And why we didn’t do it earlier. UPDATED Jan 2013
Wells Fargo is likely the “great bank” among the big ones, with the highest integrity and the lowest tolerance for bad banking practices among the bigs. But if my experience is typical as I believe it is, that should scare us all.
In early 2009 Wells Fargo took away our business credit line without so much as a letter to tell us why – it just vanished from our online banking screen one night. They did this to every single small business account in America without regard to the viability of the business. The $25 billion in 2008 Federal bailouts to WF never trickled down from Wells to their clients. I personally know of many very healthy businesses that were destroyed by this single act, and tens of thousands were damaged for years after because of it.
IT’S ALL ABOUT THE BANK
When it happened, we showed our local Wells Fargo branch manager our perfect credit and they said, “Frankly, we took away everyone’s business lines with no regard for their credit. We just had to make our own balance sheets look better.” That honest Wells Fargo manager said their credit requirements had tightened to the point of being “ridiculous.” She’s no longer there.
Many business owners switched to using their personal credit lines and had their interest rates jacked up right AFTER using them, not before. We did this to see what would happen and sure enough, within a week our rate was jacked, too. All while Wells Fargo was receiving the lowest interest rates from the Feds in history and had lined their pockets with $25 billion in free bailout money that had no strings attached to it.
This is the great bank, the good one amongst all the bad ones. If this lack of integrity is how good one acts, what are the bad ones like?
In 2010 after more incidences of bad customer service, we told our Branch Manager we were leaving and were looking for a small local bank that wouldn’t make macro-decisions that ignored their customers. We also told them we would wait until our revenue was significant enough to make Wells Fargo stand up and take notice.
UPDATE – JANUARY 2013
We set up our one international business with a local bank in early 2012, not Wells Fargo. But our main focus is Crankset Group, which grew 392% from 2008 to Dec 2012, which has been with Wells for six years. They requested a meeting in December to introduce us to four business bankers they now want us to work with, and told us we didn’t have to interact with the regular branch folks anymore. We’re special now that we’re big enough.
Our growth and the complex merchant account changover required is making it hard to invest time in changing banks. But we’re committed to doing it before the end of 2013. We are thinking of hiring a marching band when we do. And when we meet with Wells Fargo to close out, we hope they’ll learn from our experience, but based on their disregard for us as a client until we were “big”, we’re not holding our breath.
Do the small banks do better? Our experience with our other business is that they are much more better at paying attention and meeting our needs. And much less expensive.
2013 – MORE FEES – CHARGING FOR THE LOLLIPOP?
Pert of the 2013 update – we got a form letter from Wells Fargo yesterday, January 3, stating that they will now be charging their clients for cash deposits. They are now charging you to put cash deposits in their bank so they can make interest off of it. Mind-boggling, but not surprising.
In the same letter they outlined three other new fees, including charging their clients for transfers from Wells Fargo savings to Wells Fargo checking – $15 a pop to do that. My community bank will transfer to another unrelated bank anywhere in America for $7.50 and sometimes nothing. Watch closely – Wells is taking their cues from the airline industry. Next they’ll be charging to use their pen, and then for the lollipop.
Our lesson? Go local whenever possible. It’s not a panacea, but it can never be worse and more than likely a local bank, as with any local business owner, is more likely to pay attention because they live there, not in some skyscraper 1,000 miles away.
What’s been your experience with big banks/big business vs. small banks/businesses?