Barron’s: Banks Threaten Financial Websites

This could be potentially bad news for users of Mint and other similar services.

According to this week’s Barron’s, banks might be moving to restrict data flow that companies like Mint use to aggregate user’s accounts. Banks claim this is due to demands put on their network connections. I find this hard to believe, but it doesn’t surprise me that banks would say such a thing. As the article mentions, I think this is much more about competition.

This news doesn’t affect me too much because I don’t use a service like Mint. I have never been a fan of one company having access to all my account passwords and information.

Bank of America is a Joke

Below is the following note I received from Bank of America regarding our checking account with them:

Beginning on August 14, 2015, your Classic Interest Checking – Advantage Relationship account will change to an Advantage with Tiered Interest Checking account. The monthly maintenance fee for your Bank of America Advantage® with Tiered Interest Checking account will be $25. You can avoid this fee when you meet any ONE of the following requirements during each monthly statement cycle: Keep an average daily balance in your checking or a linked Regular Savings account of $5,000 or more OR Keep a $10,000 average daily combined balance in linked checking, savings, Money Market Savings, CD and IRA accounts OR Keep an outstanding balance on a linked installment loan or line of credit of $15,000 or more OR Keep total combined assets in eligible, linked Merrill Edge or Merrill Lynch investment accounts of $15,000 or more OR have a linked Bank of America first mortgage loan that we service.

$25 PER MONTH if you don’t meet their requirements!

We only have a Bank of America account because my wife’s car is financed through them. We have a had a checking account with them over the years because our mortgage was through them and we got a discount on the loan if we had a checking account through them. We have since moved, but still have the car loan and I’m using the checking account as a savings account for property taxes.

“At least it’s an interest-bearing account…”

Get this: their interest rate is a something like .01% (that’s 1/100th of 1%). One month we received $.03 in interest, but were charged a $3.00 check image fee for ONE check.

I cannot wait to cut ties with Bank of America.

WSJ: “Free” Checking Costs More


From today’s WSJ:

To avoid a monthly fee, bank customers in the U.S. must keep an average minimum balance of $723 in checking accounts that pay no interest—up 23% over last year, according to a new survey from data provider Bankrate Inc., which analyzed 477 checking accounts at 247 banks and thrifts. The average monthly fee on noninterest checking accounts rose 25% to $5.48, also a record.

Further down in the article, the author mentions that it costs most banks $250 to $300 a year to maintain checking accounts. Amazing that it costs that much especially with all the electronic transactions that go on daily. I also wonder if that figure is net after retail fees.

All these new fees are a direct result of dubious Frank-Dodd act. Thanks Frank and Dodd.

Are Housing Prices FINALLY Starting to Rebound?

The cover story in this week’s Barron’s is about the housing market.

Nothing’s wreaked quite the havoc on the U.S. economy, and indeed the national psyche, as the six-year slide in home prices. It wiped out some $7 trillion in household wealth, savaged bank balance sheets, and induced the Great Recession and the tepid recovery.

Yet there are unimpeachable signs that this national nightmare is now over. Home prices are starting to rise, if somewhat haltingly, in most areas of the country. And a number of forecasters predict home-price increases around 10% or so nationally over the next three years, with some metropolitan statistical areas, such as Midland, Texas, and Bismarck, N.D., likely riding the energy-exploration boom to better than 20% jumps in residential-real-estate prices. The turnaround, in fact, appears to be arriving exactly on the schedule that Barron’s laid out this year in a March 19 cover story entitled “Ready to Rebound.”

Of course, it’s not all optimistic…

TO BE SURE, any sustained recovery in prices faces some formidable obstacles. The “shadow inventory” of residences that are in some stage of foreclosure or whose owners are at least 90 days delinquent on their mortgages stands at 3.1 million–6% of the 50 million home loans in the U.S. In a normally functioning market, the total of distressed properties would be more like 2%.

Likewise, some 13 million homeowners are under water — meaning that their mortgages are larger than the value of their houses or condos. Although the vast majority of these people are current on their mortgage payments, many may be tempted to resort to a “strategic default.” This is particularly true in the event of a job loss or some other economic vicissitude.

And finally, the collapse in housing prices was so severe — nationally, residential real estate fell by over one third in value, peak-to-trough — that it would take at least a 50% jump just to restore prices to the nutty levels they achieved in 2006. Unfortunately, those were the prices at which many homes were purchased. So, for many, hope will be difficult to maintain in the years ahead.

