OT: Wells Fargo to test $3 debit card fee

[binxnyrwarrsoul]

http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fn%2Fa%2F2011%2F08%2F17%2Ffinancia l%2Ff103612D14.DTL
If I was a customer of Wells Fargo, I would not be for long. Charging me to access my own money is ludicrous.

[Dekonick]

http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fn%2Fa%2F2011%2F08%2F17%2Ffinancia l%2Ff103612D14.DTL
If I was a customer of Wells Fargo, I would not be for long. Charging me to access my own money is ludicrous.

And they use your money to make their money. Now they want to tax you to take your own money back?

[flydhest]

charging you to access your own money is a long-standing practice in the banking industry.

I think I may agree with your sentiment, but the issue here is the amount of the fee and what you might get in return from Wells, not the fact of them charging fees.

[93legendti]

I suspect most debit card cos. will move to charging a fee - I'm surprised it took this long

[eddief]

the best gov money can buy.

is this us?

Corporate Oligarchy (Corporatocracy) corporate oligarchy is a form of power, governmental or operational, where such power effectively rests with a small, elite group of inside individuals, sometimes from a small group of educational institutions, or influential economic entities or devices, such as banks, commercial entities that act in complicity with, or at the whim of the oligarchy, often with little or no regard for constitutionally protected prerogative.

[Ozz]

http://www.sfgate.com/cgi-bin/article.cgi?f=%2Fn%2Fa%2F2011%2F08%2F17%2Ffinancia l%2Ff103612D14.DTL
.... Charging me to access my own money is ludicrous.
how do you feel about them providing a safe place to put your money?

BNY/Mellon started charging a fee to large depositors just for putting money in their bank..sort of negative interest.

Agree that the amount of the fee is a bit much...

FWIW - this fee is coming about because the recent legislation that (Dodd-Frank?) that limits the fees that can be charged on credit card purchases...they are just looking for ways to make up lost revenue, just like any other business.

To paraphrase the old Chinese curse..."We live in interesting financial times....."

[SamIAm]

I'm wondering why you think the government should have any role in determining what a corporation can charge for its services. They shouldn't have had to hire lobbyists in the first place!

the best gov money can buy.

"The Sunlight Foundation said in an April report that 24 lobbying firms had been hired last year to influence action on the debit card rules. Eighteen of those firms were registered as representatives of the two major debit card networks, Visa and MasterCard. A large portion of those lobbyists have gone through the revolving door between government and industry: 68 of the 79 people who registered as lobbyists for Visa or MasterCard previously worked in government, according to the Center for Responsive Politics in Washington.

Among the most prominent who worked to influence votes on the debit card measure were Richard A. Gephardt, the former House majority leader and a Democrat, who represented Visa. The retailers had Don Nickles, the former Republican senator from Oklahoma, in their corner."

[FlashUNC]

The fee is the ultimate spawn of the so-called Durbin amendment. The amendment caps the "interchange" fees banks and card processors can charge merchants whenever a customer uses a debit card. For some banks, the fee cap set by the Fed cut their revenues on debit interchange in half, or more.

To offset the lost revenue, banks are shedding debit card rewards programs and implementing fees.

[rugbysecondrow]

This is reminiscent of the airline industry. Who will be the southwest airlines of banks? Some banks(s) will emerge and customers will reward them with handsomely.

[rwsaunders]

FWIW - this fee is coming about because the recent legislation that (Dodd-Frank?) that limits the fees that can be charged on credit card purchases...they are just looking for ways to make up lost revenue, just like any other business.

You are dead on...I think it's the Durbin Amendment.

[eddief]

I suggest at some point in your life either you or someone you know will be negatively affected by a corporation in some significant way. Then the question will be answered for you. I am open to the possibility that you are one of them and would understand your reason for asking the question. All good until the masses finally get tired of it. Maybe you and your neigbors should fight your own fires when your house starts burning. Who needs government anyway?

I'm wondering why you think the government should have any role in determining what a corporation can charge for its services. They shouldn't have had to hire lobbyists in the first place!

[1centaur]

A bank is two things: a business, and competitive. The business is taking deposits in, levering up those deposits, and deploying the cash pile in loans, investments, services, etc. in an attempt to make a profit while preserving the principal for its depositors. The competitive part is that all the other banks do the same things in varying proportions hoping to make more money, grow, attract investment etc. The less successful, less profitable banks fail or are taken over.

