When Mark Cromer walks into Wells Fargo, he puts his hands in the air
[Note: With Wells Fargo under investigation for its banking practices, this column I wrote for Los Angeles City Beat a dozen years ago seems particularly pertinent once more, as it first shed a light on how massive financial institutions can use dubious means to casually squeeze billions out of its working and middle class customer base. And how nothing has been done about it.]
As I listen to the attractive blonde teller in front of me repeat her lines by sheer rote, I can’t shake the mental image of a scene from Butch Cassidy & The Sundance Kid, the moment where Paul Newman and Robert Redford find themselves eyeing the Banco de Los Andes in a dusty Bolivian square.
“ The thing to remember when we get inside…” Newman starts to say. “ Don’t tell me how to rob a bank!” Redford snaps. “I know how to rob a bank.”
I suppose it’s the lush irony of the moment that flashes this scene in my mind, as the seemingly romantic days of Butch & The Kid have long since vanished into an era where it is now the banks that know how to rob the people—with a gun-less efficiency that would have had the real Robert Leroy Parker drooling.
A gun shoved into your back? How passé. Though psychosomatically you may feel the cold steel of a barrel buried in your spinal column as you review your monthly statement, banks today jack you out of your dough in a non-violent but no-less ruthless fashion. They call it “ fees.”
Over a two-day period in May, Wells Fargo hit me with $132.00 in fees for covering four charges on my ATM card that over drew my account by a total of $36.55. None of my ATM purchases were more than $11.00, yet Wells Fargo clipped me triple that amount each time.
Wells Fargo calls it overdraft “ protection.”
If I bought that kind of protection from ‘ Fast Freddy’ down on Broadway and he parlayed that kind of deal on me, I could go to the LAPD and file a report. With Wells Fargo, where according to my checks I have been “A Valued Customer Since 1992”, I have little choice as a consumer but to “go elsewhere.”
But according to the Consumer Federation of America, I might have a difficult time finding relief with any of Wells Fargo’s sisters in the banking industry. According to a report issued in June, the majority of major banks employ “ courtesy over-draft” loans to rack up huge profits.
According to the report [available at www.consumerfed.org], consumers shell over at least $10 billion annually and the watchdog group estimates the fees may ultimately take in as much as $27 billion a year for the banks.
The banks have score big when consumers use their ATM cards for point-of-sale purchases, which the banks encourage. Yet instead of declining a sale when a checking account is overdrawn, banks like Wells Fargo extend a “courtesy loan” and then charge astronomical interest against it.
“You don’t get a notice. You don’t get a warning. You can not terminate the transaction. They do not ask you if you would like this ‘courtesy loan’,” says Jean Ann Fox, Director of Consumer Protection at the Washington D.C.-based federation. “With courtesy like this, who needs rude behavior?”
Indeed, for the issue at play here is far deeper, far more ugly than one struggling Schmoe like me trying to find the right bank to survive with in these difficult times. The issue is the pervasive, all-consuming greed among the executive class and its culture that these ‘fees’ represent. Far more so than Enron’s books or WorldCom’s parties, the banking industry’s gleeful fisting of the middle and working class is on abundant display—as is our apparent willingness to take it.
Why shout ‘Hands In The Air, Mutha F…’ [Hey, only future inmates play that game!], when Wells Fargo can send oblique notices through the mail that coolly denote monthly-point-of-sale fees, monthly service fees, checks returned with statement fees, stagecoach banker fees [for speaking to a live person on the phone], ATM statement fees, overdraft fees, continual overdraft fees and Non-Sufficient Funds fees, to name a few.
The big money—the real money, as they say—can be found in the NSF and overdraft fees that the banks employ with all the nuance of Robert McNamara recommending a B-52 strike. Wells Fargo charges $33.00 every overdraft fee and $28.00 for every NSF fee. Doesn’t sound like much? Well here’s the rub: if a customer is overdrawn just two bucks—Wells Fargo charges them $33.00, every time.
