Pardon me if this blog has a bit of a tone of resentment. Since the financial collapse in 2008, which was catalyzed by the unscrupulous practices of the nation’s largest banks and Wall Street giants, credit unions and their members have had to foot the bill. How? By the very costly regulations imposed as the result of their improprieties. Paperwork and disclosures have increased 10-fold and more staff has been needed to comply with the new regulations.
The clearest example is the Dodd-Frank Bill, the direct result of the financial collapse, and a law that drove up cost, added fees, and directly impacted credit union members. Credit unions didn’t cause the problem, but credit unions and our members paid the price for the sins of others.
Now how about the story that broke last week about Wells Fargo? To meet their goals for incentives, the bank opened deposit and credit card accounts without their customers’ knowledge. This resulted in their depositors incurring fees and overdraft charges for services they never requested. As a result of what bank regulators called “widespread illegal” sales practices, Wells Fargo has been fined $185 million and is now under a “consent order” to settle civil claims and make restitution to their customers. And 5,300 employees have lost their jobs.
Wow! How much income is enough? What is the limit of what will be done for a buck? And who will ultimately pay the price for this egregious violation of trust? We certainly should expect the loss of 5,300 jobs will help cover the cost to the stockholders. And bank customers should watch closely for the possibility of new fees or increases in fees. Someone must pay the price and maybe this time it should be the guilty. As for credit unions we are weary of paying the penalty for the behavior of the big banks.
Maybe the greatest penalty to be paid will be for depositors to move their accounts to a financial provider that can be trusted. Credit unions are not in business to make huge profits. Our purpose is to serve, not exploit our depositors. It’s a great time to tell friends and family about the benefits of using a credit union. We won’t let them – or you – down.