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Wells Fargo Hit with $1B in Fines

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Re: Wells Fargo Hit with $1B in Fines

#121

Post by wmeredith »

guelo wrote: post #30
djschnei wrote: post #8

Earlier quoted context omitted.

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, creat…

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.

> 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.

Re: Wells Fargo Hit with $1B in Fines

#122

Post by aerotwelve »

djschnei wrote: post #5

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

Re: Wells Fargo Hit with $1B in Fines

#123

Post by ribosometronome »

kaizendad wrote: post #19

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 thi…

>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.

Re: Wells Fargo Hit with $1B in Fines

#124

Post by Analemma_ »

samstave wrote: post #103
djschnei wrote: post #54

Earlier quoted context omitted.

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.

Re: Wells Fargo Hit with $1B in Fines

#125

Post by pasbesoin »

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.

Re: Wells Fargo Hit with $1B in Fines

#126

Post by djsumdog »

heurist wrote: post #38
aphextron wrote: post #4

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 we…

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…

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.

Re: Wells Fargo Hit with $1B in Fines

#127

Post by Covzire »

aphextron wrote: post #4

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 we…

I've heard it said that people change their spouses more often than they do their banks.

Re: Wells Fargo Hit with $1B in Fines

#128

Post by clairity »

twic wrote: post #91
clairity wrote: post #20

Earlier quoted context omitted.

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…

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…

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).

Re: Wells Fargo Hit with $1B in Fines

#129

Post by aerotwelve »

rb808 wrote: post #12
djschnei wrote: post #5

Where does the fine go? Does it get divvied up amongst the people affected by WF's wrongdoing?

> 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 i…

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...

Re: Wells Fargo Hit with $1B in Fines

#130

Post by ericcholis »

ianamartin wrote: post #116
ericcholis wrote: post #76

Earlier quoted context omitted.

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 Grocerie…

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 t…

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.
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