In an era when internet bill-paying and widespread use of ATM cards is combined with banks’ increasing use of fees and charges, all set against the fact that the working class is now living paycheck-to-paycheck; becoming unintentionally overdrawn by a few bucks is a weekly occurrence for millions of Americans.
And to banks, that is blood in the water with the cowbell ringing.
With the blessing of Uncle Sam, who has yet to act to rein in the fee scales, financial institutions have been gorging at this orgy of Armani-garbed larceny for years and their appetite at picking off the bones of the middle and working-class carcass is hardly sated by tough economic times.
The irony of course is that for the executive class, fees are waived virtually across the board. Having large reserves of money is rewarded, struggling to get by is penalized.
So brazen have some banks become, that even depositing money to stop the bleeding is not made easy, as my go-go teller explained to me.
I am standing inside the small Claremont branch of Wells Fargo, the iconic west coast banking giant that prides itself on its historical connection with the American frontier. You know: cowboys and Indians, shoot’em ups and shake’em downs.
Wells Fargo likes to tap the romanticism that America still holds for its Wild West salad days with benign marketing campaigns of stagecoaches rushing into the rustic sunset, and even the ugly undercurrent of demanding their daily vig is presented with a smile.
The teller is earnestly explaining why the $2,000.00 check I am depositing might be “held” for up to seven days while “funds clear.” I ask how that could be, considering it is a check from a huge corporation drawn on an account at a large commercial bank?
“Well sir, it seems you’ve had some overdrafts lately.”
“That may be true, but I am depositing money,” I said. “Isn’t adding money to an anemic account a good thing?”
“Well sir, we have to be sure the funds are good.”
“Can’t you call to confirm the check is good, or do it online?”
“Even if we could, sir, how would we know it will still be good tomorrow or whenever they process the check?”
I ask her if Wells Fargo will then “put a hold” on any overdraft fees that may hit pending the release of the funds.
She smiles, a beautiful Stepford-zen smile. “ No sir, we can’t.”
I feel a little Travis Bickle coming over me. “So what you’re telling me is that you won’t credit me the funds I am depositing, but you will continue to hammer me with massive overdraft fees, as a courtesy, of course.”
Her smile drops and she looks across the floor to her manager. “Customer service please.”
The following day, Wells Fargo hit me with another $33.00 overdraft on a charge of $9.18 and, the day after that, hit me with $63.00 in fees for covering a $23.00 charge and returning a $3.00 check [my gas bill].
In three days, Wells Fargo charged me $228.00 in fees for the courtesy of covering less than $70.00 in charges.
And banks like Wells Fargo won’t break a sweat crediting accounts with funds deposited until Congress [God help us], forces them to.
According to Fox at the Consumer Federation, Congress has been half-hearted at best in rallying to the side of John & Jane Public. When legislators recently passed the infamous ‘ Check 21’ legislation that allowed banks to almost-instantly deduct money from our accounts, it somehow neglected to speed up the process of crediting deposits.
Maxine Waters is listed as a co-sponsor of H.R. 799, which apparently is designed to help expedite the crediting of deposits, but Fox says the bill is languishing in committee. Calls to Waters local and Washington offices went unreturned.
“The consumer is losing control of their bank accounts,” Fox said, noting that the fee schematic banks like Wells Fargo currently employ are virtually indistinguishable from predatory ‘pay-day’ lenders. “At its very essence, it is short-term, debt-trap lending, but on a massive scale. It’s heads we win and tails you lose.”
I am not optimistic that Congress will step up to plate and force these institutional loan sharks to end their gluttony. No, Congress usually drives the getaway car for these guys.
But perhaps when the tipping point is reached, when consumers finally snap en masse under the pain of such blatant and sustained corporate rape, the upheaval will portend a return to the days of Butch & The Kid—when two-bit outlaws on the dodge at least had the courtesy to tell you: “This is a robbery.”
This article was first published in Los Angeles City Beat.
