Law Office of Rick Morin, PC

Are you still banking at Wells Fargo? Why? Let’s sit down and talk about it.

Wells Fargo Has Trouble

Ever since the financial crisis in 2008, banks have come under scrutiny by the government, press, and even their own customers. As one of the largest banks in the country, Wells Fargo has faced its fair share of scrutiny. And yet nothing seems to change.

If you haven’t been reading the news recently, Wells Fargo was forced to pay a $185 million fine for opening over 5 million accounts without customer permission. Why would they do that?

Wells Fargo was opening these unauthorized accounts to inflate their sales numbers. The accounts also incurred fees. These fees added to the bank’s bottom line and helped show investors that the bank was growing.

People Are Starting to Pay Attention

While a $185 million fine is a lot of money, it is nothing compared to Wells Fargo’s annual revenue — nearly $100 billion per year. The $185 million fine amounts to just just pennies on the dollar. Where is the incentive for Wells Fargo not to continue with similar shenanigans in the future?

Several state governments, including California, have announced that they are temporarily severing ties with Wells Fargo. State governments have banking needs too. California announced a one-year ban on dealings with Wells Fargo. The bank responded by stating that government contracts are not a significant source of income. In other words, “yawn.”

There Are Great Alternatives

A large bank with branches nationwide used to be a big convenience. With most banking occurring online, working with a huge bank isn’t the big draw that it used to be.

I personally belong to several credit unions for my personal banking needs. Many credit unions belong to a co-op that allow credit union members access to branches and ATM machines of competing credit unions nationwide. With mobile deposit, direct deposit for wages, and online statements, how often do you really need to visit a physical bank?

Credit unions, as a general rule, are not designed to screw their customers. This is because each credit union member actually owns a part of the credit union. Fees and interest rates are more favorable. And credit union deposits are insured in manner similar to that of the FDIC.

Don’t forget that there are numerous alternatives to huge banks. Ask around and you will find that there are far better places to store your money and the typical large banks you see on television.