr.com/photos/ari/3427672405/

Apparently, Wells Fargo has a national policy of freezing its customers’ accounts as soon as they file bankruptcy. This policy apparently has something to do with what Wells Fargo thinks are its obligations to the Bankruptcy Estate. Of course, many debtors will have exempt funds in their accounts, but Wells Fargo stubbornly refuses to give the money back without the blessing of the U.S. Trustee.

The 9th Circuit’s Bankruptcy Appellate Panel just did away with Wells Fargo’s particular brand of debtor harassment, holding that the policy violates the bankruptcy stay. The question of whether Wells Fargo’s violation is willful and entitles the debtor to sanctions will go back to the district court.

Despite the 9th Circuit’s decision, Wells Fargo has apparently decided not to comply, since it plans to appeal.

Wells Fargo’s Procedure of Freezing Accounts After A Bankruptcy Filing Invalidated | Bankruptcy Law Network (thanks, Jay!)
Mwangi v. Wells Fargo Bank, N.A. | U.S. Bankruptcy Appellate Panel of the 9th Circuit

Wells Fargo Under Fire For Lending Practices

The good news is that Wells Fargo just settled a lawsuit with the NAACP based on alleged violations of the Fair Housing Act (FHA). The bad news is that two cities have now filed suit against Wells Fargo under the FHA. This comes on the heels of a class action lawsuit filed last summer for allegedly improperly lowering lines of home equity credit.

The two new suits were filed in Baltimore and Memphis, and both allege Wells Fargo discriminatorily steered African-American into expensive mortgages they could not afford. This causes a rise in defaults and then foreclosures, which then reduces tax revenue and increases the costs of municipal services.

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