I feel so much cognitive dissonance realizing that there are hard working people literally losing their home and shelter wrongly while I might be sitting across from them at any time, expecting them to behave within normal social boundaries.
Imagine a family with a new born, working 50+ hours at a physically demanding job, making $80k/yr combined, and then losing their home for no reason... and then being expected to do everything else right while dealing quietly.
Incidents like this make it easier for me to understand "protest voting" against the system politically. Not sure of constructive ways to prevent this more broadly.
I can’t even afford a home right now on a tech salary with sky high rent paying off my landlords 2% refi’d mortgage and student loans making it impossible at 6-7% fed interest rate hikes and inflated home prices after the insane COVID housing price bubble increase.
I feel like life won’t start for another 5+ years for people like me, unless we gamble on being underwater on an inflated mortgage entering at the peak of the housing market paying more for a fraction of the home you could get just 1-2 year ago. You can’t even refi an underwater mortgage, anyone have anny advice for people in my unenviable position?
I don't mean to marginalize your frustration, but I feel like you may have unrealistic expectations.
First, you have a tech industry salary, which is probably at least twice as much as the median wage, if not more. Not only is it white-collar work with practically no risk to your physical safety (assuming you exercise, eat right, etc), but monetarily this puts you _way_ ahead of most people right out of the gate.
If you literally can't find a home to buy (assuming you want to buy one), then either you live in an HCOL area (in which case, owning property was _always_ a fantasy even among the highly-paid), or you aren't looking hard enough.
As a landlord, I can assure you that landlords have never gotten 2% mortgages on their properties, unless landlord==bank or some ridiculously well-connected billionaire.
Except for 2008, the housing market has _always_ been at a peak. Prices may flatline if we head into a (worse) recession but they are not going down to where they were again. You only options are to accept that and adjust your budget/income/location appropriately, or opt to rent forever, which is not at all a bad thing since owning a primary residence is never an investment. (Although there is room for nuance here that I won't get into.)
In the US, the vast majority of people _never_ pay off their mortgage until late in life, if all at. This is because the "normal" thing to do is to buy a house and "upgrade" two or three times until retirement. When interest rates were low, it didn't even make financial sense to pay off a mortgage because the money could be put to better use buying investments.
Even with my high-paying jobs, I didn't manage to get above $0 in net worth until I was about 40. I think that's pretty good in a society where an increasing number of people have to work their whole lives for a number of factors, not all of which have to do with wall street and a broken government.
I don't know your age, but it sounds like you're still closer to the beginning of your career. Either way, life has "started" for you already, it's happening right now, and it will be even better if you make a concerted effort to understand the world and your place in it right now, and figure out which decisions you need to make that will benefit you the most in the future.
Since you asked for it, my advise is to live well under your means, save aggressively, set goals, and never stop learning. If you want to challenge yourself, look into a concept called "early retirement." Good luck.
> Since you asked for it, my advise is to live well under your means, save aggressively, set goals, and never stop learning. If you want to challenge yourself, look into a concept called "early retirement." Good luck.
Ah yes, glamorizing the hustle. You'll surely make it if you just "work hard enough," wink wink. Working a 9-5 career is (and has been) a net negative ROI for at least 2 decades, if not more. To be completely honest, this is why I'm on HN: doing your own startup is one of the few relatively low risk gambles one can take.
Thinking that it's okay for an entire generation (millennials), scratch that, two generations, (also gen-Z now)—that literally can't afford housing where they work is beyond societally harmful. Birth rates will continue plummeting, among other things.
This is all happening because Obama didn't have the balls to just let the shoddy banks crash and burn, and we continued QE for around a decade to alleviate blowback from 2008. This, combined with other factors (a lax policy w.r.t. foreign investments in real estate), will screw us in the long run.
> This is all happening because Obama didn't have the balls to just let the shoddy banks crash and burn, and we continued QE for around a decade to alleviate blowback from 2008. This, combined with other factors (a lax policy w.r.t. foreign investments in real estate), will screw us in the long run.
