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Thursday, June 28, 2012

Wells Fargo's latest fee is bad for business

Posted By on Thu, Jun 28, 2012 at 4:22 PM

This week Wells Fargo surprised customers who maintain free checking accounts.

The San Francisco-based bank sent notice that it'd be charging new monthly fees ranging from $5-$12 to customers who do not maintain a minimum daily balance in the thousands or have a direct deposit of $500 each month.

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Bloomberg reports these new fees are a result of recent legislation banning excessive overdraft fees. Wells Fargo lost 27 percent of its service-charges revenue since the law was implemented, dropping it to a measly $1.3 billion annually. It must make up for it by imposing fees on customers who don't have a couple extra grand sitting in their checking account indefinitely (i.e., students, those living paycheck to paycheck, and the unemployed).

Maybe instead of nickel-and-diming its poorest customers, the bank could take the shortage out of executive pay, which has increased by 180 percent since 2008. Or it could stop spending millions lobbying against things like corporate transparency laws and consumer protection

It could also raise more capital by selling off the 4 million shares of America's prison industrial complex it possesses. Or it could fall back on whatever is left of the $25 billion it received in government relief, provided by taxpayers, many of whom lost their job when the bank's bad investments helped topple the economy. The term "class warfare" is thrown around a lot in the media lately, but it accurately describes the way Wells Fargo conducts business.

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