When government passes a rule that reduces profitability, in order to be competitive banks will try to make up the lost profit. They can do it directly, by charging their customers more fees, or they can do it indirectly, by taking on riskier, higher returning loans, buying longer term Treasuries or mortgage-backed securities, etc. Charging fees is more conservative/lower risk, unless customers won't pay them. When banks hire lobbyists, part of the reason is to explain to politicians that their crusades have consequences they are not considering clearly.

Southwest is the MOST profitable airline, perhaps, because it figured out a better way to build its network without so much debt and it provides a product sufficiently different from its peers that some people will seek it out. Banks are not capable of that sort of differentiation: size makes for lower cost of capital/profitability, not business plan. Customers seek convenience and lower cost from a product set that does not lend itself to great differences. A fabulous atmosphere and nice tellers at low cost to depositors has to be made up with profits elsewhere or the bank will fail against more profitable peers.

At the end of the day banks make X% profit, and that's a competitively determined number that varies over time with funding costs and regulatory regime (such as how much capital must back the leverage). When you see a $3 fee on a debt card transaction, realize that if not there then somewhere else, in some other way less visible. Banking with the guys down the street with no fees but a risky investment portfolio or less capital is a trade-off most people would make but not understand. And before anyone mentions executive salaries, those are competitive too, with bigger banks more likely to have outsized packages with stock components.

Stick with small, local banks with local loan portfolios and nice tellers, small fees, few ATMs, no national/international banking capacities and minimal on-line banking support if you want the Southwest experience, but be prepared to move your accounts as often as necessary as those banks are consumed by competitors.

[buldogge]

Two simple words...

Credit Union.

-Mark in St. Louis

[ultraman6970]

I think somebody needs to pay for the transition and money spent for buying a lot of wachivia's branches in the east coast.

It sucks, why people is so freaking greedy? I mean ok we are talking about millions when many of the owners of the bank have already too much money to even spend in this life. Not saying they have to give away stuff but probably many have the idea already of what i'm saying.

They will lose so much clientele that it wont be funny.

[wooly]

I've been a Wells customer for 25 years (since college) and my parents both worked a their HQ in San Francisco in the 70's. For whatever reason I've been loyal. Having recently opened a Wells business account for my start up I have to say I am still pleased with their service. But when if they continue to nickel and dime me I will look at some of the strong regional and community banks in my hood.

[rwsaunders]

Two simple words...

Credit Union.

-Mark in St. Louis

Credit Unions vehemently opposed the amendment as well, since it essentially caps the amount of the transaction fee that either a bank or credit union can charge a retailer. Say goodbye to free checking and potentially free debit card fees, as the transaction fee deficit has to be recovered somewhere. Loans and deposits alone can't do the trick.

http://www.forbes.com/sites/moneybuilder/2011/03/03/the-durbin-amendments-effect-on-credit-unions/

[johnnymossville]

lifting your mattress to retrieve funds costs much less.

[mgd]

I'm wondering why you think the government should have any role in determining what a corporation can charge for its services. They shouldn't have had to hire lobbyists in the first place!

why? because these 'private corporations' are entirely dependent on the generosity of the hard working american middle class for their existence. the united states citizens very kindly bailed these incompetent loser banksters out. the fact that such largess wasn't immediately followed by new-deal-on-steroids regulations with elizabeth warren given summary execution authority is yet another example of how sick and pathetic our society really is.

and it's not just banks. exxon and ge might as well be government agencies.

[Fixed]

Caveat emptor

cheers

[binxnyrwarrsoul]

+1. I've been a member of a credit union for the last 16 years. Lowest rates on loans and credit cards, no fees on atm withdrawals and debit card transactions. But the place they shine is customer service. Somthing "regular" banks seem to have forgotten about. Highly recommended. Two simple words...

Credit Union.

-Mark in St. Louis

[buldogge]

This has been my experience as well.

Also...with loans...they hold them and don't sell them.

When I was starting out, I was able to talk to a human being about my particular business circumstances and get a reasonable understanding when we were applying for our first mortgage... When there was a question I was able to talk to someone "in power", an actual human being, not a mysterious figure handing down orders from above who I did not have access to. Melodramatic...but true.