It also happened because most of the FBI agents who worked on white-collar fraud prior to 9/11 were reassigned to counter-terrorism work afterwards, and so the rampant fraudulent appraisals and mortgages prior to the housing crash were never investigated, let alone prosecuted.
Contrast 2008 with the reaction to the S & L debacle.
This is an interesting take that I’ve never really heard before. It makes intuitive sense, but do you have anything more in depth to read on it? Book or article or longer version of the argument, or a history of some kind? Very curious, thanks.
Check out the Calculated Risk blog, where I learned almost everything I know about the events leading up to the Great Financial Crisis, and the GFC itself.
Not the original poster, but the book "The Best Way to Rob a Bank is to Own One" by William K. Black (former bank regulator during the S&L crisis) might shed some light onto the S&L crisis, if not 2008's comparative response, though not directly.
What the… dude, the bank bailouts of 2008 were signed by bush and co. And (as a dem) were absolutely necessary. Obama, if anything, just kept the machinery moving.
> [...] doing your own startup is one of the few relatively low risk gambles one can take.
I was under the impression that around 90% of startups failed. Was I mistaken, have the numbers changed, or do we just have very different thresholds for "low risk"?
I have started a number of businesses, even what I considered the unsuccessful ones still made me more money than I would have made at any 9-5 I could have had at the time. You just have to be willing to do something boring and compete against businesses that aren’t currently being run well. Starting the 7,000th craft beer company is gonna be really hard but (for example) being the #1 powerwashing company in your town is boring but way more lucrative
What makes you think being the #1 powerwashing company is going to be any easier than making an equivalent amount of money in the corporate world? Do you have any reason to believe you are better at powerwashing than the other 99 guys in your town?
The point is to pick a boring business where it’s easy to become #1 in a market based on current competition, clientele, skills, etc.
In the corporate world you are still trading your time for money. When you own a business you decide what and how much you want to do, up to and including nothing at all while still making an income. Boring businesses make it easy to hire people to do the stuff you don’t want to.
There’s no such thing as a business that’s both lucrative and trivial. To the extent that you need finesse, hard work and luck to build a successful business, the same combination of finesse, hard work and luck could land you an equally or more lucrative corporate job.
You can also make passive income by investing your large corporate salary and earn extra income without working. There’s no such thing truly passive, zero labor
income when running a business, there’s always some managerial overhead even if you delegate as much as possible. Index funds are truly 100% passive.
Not true. You hire a CEO if you really don’t want to do anything. And it is a lot of work but usually nothing that difficult for straightforward businesses.
That's a pretty low bar, though. There are many different levels of struggling but I don't think it is productive to deny challenges of someone just because they are better off than some others.
Do you mean “struggling” as in “I can’t provide myself with food and shelter” or do you mean “I can’t put little Johny in private school and buy the 3500 square foot house in the burbs and go on nice vacations twice a year”?
High failure rate ≠ high risk. Everything with a high upside will have a high failure rate, but working 10 hours on your own startup a week is definitely lower risk than gambling with options (which is what /r/wallstreetbets is doing) or gambling with crypto (even higher risk).
I know people that made low 7 figures last year flipping NFTs, but the risk profile (to me, at least) was untenable. At least in Vegas you get free drinks.
That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down). We like to pretend that the /r/wallstreetbets or crypto people are crazy, but most are median earners that feel that there's no way to break out without gambling. When we look at the housing situation, most are sadly right.
What do people want? To marry a cute girl, buy a house, have a few kids, retire, go fishing; if they get that big promotion maybe even buy a boat. But this life is simply not attainable today.
> That's even more of a no-brainer, as an average 9-5 has practically zero upside, so your net worth is likely to stay flat (if not even go down).
The average millionaire is just a schmuck with a high paying 9-5 job. Doctors, lawyers, engineers, generic corporate drones etc. I don't know where you got the idea that it's impossible to make more than a subsistence wage with a W2 job but you are wrong.
I mean, you already probably know this, but the risk profile of a startup that fails is not that you keep your money constant. It’s that you’ve been spending it all on rent and utilities for the last 7 years and have nothing to show for it. You’re still gambling away your savings, at a much slower and controlled rate, and the house at least doesn’t have the advantage over you, but it’s still incomparable to the risk profile of a 9-to-5.
