This is absolutely unacceptable, and I'd like to see regulatory fines.
A worse version of this that I've read a few times is banks suddenly "security" flagging your accounts and disabling everything for sometimes up to weeks at a time while they "investigate."
I've tried to protect myself from a single banking point of failure with this setup:
- Paycheck into local Credit Union Checking
- Partial automatic transfer from Credit Union Checking into online Bank Checking
- All bills are paid from the Credit Union except Credit Cards, which are paid out of online bank
Ultimately if either the Credit Union or online Bank has problems, I just use the other one. I'd then move my next months Paycheck if it was the local Credit Union that was problematic. This setup is actually simpler than I am making it sound, two checking accounts and a single automatic transfer (then splitting your bills appropriate).
Nobody should have to do this to have a good banking experience, but prudence never hurt.
Chase closed my account because I deposited a valid check, but chase fraud dept closed my account with close to 13k in it.
I made a lot of trips to the bank, countless hours on the phone and what I found is different departments don’t communicate or share data.
Every time I call or go to the bank the first agent would say a check was mailed and I should wait for it in the mail, but wouldn’t give me an ETA. After I insist they never mailed anything, I get transferred around and finally someone says they have not received the requested document - which I had submitted in person at a local branch.
This process repeated few time and got escalated to their “executive office” twice - which restarted the process.
It felt like I would never get my money and after two months found out about CFPB and filed a complaint. About 3 weeks later chase magically found all the documents and mailed a check for the balance.
If they resolved this in just a few hours (as the article states) why should there be fines? Unless there was some kind of negligence involved anyone can have a technical issue. Software is just too complex now, especially when you are supporting legacy code from 50 years ago
At what point do we say, “Ok, we’re revoking your corporate charter. Please wind down your operations and liquidate your holdings.” A corporate charter isn’t supposed to be an eternal grant. If the corporation continuously breaks the law —lies, cheats, and steals over and over — there’s no reason why it should be allowed to exist anymore. As a bank, their first responsibility is to secure their customers’ money, and it’s clear that they are incapable of that. Wells Fargo has shown that they cannot reform itself. Time to pull the plug.
> At what point do we say, “Ok, we’re revoking your corporate charter. Please wind down your operations and liquidate your holdings.”
I think we do that at the moment that the government decides to make the shareholders whole. And, that's expensive. Nothing short of that is politically feasible.
Wells Fargo does something unethical, damaging, and arguably unforgivable every couple of years. It boggles my mind that anyone would knowingly and willingly do business with them.
My local mortgage lender wound down right after we bought our house and sold our mortgage to Wells Fargo. I'd been avoiding them for ages; I guess sometimes there's just no escape.
Honestly I think these days credit unions are way overrated. The true small independent ones that look out for their members are a rarity, and non-existent in many areas. They've merged, or shifted strategies, and most of them are driving for higher profits the same way that the major banks are. But the difference is that they usually have way worse technology, and fewer branches, so you get the inconvenience of an old school credit union without the benefits. It's often the worst of both worlds. I do still have a credit union account, but I think people need to be really careful about just jumping to a CU and expecting it to be great. You have to do your research and try to find one that is actually still decent, if that even exists in your location.
People should extend this to tech; I don't understand why anyone would e.g. use Google for a business email account. Who do you call and yell at when something breaks?
Pay a smaller company for this.
Don't actually yell of course, in my case you beg for forgiveness and get pleasantly surprised, like the time when my dad accidentally deleted LITERALLY ALL OF HIS LAW FIRM EMAIL, and I had no idea what I could do. Provider was able to roll back the server a day for a whopping 15 bucks.
I do this. The biggest drawback for me with this is that many online services are using plaid or equivalent for setting up payments and my local credit union isn’t on their radar. I can do it, eventually, but you have to find the screen that allows the small transfer verification method, which takes days to set up. A lesser drawback is that there are other virtual checking accounts that pay almost 5% interest and that means that the cost of having a credit union account can be bigger than expected. We have just $7000 in one of those virtual checking accounts and it paid over $20 last month. I say this as lesser because it’s always possible to move money from checking into investments, it’s just much easier when it happens without any friction.
I would trust a bigger bank more than I would a smaller bank, simply because the former has more money (or should, anyway...).
Really though, the moral here is to not put all your eggs in one basket. Keep another checking and/or savings account at another bank, big or small, with ample funds so your finances are redundant in the face of freak incidents.
And if you are really paranoid or just have bad luck with these things, keeping some physical cash at home for true emergencies certainly wouldn't hurt.
Only if you're an existing customer and don't want to go through the effort of switching.
However, I am now going to switch. I feel like an idiot for not switching earlier. There is nothing redeeming about Wells Fargo, other than they might have your money available for you. Other than that, it's shenanigans every few years, pushy customer service, a crappy website, and an even crappier mobile app.
