Current News & Issues

With Students 'Getting Ripped Off' by Wells Fargo

This has been going on for years and one of the main reasons there is so much student debt. This has not been talked about or addressed by politicians but allowed to go on like many other injustices in this country.

Debt

 

Wells Fargo has for years partnered with dozens of U.S. colleges and universities, opening on-campus branches and offering students accounts and debit cards as well as other financial products. The bank is far from the only institution to do so, with BankMobile offering more student accounts than Wells Fargo—but the bank charges its student customers far more than its competitors in annual fees.

"When granted the privilege of providing financial services to students through colleges, Wells Fargo used this access to charge struggling college students exorbitant fees," Warren wrote to Sloan. "These high fees, which are an outlier within the industry, demonstrate conclusively that Wells Fargo does not belong on college campuses."

According to a Consumer Financial Protection Bureau (CFPB) report (pdf) from last year, which examined relationships between nearly 600 colleges and 14 banks, Wells Fargo's student customers paid an average of $46.99 in annual fees—nearly four times as much as students paid to other banks.

"Students served by Wells Fargo are getting ripped off," Warren concluded.

The senator also took issue with the fact that low-income students suffer disproportionately from Wells Fargo's unusually high fees, considering they are more likely to overdraw their accounts. The bank has claimed that their fees are higher because "customers use their accounts in different ways," but, as Warren wrote, "it has provided no evidence that the students it serves have meaningfully different financial needs than students served by Wells Fargo's competitors that charge little to nothing in fees."

Warren also called on college campuses to cut ties with Wells Fargo, as their agreements with the long-troubled bank make them complicit in the mistreatment of student customers. The senator sent letters to the 31 colleges where the bank does business—including University of Arizona, several California State schools, El Paso Community College, and University of North Carolina—urging them to end the relationships.

Source

{{ message }}

{{ 'Comments are closed.' | trans }}