Yep, a 9-5 has no risk, but no upside. In my humble opinion, a startup provides the best "balance" between risk and upside for those of us that come from lower or lower-middle class. I think your 7-year example is a bit contrived, since (barring exceptions like biotech, space, etc.) if you're working on a project for more than 6 months without product-market fit and/or growth, you're doing something wrong.
I think think that is borderline dangerous advice. Most people don't have the mindset or proper understanding of the startup world. On avg if you enter the startup space you are going to get chewed up and spit out and find yourself looking in the mirror at a middle age face with nothing to show for a lifetime of work.
I personally find trading crypto to be lower risk than options trading. They have options-like returns, but without the theta decay - you have a longer time period to be on the correct side of the market.
If done right, such a failure only impacts the investors, and anyone who took stock instead of a proper wage. The savvy founder pays themselves a salary high enough that they are totally in the black long before the bank arrives to repo the furniture.
> To be completely honest, this is why I'm on HN: doing your own startup is one of the few relatively low risk gambles one can take.
This take is relatively…naive
Most startups fail and you would be much better off “grinding LeetCode and working for a FAANG” (tm r/cscareerquestions).
That’s just like people “starting their own business” and buying a franchise where their net profit is less than $70K a year and that’s only after the owner works 60+ hours a week.
I disagree on a number of levels, but especially because big tech valuations were propped up by QE over the past 10 years, Tesla being the poster child there. But Amazon, Google, etc. have all been impacted by macro elements. So that “TC” people brag about has been heavily subsidized by the FED.
The irony of calling me naive when not even understanding macroeconomic effects is… something.
Even with todays valuations of FAANG stocks I can guarantee you that the standard new grad gets a better offer than you will statistically make starting your own company.
So an important point that people seem to be always ignoring in the housing discussion is that of the boomers, and I don't mean as in "the boomers bad they screwed us" sense. I mean in a demographic sense.
The boomers were the largest generation of Americans and also are close to retiring or starting to retire, at the same time their children's children are entering the workforce, all of which were still relatively large demographics. This has created a temporary situation where we have a lot of people currently in the property market, because the boomers haven't quite retired and left their homes at the same time the millenials and zoomers are entering the market.
In another 10 years as the boomers begin to move to retirement homes, and assisted living centers, and die off (the move to sedentary office work along with poor dietary habits led to this) we'll see the pressure on the housing market ease as the massive generation currently occupying homes, the boomers, cease to occupy these homes and put them back into circulation.
The biggest risk in this case is that investment firms, such as Goldman and Berkshire try and steal the housing without ever intending to release onto the market.
If that happens I would say "reasonable men [will end up doing] unreasonable things", Madame Guillotine becomes a popular political figure, and trees start getting watered and “Wo unto them that join house to house, that lay field to field, till there be no place, that they may be placed alone in the midst of the earth!”[1]
> The biggest risk in this case is that investment firms, such as Goldman and Berkshire try and steal the housing without ever intending to release onto the market.
Pretty sure this is actually already happening at a furious pace — PE firms, right? In fact I’m pretty sure I’ve read HN threads about it.
I'm a millennial and have been a homeowner for seven years now. I had average, if not below average, credit when I bought the house and I had no downpayment (i.e. I wasn't coming in strapped).
It sounds like I'm an extreme edge case, but I really don't feel that way. I have several co-workers in the same age range who also own property. The details being recapped in this thread are very foreign to me, so I feel like this must be a geographic issue and not a generational issue.
A lot of my older millennial friends have paid off their houses in the last year or two.
Here in the Midwest (Pittsburgh), it’s not unusual if you’re fiscally responsible on even a single developer salary (2022, $120-200k) to both have bought a home and mostly paid it off especially if you bought within the last 10 years before the pandemic so we’re talking $140k-285k for a 4 bedroom, 3 bath, garage with yard and finished basement depending on your neighborhood preference.
The housing market was significantly different 7 years ago[1]. I'll agree that if you bought in your 20s as a millennial, you're in a much better position. Impossible to replicate that today though.