-Mark

+1. I've been a member of a credit union for the last 16 years. Lowest rates on loans and credit cards, no fees on atm withdrawals and debit card transactions. But the place they shine is customer service. Somthing "regular" banks seem to have forgotten about. Highly recommended.

[1centaur]

why? because these 'private corporations' are entirely dependent on the generosity of the hard working american middle class for their existence. the united states citizens very kindly bailed these incompetent loser banksters out. the fact that such largess wasn't immediately followed by new-deal-on-steroids regulations with elizabeth warren given summary execution authority is yet another example of how sick and pathetic our society really is..

I don't see the generosity angle. As businesses, they provide services that customers pay for - no generosity there. As bailouts, the rich overwhemingly paid for the cost of those via their share of income taxes, but the banks overwhelmingly repaid those loans. Loans are not free money and cannot be defined as largess. The bailouts were not for them they were to serve society's purposes, which is why we did not charge them 20% interest rates. The alternative was nationalizing the banks (again, using mostly the taxes paid by the rich) which would have had other large, negative consequences (see Ireland). The net cost to the taxpayers (mostly the rich) of the bank bailouts was tiny compared to the alternative. The cost of Freddie/Fannie support is another matter altogether, and I am not disputing the need for much better regulatory oversight (because I agree with the charge of incompetence at the banks) and the end of too big to fail.

[saab2000]

I don't see the generosity angle. As businesses, they provide services that customers pay for - no generosity there. As bailouts, the rich overwhemingly paid for the cost of those via their share of income taxes, but the banks overwhelmingly repaid those loans. Loans are not free money and cannot be defined as largess. The bailouts were not for them they were to serve society's purposes, which is why we did not charge them 20% interest rates. The alternative was nationalizing the banks (again, using mostly the taxes paid by the rich) which would have had other large, negative consequences (see Ireland). The net cost to the taxpayers (mostly the rich) of the bank bailouts was tiny compared to the alternative. The cost of Freddie/Fannie support is another matter altogether, and I am not disputing the need for much better regulatory oversight (because I agree with the charge of incompetence at the banks) and the end of too big to fail.

This appears to be a quite balanced and reasonable response. As I sit in my hotel waiting the storm out.... :banana:

[rugbysecondrow]

When government passes a rule that reduces profitability, in order to be competitive banks will try to make up the lost profit. They can do it directly, by charging their customers more fees, or they can do it indirectly, by taking on riskier, higher returning loans, buying longer term Treasuries or mortgage-backed securities, etc. Charging fees is more conservative/lower risk, unless customers won't pay them. When banks hire lobbyists, part of the reason is to explain to politicians that their crusades have consequences they are not considering clearly.

Southwest is the MOST profitable airline, perhaps, because it figured out a better way to build its network without so much debt and it provides a product sufficiently different from its peers that some people will seek it out. Banks are not capable of that sort of differentiation: size makes for lower cost of capital/profitability, not business plan. Customers seek convenience and lower cost from a product set that does not lend itself to great differences. A fabulous atmosphere and nice tellers at low cost to depositors has to be made up with profits elsewhere or the bank will fail against more profitable peers.

.

I agree with much of what you write and I think it is applicable in an old business model, but think INGDirect...a great bank with a great service, rate and convenience record. They might not 100% analogous to Southwest, but the point is the same. New model, great service (both banking and customer), and meets the needs of the client. I also think that the new model would suggest shedding fixed costs such as physical locations. I have closed on property via Fed Ex, I don't need a redundancy of bankers at all these various locations...but that is the model and it is old.

It was funny, I called my bank yesterday to ask a simple question about a pending transaction, the lady told me I should have come into the bank location to ask the question. I let her know that me coming in with two young kids in tow to ask this simple question was not going to happen and she was put out. This has happened with another local bank as well, so I know it is common. My point is that they want to do business on their terms rather than the customers terms. When a bank or banking institution works at the customer level, it will succeed. ING Direct and others of a similar model seem to be the best firm.

Oddly enough, just this week, ING Direct announced I could get paper checks for what used to be an exclusivly electronic checking account...an increase in service.