When you deposit money, it's no longer your money. You've now lent the money to the bank. That bank may or may not be worthy of your trust, and there are likely rafts of laws protecting you. But ultimately it's a loan to the bank. All you own is an acknowledgement from this institution that they owe you $x.
On the other hand, if you buy shares in the bank, you now own a chunk of it. Of course this isn't a feasible way to keep your day-to-day cash; we all need checking & credit accounts. But anything above the minimum is a risk, and a lost opportunity from investing returns you could've gotten from shares, bonds, or even the money market.
For that minimum expense float we all need to have, cash under the mattress is not that terrible of an idea, assuming you live in a safe place.
Also, if you loan money to a bank and the bank becomes insolvent, the FDIC will pay you back (up to at least $250k). OTOH, if you bought shares in the bank, in that scenario you’d probably lose everything you invested.
Perhaps unintuitively, smaller banks tend to be more susceptible to problems like the recent bank runs. Matt Levine has written about this in his column for Bloomberg, Money Stuff.
What is the typical root cause of these issues ? Is it improper architecture / transaction management that only gets exposed when certain things that usually work become unreliable ?
Functionally it's usually an edge case somewhere or someone doing something stupid. Recently where I reside there was an overflow scenario of a registration number and the powers that be decided to add another digit. Of course to maintain "compatibility" this number is a string and they added "0" to the start of it. Some organisations treated it as a string, some as a number. Ones who treated it as a string ended up with two orgs defined as "01234" and "1234". Of course org "1234", now known as "01234" wondered where the hell all the integration data went. Even worse someone registered an org "045" when "45" already existed which means that the wrong org got the integration data. This manifests itself as stuff being missing usually.
At that point, the outsourcing managers adopt the spiderman pointing pose ( https://i.imgur.com/ypYY6yg.png ) and try and establish blame. This takes forever to resolve due to a Mexican-standoff scenario, usually broken by one of them getting hungry which can take a few hours. Eventually blame is assigned and a team is set upon it. Because staff turnover is so high due to the low salary, no one at the outsourcing outfit knows anything about some rancid bit of COBOL/REXX/RPL or if you're really lucky Java which is holding all this together. In a panic, only initiated after someone informs them that they are going to have to pay a hefty compliance fine, the management team start running around like headless chickens. Eventually they bump into someone they forgot to fire who can remember who the original engineers are who wrote this. Delving into an ancient HR database, they find the mobile number of the last guy who touched and call him. His widow answers and informs them that Bob died 3 years ago but his old colleague Terry is still alive and you might want to call him. They call up Terry who is on a golf course somewhere. Terry is concerned but not that concerned about the situation because he knew what a steaming shit show the org was and moved his money well away from it. Eventually the manager starts waving daily rates around meeting the "I can be bothered" level of interest. Terry finishes his game, throws the clubs in his car and heads into the office to look at it. After 3 hours of unsuccessfully trying to work out how to get Terry an account on the mainframe again without having to involve the outsourced helpdesk, which is currently down due to a huge mudslide, he sits at someone else's terminal and stares intently at the problem. He utters a few words, edits a few characters in one file and resubmits the job. Several minutes later, the phone lines stop ringing. All is good again, Terry made $1500 and the org only lost 2% of its customers compared to the 0% it should have lost if they hadn't outsourced everything.
[+] [-] Someone1234|2 years ago|reply
A worse version of this that I've read a few times is banks suddenly "security" flagging your accounts and disabling everything for sometimes up to weeks at a time while they "investigate."
I've tried to protect myself from a single banking point of failure with this setup:
- Paycheck into local Credit Union Checking
- Partial automatic transfer from Credit Union Checking into online Bank Checking
- All bills are paid from the Credit Union except Credit Cards, which are paid out of online bank
Ultimately if either the Credit Union or online Bank has problems, I just use the other one. I'd then move my next months Paycheck if it was the local Credit Union that was problematic. This setup is actually simpler than I am making it sound, two checking accounts and a single automatic transfer (then splitting your bills appropriate).
Nobody should have to do this to have a good banking experience, but prudence never hurt.
[+] [-] bjacobt|2 years ago|reply
Chase closed my account because I deposited a valid check, but chase fraud dept closed my account with close to 13k in it.
I made a lot of trips to the bank, countless hours on the phone and what I found is different departments don’t communicate or share data. Every time I call or go to the bank the first agent would say a check was mailed and I should wait for it in the mail, but wouldn’t give me an ETA. After I insist they never mailed anything, I get transferred around and finally someone says they have not received the requested document - which I had submitted in person at a local branch.
This process repeated few time and got escalated to their “executive office” twice - which restarted the process. It felt like I would never get my money and after two months found out about CFPB and filed a complaint. About 3 weeks later chase magically found all the documents and mailed a check for the balance.
