3% of all business owners make 84% of all private biz income. Why? They’re not covering for unknown weaknesseses.
Why We’re Leaving Our Giant Bank.
And why we didn’t do it earlier. UPDATED AUG & DEC, 2011
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This article was published on June 24, 2010. So far, 9 people have left their thoughts. Share your own thoughts.
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.
UPDATE – DEC 19 2011 – More Reasons
We’ll be leaving Wells in the next couple months. I’m looking to hire a marching band and put it on YouTube. Anybody want to march with me?
We’re transitioning to Colorado Community bank for our quickly growing business bank (we’re on four continents now). They have done many money transfers for our business to American banks and African banks (Tanzania, Congo, Kenya, etc.) They will do a transfer w/ an email and a phone message from me.
After 20 yrs at one location, Wells makes me come in person to do transfers. Last week I watched as they spent 45 minutes attempting to do a transfer to Colorado Community Bank one mile away. Four “experts” got involved. The next day they had sent the very large transfer twice and charged my account for an overdraft. Five days later it still isn’t corrected. I’m rich.
While there, I also had them do a transfer to Tanzania – they felt very confident. Two days later they left me a voice mail telling me it never left Wells Fargo.
UPDATE – AUG 20, 2011 – More Reasons
As you see below, in 2009 we got no notice when they yanked every small business owner’s business credit line, or when they jacked up the personal credit line interest rates from 6.25% to 11.25%-21%. But today we received a five-page letter trumpeting a drop in the interest rate on our personal credit line by 1/2%, even with an option to decline.
ORIGINAL POST FOLLOWS
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 day.
They did this to every single small business account in America without regard to the viability of the business. The bailouts never trickled down.
IT’S ALL ABOUT THE BANK
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.
This is the great bank, the good one amongst all the bad ones. If this lack of integrity is the good one, what are the bad ones like?
OUTTA HERE
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.
We grew 42% in 2009, 65% in 2010 and are on track to grow another 70% in 2011 and go international [DEC 2011 UPDATE – We’ve expanded from the US to Asia, Africa and Europe this year].
Now that our leaving will be noticed, we’re looking for a small local bank [DEC 2011 UPDATE – Colorado Community Bank]. When we meet with Wells Fargo to move our growing account we hope they’ll learn from our experience, but based on their disregard for us as a client, we’re not holding our breath.
Will the small banks do better? We think so, but we certainly think we’ll have a better chance as a big fish in a small pond.
GO LOCAL
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?
Add Your Own
Thoughts
Michael Bolton
10/24/10
I was a customer at Chase Bank (and a couple of financial institutions that it purchased) for 15 years. This spring Chase dropped the limit on my credit card. The reason given was that it had nothing to do with my (superb) record as a customer at Chase (they said this explicitly). The reason given was that the credit rating agency had downgraded my rating because they couldn’t see sufficient purchases of goods or services in the U.S. I live in Canada, and my credit rating could likely beat up the credit rating of most of the people who work at the bank or the credit rating agency. Both organizations had every opportunity to evaluate my Canadian credit record and assets. They didn’t do that, doubtless because they see me as an account, rather than a person; as a model, rather than a customer. And because Chase prefers to delegate its trust, rather than look at its own experience with specific customers.
So, Chase will have to do without the several hundred dollars a year in revenue that I’ve been providing to them. Oh well.
Michael B.
10/24/10
Chuck-
We moved from Wells Fargo to Academy due to Wells Fargo Playing the float with my dime on out of state checks. They would sit on checks and electronic transfers five- seven days. Acadamy deposits checks into my account immediately once a check from that customer has ran through the system previously. Don’t have anything but a bad taste in my mouth from Wells Fargo
Grant
10/25/10
I don’t bank with a local bank, but I do bank with a smaller bank. This is another tactic that has made my (and my business’) financial life a little better. The smaller banks (local or not) are hungry for more business and act accordingly.
A New Generation
That said, I’m also really excited about a new generation of bankers and banking tools. A new company like BankSimple (currently in development) wants nothing more than to upset the current system in ways that help out consumers. Or, take a look at a savings tool like SmartyPig. They make it easier and automatic to save toward a financial goal and pay out a higher rate of interest than any big bank checking or savings account that I’m aware of.
Megan
10/25/10
I’m a mortgage lender and think your decision to move your business is highly respectible. Banks are treating consumers like bothersome flies, rather than valuable assets. Undoubtedly, there are people who have not been responsible in paying back their debts, but it seems as though our banks, and our government correct that problem by dumping everyone into one category. Try Colorado Business Bank-have heard great things.
Pam
10/27/10
Local banks care and performance proves it.
Dave Riebe
10/28/10
I used to live in the central mountains of Colorado for seven years,2000-2007 and I worked for Wells Fargo and I would say that they quite simply suck.You might try Credit Union of the Rockies,a smaller institution that seems to care.I`m still a customer.
Rich Anderson
11/24/10
Elevations Credit Union!
Chuck
01/16/11
FYI to all,
This is not a dead or dormant topic – been working on it as much as I can. Frankly it’s been hard to get a list of locally owned banks. ShopCity.com is working on solving that one city at a time.
We’re doing a lot of Crankset Group facilitator training this month and after we get back from NZ in early March we’ll pick this up with fervor. Would love to cause a national stir and movement in the direction of banks that truly work with small business, not just talk about it.
Stay tuned.
Ric Reifel
05/23/11
Well, we had just the opposite experience! After trying to bank with a local bank, we went BACK to Wells Fargo because frankly they seem to understand business better, and they have FAR better online systems. Now, we may not stay with Wells, we are looking at US Bank also, but local banks have just been a bit to small minded for us. I have heard the same from others, so just watch out before you leap!!!
Tighter credit and more oversight were the biggest issues we had.