Pay Pal allows me to digitally deposit checks from my iphone, no need to go to a bank. Take a photo of the front and back and BAM that is it!

The old school banks and hoping that the trouble and PITA factor of switching banks, payments, direct deposits etc will be enough for customers to suck it up. They will eventually be proved wrong.

The old model is failing and customers will soon realize this and stop putting up with being nickel and dimed.

[rugbysecondrow]

I suggest at some point in your life either you or someone you know will be negatively affected by a corporation in some significant way. Then the question will be answered for you. I am open to the possibility that you are one of them and would understand your reason for asking the question. All good until the masses finally get tired of it. Maybe you and your neigbors should fight your own fires when your house starts burning. Who needs government anyway?


Corporations and companies are neither inherently good or bad, but they are typically positive in America. I like being able to shop for different washing machines, refrigerators, jeans, shirts, shoes, bike parts, tires, cars, banking institutions etc. as well as having many options for stores to chose from to peruse these items. I like that corporations pay and provide benefits for millions of American workers and help to keep our unemployment rate very low relative to the rest of the world. I like that we do have relative stability in our society, local and national.

Are corporate institutions perfect? Nope, but they participate in the handshake with American workers and consumers and it seems to work pretty well.

[marle]

The subsidy enjoyed by higher income / middle class banking customers, from lower income / higher credit risk customers paying over limit and late fees, is over.

[Bud_E]

I'm wondering why you think the government should have any role in determining what a corporation can charge for its services. They shouldn't have had to hire lobbyists in the first place!

I have no problem with the bank charging whatever they want. But they need to be required to spell out their terms in plain English so that the slower among us know exactly what we're getting hit with.

[Ken Robb]

First Republic Bank reimburses me for any fees charged by any bank at any ATM. They are as good a bank as I can imagine. :beer:

[mgd]

I don't see the generosity angle. As businesses, they provide services that customers pay for - no generosity there. As bailouts, the rich overwhemingly paid for the cost of those via their share of income taxes, but the banks overwhelmingly repaid those loans. Loans are not free money and cannot be defined as largess. The bailouts were not for them they were to serve society's purposes, which is why we did not charge them 20% interest rates. The alternative was nationalizing the banks (again, using mostly the taxes paid by the rich) which would have had other large, negative consequences (see Ireland). The net cost to the taxpayers (mostly the rich) of the bank bailouts was tiny compared to the alternative. The cost of Freddie/Fannie support is another matter altogether, and I am not disputing the need for much better regulatory oversight (because I agree with the charge of incompetence at the banks) and the end of too big to fail.

you totally missed the point. no kidding it wasn't generosity. duh! the taxpayers had no choice. the banks don't provide a service that people pay for; for most folks who don't have huge portfolios that need protecting with a generous slathering of b.s. on forums like this from the the favored servant class, the banks do little more than light the building where their federally-insured money lives. in most cases a credit union would be a better solution. or a post office savings account!

keeping those failed institutions solvent, whether it's a loan that's paid back or not, without taking measures to prevent them from utterly failing again and again goes beyond generosity. it's insanity.

and your 'taxes mostly paid by the rich' is utter bullcrap, and you know it. you know full well that the tax burden vs. share of wealth is at all-time lows in the modern era in the united states. if we were under the eisenhower tax system, you could almost make that lame point without being laughed out of the room, unless you were on fox news channel where everyone knows ike was a traitor or something.

the bailout was absolutely largess because it was intended to protect the wealth and status of certain 'private businesses' and individuals by using money paid by the entire population; those fine fine folks who made the mistakes were made whole and more, while the vast majority of the contributors got nothing. that's largess. for that privileged bankster cohort whose bonuses were paid by the social security trust fund, paying a buck to get 10 at the end was indeed not largess, but i wasn't talking about them.

letting the banks fail, nationalizing what was left and making sure nobody even remotely associated with the failure--including shareholders! sorry!!--got paid would have been a better deal for the country--not the banksters, unfortunately--and would have gone a long way to reprioritize the value system in the entire financial sector as well as serving the true interests of the society. people whose pensions are not paid or whose contract is not honored or whose union is not recognized or whose retirement is postponed are always told they must share in the sacrifice, but when it comes to situations like the bank bailout, people like the banksters never have to suffer one bit because the full force of the united states will make sure their jobs and fortunes are secure and their bonuses are paid.

i understand fully that some people find themselves in the upton sinclair situation and pretending to not understand is just as good as not actually understanding. we won't get into ireland. ireland's problem was not about nationalizing banks!! but you know that.

