Can You Trust the Big Banks? Should You Move from Wells Fargo?
Wells Fargo committed fraud. It is plain and simple. You might even say that Wells Fargo committed identity theft. What else would you call it when a bank opens up unauthorized accounts in customer’s names.
Wells Fargo’s scandal resulted in the bank paying $185 million in penalties for opening roughly 2 million consumer deposit and credit card accounts without customer authorization. In addition, they face numerous lawsuits as well as regulatory investigations.
The results of their illegalities are showing up in their business. This CNBC article had this to say about their latest reporting:
- “Mortgage referrals from retail banking were down 24 percent in September from August.”
- “Customer visits with bankers, account openings and applications were down on lower referrals, marketing activity and product offerings.”
- Openings of consumer checking accounts fell 30 percent in September from August, and 25 percent from September last year. Credit card applications declined by 20 percent.
Wells Fargo is not the only bank ripping off people. Just google Bank of America, Citibank, JP Morgan Chase and the word ‘fines’ and you will be amazed at the list of news stories that come up showing the number of times these banks have violated something.
The biggest problem with the big banks is accountability. When the consequences are not terminal, these banks take advantage of the system. Sure they get fined. However, that is something that they can absorb. Reputation which is initially hurt gets rebuilt over time. They basically get away with murder and they live to stay in business.
What if the penalties were so great that there was the chance they could go out of business? After all, what these banks are doing should result in the kind of fines that would question their survival and make them respect the system of law in this country. Who is truly holding them accountable? Even though the politicians put their angry faces on, behind those masks they know that they will take care of the banks. Isn’t that funny that the problem always comes back to the politicians.
So, should you stay or should you go? Well, rest assured Wells Fargo will be on their best behavior at least until they get out from under the microscope which might take a few years. Personally, I don’t want to do business with anyone I can’t trust and I don’t trust the big banks.
Should you stay or should you go? Let me answer with my own personal experience. I bank with a regional bank by the name of TBank (www.tbank.com). I know my banker and she takes great care of me. Just the other day, one of the bankers saw a transaction that was about to hit my account and called me to make sure it was real. You won’t get that at the big banks. My cousin is another great example. He owns a bank in South Texas and is an incredible banker. He takes care of people, does the right thing, believes in the hand shake deal, and values customer relationships. These are the qualities you look for in a bank and the people who take care of you.
Filter your big bank relationship through that litmus test and then decide if you should you stay or you should go.