[0] https://www.consumerfinance.gov/
[+] [-] zeroonetwothree|2 years ago|reply
[+] [-] me-vs-cat|2 years ago|reply
[+] [-] dimal|2 years ago|reply
[+] [-] golemotron|2 years ago|reply
I think we do that at the moment that the government decides to make the shareholders whole. And, that's expensive. Nothing short of that is politically feasible.
[+] [-] Arubis|2 years ago|reply
[+] [-] gameman144|2 years ago|reply
[+] [-] phpisthebest|2 years ago|reply
If you are living paycheck to paycheck this is doubly true. Never trust your ability to buy food to a commercial bank
[+] [-] zippergz|2 years ago|reply
[+] [-] jrm4|2 years ago|reply
Pay a smaller company for this.
Don't actually yell of course, in my case you beg for forgiveness and get pleasantly surprised, like the time when my dad accidentally deleted LITERALLY ALL OF HIS LAW FIRM EMAIL, and I had no idea what I could do. Provider was able to roll back the server a day for a whopping 15 bucks.
[+] [-] viraptor|2 years ago|reply
[+] [-] twobitshifter|2 years ago|reply
[+] [-] Dalewyn|2 years ago|reply
Really though, the moral here is to not put all your eggs in one basket. Keep another checking and/or savings account at another bank, big or small, with ample funds so your finances are redundant in the face of freak incidents.
And if you are really paranoid or just have bad luck with these things, keeping some physical cash at home for true emergencies certainly wouldn't hurt.
[+] [-] unknown|2 years ago|reply
[deleted]
[+] [-] zeroonetwothree|2 years ago|reply
[+] [-] rthomas6|2 years ago|reply
[+] [-] ravenstine|2 years ago|reply
However, I am now going to switch. I feel like an idiot for not switching earlier. There is nothing redeeming about Wells Fargo, other than they might have your money available for you. Other than that, it's shenanigans every few years, pushy customer service, a crappy website, and an even crappier mobile app.
[+] [-] kid64|2 years ago|reply
[1] https://www.washingtonpost.com/news/wonk/wp/2017/06/15/seven...
[+] [-] sys_64738|2 years ago|reply
[+] [-] turnsout|2 years ago|reply
[+] [-] marginalia_nu|2 years ago|reply
[+] [-] FredPret|2 years ago|reply
On the other hand, if you buy shares in the bank, you now own a chunk of it. Of course this isn't a feasible way to keep your day-to-day cash; we all need checking & credit accounts. But anything above the minimum is a risk, and a lost opportunity from investing returns you could've gotten from shares, bonds, or even the money market.
For that minimum expense float we all need to have, cash under the mattress is not that terrible of an idea, assuming you live in a safe place.
Something to keep in mind!
[+] [-] usefulcat|2 years ago|reply
[+] [-] rexreed|2 years ago|reply
[+] [-] trilbyglens|2 years ago|reply
[+] [-] usefulcat|2 years ago|reply
[+] [-] Finnucane|2 years ago|reply
[+] [-] pylua|2 years ago|reply
[+] [-] pavpanchekha|2 years ago|reply
[+] [-] baz00|2 years ago|reply
At that point, the outsourcing managers adopt the spiderman pointing pose ( https://i.imgur.com/ypYY6yg.png ) and try and establish blame. This takes forever to resolve due to a Mexican-standoff scenario, usually broken by one of them getting hungry which can take a few hours. Eventually blame is assigned and a team is set upon it. Because staff turnover is so high due to the low salary, no one at the outsourcing outfit knows anything about some rancid bit of COBOL/REXX/RPL or if you're really lucky Java which is holding all this together. In a panic, only initiated after someone informs them that they are going to have to pay a hefty compliance fine, the management team start running around like headless chickens. Eventually they bump into someone they forgot to fire who can remember who the original engineers are who wrote this. Delving into an ancient HR database, they find the mobile number of the last guy who touched and call him. His widow answers and informs them that Bob died 3 years ago but his old colleague Terry is still alive and you might want to call him. They call up Terry who is on a golf course somewhere. Terry is concerned but not that concerned about the situation because he knew what a steaming shit show the org was and moved his money well away from it. Eventually the manager starts waving daily rates around meeting the "I can be bothered" level of interest. Terry finishes his game, throws the clubs in his car and heads into the office to look at it. After 3 hours of unsuccessfully trying to work out how to get Terry an account on the mainframe again without having to involve the outsourced helpdesk, which is currently down due to a huge mudslide, he sits at someone else's terminal and stares intently at the problem. He utters a few words, edits a few characters in one file and resubmits the job. Several minutes later, the phone lines stop ringing. All is good again, Terry made $1500 and the org only lost 2% of its customers compared to the 0% it should have lost if they hadn't outsourced everything.
Now imagine this in 20 years with Kubernetes!
[+] [-] unknown|2 years ago|reply
[deleted]