This one quote from the article bugs me because it was this mentality that helped cause the housing bubble in the first place:

“We’ve clearly reached a key psychological shift in home buyers’ psychology, where folks are now starting to worry about missing the boat, rather than fearing whatever house they buy, no matter how attractive the price, can only go down in value,” [Mark] Zandi explains.

Interesting piece if you have the time to read it.

Sandy Weill’s Change of Heart

“What we should probably do is go split up investment banking from banking, have banks be deposit-takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,”

So Sandy Weill, the man who pushed hard for the end of Glass-Steigel when Citicorp and Travelers merged, is now thinking it would be best to break banks up.


My guess is that he won’t be giving back any of the money he accumulated in the lead up to the crisis that he helped create.

The above article closes with:

Thank you, Mr. Weill, for your courageous declaration. Why couldn’t you have made it a decade ago?

Exactly! Although, I’m not sure that this is a “courageous declaration” at this point in the game.

Also, while on google, looking for articles on this matter, I came across one that said Weill’s motivation may be that banks are worth more broken up. That would explain Weill’s change of heart.

Maybe this is Weill’s way of pulling the rug out from under Jamie Dimon, his protégé that he fired who went on to eventually manage JP Morgan Chase.

Busy Week This Week

This week is our church’s Vacation Bible School. This is my first year to help out. Anyway, I’m swamped in the mornings.

Lots of stuff going on this week. Front page article in Monday’s WSJ stating that JP Morgan knew of the their trading risks two years ago. Interesting.

Not related to personal finance but interesting anyway…

NY is contemplating on a wider food ban. Wow. Question: where does it end?

Donald Trump and his silly notion that Obama has a secret deal to lower oil prices in order to get elected. Be quiet, Donald. I have a feeling that the lower oil prices we are seeing are due to the somewhat negative economic outlook (look at what the stock market has/hasn’t done over the last month or so).

I hope to be back to regular blogging next week. Meanwhile, discuss amongst yourselves.

I Need Dick Durbin to Reimburse Me For My $15 Wells Fargo Fee

I was looking at my Wells Fargo account last night and noticed they charged me a $15 (yes, FIFTEEN DOLLARS!) account maintenance fee. I remember getting an email or notice about the new fees but wasn’t concerned because it seemed as though we met their ridiculous criterea necessary to avoid the fee.

I was wrong.

I emailed Wells Fargo and asked them why I was charged a $15 fee. I woke up this morning to this response (or part of it, anyway):

Thank you for contacting Wells Fargo. My name is Felicia, and it is my
pleasure to assist you today.

I understand your concerns about the service fee that was recently
assessed to your account.

The $15.00 monthly fee is waived on the Complete Advantage Checking
account when three or more additional consumer accounts and/or services
from separate account categories are linked to this account, and at
least one of the following conditions is met:

– At least $5,000.00 in combined deposit and select credit balances
(includes credit card balances)
– A $75.00 or more single monthly automatic transfer to a Wells Fargo
Savings account
– A linked Wells Fargo Home Mortgage

To determine whether this balance has been maintained, we look at the
lowest balance in the account during the statement cycle. Accounts
eligible for the combined balance waiver are checking, savings, time
accounts, retirement accounts, and/or outstanding balances in a personal
loan or line of credit, home equity loan, or equity line.

They went on to say that our account had dropped “slightly” below the minimum and that was why we were charged the fee. She did go on to say that she would reimburse the fee this time.

So, here are my options:

1. Meet the bank’s criteria on a monthly basis and not pay the fee. This idea is laughable because of the amount of money the bank requires we keep in our account and the very silly interest they pay (I believe our last interest payment on this account was $.09 (NINE CENTS)). Of course, no one else is paying interest so this is a moot point.

2. Pay the fee ($180 a year).

3. Change banks (Ugh! I hate this idea (and don’t think for a second that banks don’t know this)). We have a credit card, a checking account for us, a checking account for each of our boys (both teens), and three savings accounts with Wells Fargo—not to mention all the payments that are tied to our account. Besides, there’s no guarantee that whatever bank I switched to wouldn’t change their policies in the future.

4. Send in my account information so Dick Durbin can reimburse me. As far as I’m concerned, this is Durbin’s fault. He’s the one who insisted on the law that caps the swipe fees that banks can charge merchants. You take away a revenue stream from banks and they’ll figure out another way to make back that revenue.

We have been with Wells Fargo for a long time. I have never been disappointed with them. But, this $15 fee may change all that.