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Wells Fargo & Company Faces Scrutiny for Not Refunding Money Owed to Paid Off Car Loans Early
8:32 AM ET, 08/08/2017 - MT Newswires
08:32 AM EDT, 08/08/2017 (MT Newswires) -- Wells Fargo & Company (WFC) dipped pre-market Tuesday after the New York Times said the company is facing new regulatory scrutiny for allegedly not refunding insurance money owed to customers who paid off car loans early.
The bank also reportedly failed to refund the insurance money to customers whose cars were repossessed by increasing what they owed, PYMNTS.com said.
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And yet it's still a core holding in various Parnassus accounts. How bad does Wells Fargo's "G" have to get before Parnassus feels their "ESG" investing philosphy has been violated, and finally drop it from their portfolios?
https://www.nytimes.com/2017/08/18/business/wells-fargo-loan-auto-insurance.html
I've always felt banks didn't need to "rob" people because, in a sense, they can "steal" legally (fees and exhorbitant interest rates). Guess for WF that wasn't enough. Sad commentary on the financial industry.
>> no assurances that any other bank will not soon be in the news about a scandal.
not like this one
The one where I bank, for example, sponsors many community events, several of which benefit the food bank, homeless shelter, etc. The mega-banks in this town do NONE of that.
I still have a place holder account at WF for access to the free stuff and also because all of my automatic bill payments and such have been lined up through them for years. A little bit of lazy and more of too many other things to do keeps me there for now.
BTW, one that all customers can take advantage of is BofA's "Museums on Us" - free admission to some museums across the US on the first weekend of every month. Just show some BofA or Merrill Lynch card (debit, credit).
I dug up an interesting law review article (1995) on charitable corporate giving. Clear writing, but long and one probably had to enjoy legal history to read. Encapsulating some of it ...
It used to be that corporations could only make charitable contributions if they derived a direct corporate benefit. A corporation's "sole ... task was to maximize profits" performing the business it was chartered to do.
In these "olden days", a corporation was allowed to fund a university chair under the theory that it got a direct benefit - the students educated might wind up as employees of the company.
Before 1935, tax laws didn't permit corporations to take charitable deductions (only individuals could). But corporations could still write off these contributions as business expenses - since they derived direct benefits.
Current tax law says that corporations can deduct charitable contributions only if they do not derive direct benefits. Today, if a corporation funded that same university chair, it could get a charitable deduction because the current thinking is that the corporation would not be deriving a direct benefit. Same donation, different treatment.
Which gets us back to Maimonedes. To move up on the scale of giving, a gift must be anonymous, i.e. not to enhance one's reputation. IRS aside, these corporate contributions/sponsorships are clearly for the purpose of deriving direct benefit. I'd be more, well, charitable in my view if corporations made these donations because it was the right thing to do, as opposed to having something they could attach their name to.
I myself can regularly tell the difference b/w actual ads and corporate sponsorships even at their most backpatting. Having worked on both sides of that transaction, I don't begrudge 'brought to you by a generous grant'. Recipients typically have guidelines on how much backpatting is allowed in the 'ad'.
Now, try and imagine the state of the arts, of public broadcasting, or medical research, or a vast range of other good works, if all funding had to be anon and without direct benefit. That seems libertarian beyond most libertarians.
It is, however, wonderful to read the phrase 'right thing to do' this week, and this year.
Though somewhat dated, here's an interesting analysis of some megabanks' generosity:
National Committee For Responsive Philanthropy (Dec 2012), TAKE AND GIVE, The Crimes and Philanthropy of Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase
"In short, the giving of BofA and Wells is mediocre; that of JPMC is disappointing; that of Goldman is miserly."
That was the conclusion in terms of dollar amounts as percentage of revenue. When the quality of contributions was analyzed (e.g. how much went to marginalized communities), BofA looked even worse (see Figures 2 and 3 in the report).
The Worst Banks in America (Wells Fargo Isn’t Even No. 1) (9/23/2016)
"Factoring in complaints, penalties and responsiveness to customer problems, the worst bank is Bank of America, according to a report from consumer finance site ValuePenguin"
24/7 Wall Street's Customer Service Hall of Shame (Marketwatch, Aug 23, 2016)
Bank of America is worst bank on the list (#4), with Wells Fargo at #9.
10 U.S. Companies Employees and Customers Really, Really Hate (Jan 23, 2017)
24/7 Wall Street combined customer satisfaction (from its own survey and from JD Power) and employee satisfaction (from GlassDoor), to conclude that Bank of America was the second most hated company in 2016, behind only Comcast. Wells Fargo came in fifth.
Even on banking metrics ("10 measures of financial health related to growth, profitability, capital adequacy and asset quality"), BofA falls nearer the bottom than the others of the "big four". It comes in 97th out of 100 largest banks while the others aren't in the bottom ten.
Forbes, America's Best And Worst Banks 2017
Pick a metric, any metric, and BofA is the bank to avoid.
I'm "not defending [WF] one way or the other, just sayin'" Personally, despite the numbers, I don't see any daylight between BofA and WF and wouldn't introduce either as a better alternative to the other.
https://www.buzzfeed.com/matthewzeitlin/the-wells-fargo-accounts-scandal-was-worse-than-we-thought
Not really related. However, I lightened up on DODBX early in the year - shifting a lot to RPGAX (both part of my balanced sleeve). Turned out to be a good move - but for the wrong reasons. I was fearful a rout in bonds would ding DODBX more than the other. Yet - a funny thing happened. During the short-lived period of rapidly rising rates last winter/spring DODBX actually started outperforming. What I had missed in my analysis is that the fund's heavy financial holdings (including WF and BOA) actually started rising along with the increasing rates.
The rise in rates reversed, however, and the fund is experiencing a lackluster year. Still, if you think rates will be going up, DODBX (and probably DODGX) might not be bad places to ride out the storm with their heavy exposure to the financials.
I'd rather be lucky than good.
Amen!!