[Bruce K]

Down fellas! You need to dial this back some or it will get locked.

If you want to continue to have this conversation (and it may not), then CHILL!

BK

[mgd]

Corporations and companies are neither inherently good or bad, but they are typically positive in America. I like being able to shop for different washing machines, refrigerators, jeans, shirts, shoes, bike parts, tires, cars, banking institutions etc. as well as having many options for stores to chose from to peruse these items. I like that corporations pay and provide benefits for millions of American workers and help to keep our unemployment rate very low relative to the rest of the world. I like that we do have relative stability in our society, local and national.

Are corporate institutions perfect? Nope, but they participate in the handshake with American workers and consumers and it seems to work pretty well.

i'm not sure this appraisal of corporations in the united states has been accurate for at least two generations.

[rugbysecondrow]

i'm not sure this appraisal of corporations in the united states has been accurate for at least two generations.


How is it not accurate?

It is easy to take shots are corporations, especially big ones, but there are a lot of workers in many different industries who are gainfully employed because of and by corporations.

[Uncle Jam's Army]

Let me get this right. Banks encouraged us to get on debit cards so that their check processing operation costs could go down. It is expensive for banks to process and clear checks. Now they want to charge a fee for using a debit card? I guess one way of reversing their cost structure would be to start writing checks again and forego the fee. But then I would imagine they will come up with a check writing fee.

[mgd]

How is it not accurate?

It is easy to take shots are corporations, especially big ones, but there are a lot of workers in many different industries who are gainfully employed because of and by corporations.

if we have relative local and national stability right now, it's not due to the benevolent influence of any corporation i can think of. they've chased slave wages and lax regulations in mexico, asia and eastern europe at every opportunity without regard to any handshake with the american people. more like a middle finger. and from where i sit it doesn't look like it is working very well at all.

[KF9YR]

The business that accepts debit card transactions already pays a fee.

We calculate or debit/credit fees when we determine our prices and adjust them accordingly.

We are also charged fees to deposit the cash we collect from our customers.

Not all corporations are large faceless institutions hoarding cash they took from the middle class/poor. Most are private and formed for protection from lawsuits (insurance claims, etc).

[rugbysecondrow]

if we have relative local and national stability right now, it's not due to the benevolent influence of any corporation i can think of. they've chased slave wages and lax regulations in mexico, asia and eastern europe at every opportunity without regard to any handshake with the american people. more like a middle finger. and from where i sit it doesn't look like it is working very well at all.


Blah, blah, blah. Benevolence has nothing to do with it, profits do and that is not bad. This handshake is where employees work for a wage, a wage which the corporations pay as part of a structure that hopefully allows them to make a profit. The pay is likely somewhat commensurate with the skills brought to the table by the worker.

Like I said, nothing is perfect, but note that it is not corporations that are bad but rather individual corporations that have issues. We can choose to not do business with them or not invest in them. There are many good ones too, many that offer great jobs and great opportunities.

Lets not be foolish and long for the day of honest to goodness mom and pop small businesses. There were some that were bad also that cheated customers as well as taking advantage of employees.

[mgd]

Blah, blah, blah. Benevolence has nothing to do with it, profits do and that is not bad. This handshake is where employees work for a wage, a wage which the corporations pay as part of a structure that hopefully allows them to make a profit. The pay is likely somewhat commensurate with the skills brought to the table by the worker.

Like I said, nothing is perfect, but note that it is not corporations that are bad but rather individual corporations that have issues. We can choose to not do business with them or not invest in them. There are many good ones too, many that offer great jobs and great opportunities.

Lets not be foolish and long for the day of honest to goodness mom and pop small businesses. There were some that were bad also that cheated customers as well as taking advantage of employees.

you were the one who brought up the nonsense of 'a handshake with the american people' and now it's blah blah blah. i didn't want to say that at first, but i agree with you.

i'm not naive enough to believe in the galtian crap about the private sector, but help yourself!

[Bruce K]

This one's done.

BK