// You'll surely make it if you just "work hard enough," wink wink. Working a 9-5 career is (and has been) a net negative ROI for at least 2 decades, if not more.
Counterpoint - tech professional about 20 years out of college. Just bought a house in a nice suburb of NYC and all my neighbors are likewise working professionals. Some are in medicine, some in tech, some in things like construction management and education.
So seems like there is plenty of people for whom working has paid off.
Or to say it another way, who do you think lives in all these houses? Boomers and Russian oligarchs?
I mean you’re a gen X-er, it makes sense that you have zero idea what people that graduated college in 2008 went through. For context, people that had degrees in comp sci were working as Best Buy’s Geek Squad.
On the bright side, you timed the dot-com dip perfectly!
I am literally responding to your comment about negative ROI over the last 20 years. I graduated college on 2003 so that describes my timeframe exactly.
If you aren't talking about genx then what is your 20 year comment about?
> makes sense that you have zero idea what people that graduated college in 2008 went through.
Eh, I'm someone who graduated high school around that time and have a similar experience. Many of my peers have houses and work well paying 9-5's and have families and save for the future. They don't live in San Francisco though. There's plenty of homes for sale and tech jobs in markets that aren't Manhattan or Silicon Valley.
I graduated high school and lost all my college money from the 2008 recession. Yet here I sit as a home-owner for seven years now. I don't project my experience on my entire generation, and I would expect others to do the same.
I graduated then, from a smallish state school, with a degree in CS. Everyone in my graduating class got a decent to great job right out of school. You might be able to find individual examples of failures to launch but in the vast majority of cases it’s simply not true that CS majors went to Geek Squad.
Their point is that you don’t have to sacrifice in order to get where you need to be. I’ll let you and anyone else reading this comment decide how much sense that makes.
If the government had let the banks crash in 2008 the economy would be in a much worse state today and everyone would be a lot poorer. Foreign investors hold a vanishingly tiny fraction of the real estate in America and are not responsible for whatever economic ills you are projecting onto them.
You've chosen to believe a lot of incorrect things in service of your ideological commitments. You should learn to distinguish between things that are actually true and things that you want to be true because it would validate your politics.
If you think housing is nuts, wait until you hear about childcare!
That said, you turned on the prior poster for basically saying “set a budget” — that’s not “glamorizing the hustle” that’s “live with intention”.
Sure, millennials and gen-z can’t afford housing in LA — but basically the only generation that widely owned property is the boomers, and that corresponded with insane labor scarcity (thanks, WW2) and the era before housing moratoriums.
Want more housing? Vote against laws restricting housing. Or, move to where housing isn’t restricted. There are tons of millennials and gen-z buying property, it’s just not in SF, LA, NYC, Seattle, or Portland — those metros have spoken, and they’re 100% invested in not letting newcomers in unless they’re very rich.
> First, you have a tech industry salary, which is probably at least twice as much as the median wage, if not more.
This is exactly his point. If he can't make it with what he has going for him, who can?
> You only options are to accept that and adjust your budget/income/location appropriately, or opt to rent forever, which is not at all a bad thing since owning a primary residence is never an investment. (Although there is room for nuance here that I won't get into.)
You only list two options: (1) budget better, (2) give in to renting forever. I agree that, if the above poster wants a better shot, he should do his best to budget well. However, he should also help support policies that tax the dickens out of people who own more than their primary residence and maybe 1-2 other properties. There is more at stake here than just his own situation.
Great, yes. I do that too. Also, I live somewhere that falls well below my salary (COL wise) and I live beneath my means. I don’t live poor or poorly, but I don’t live like a hundred-thousandaire like we all used to see around 2008.
There is happiness and fulfillment to be found in a very reasonable dedication range. I work, like WORK work barely 5 hours a week from home and make $300k a year. My company is over the moon with my contributions.
I didn’t graduate last year. I put in the work, learned the craft and I have valuable contributions to give from my experiences. You will too someday. But right now you need to learn.
> This is exactly his point. If he can't make it with what he has going for him, who can?
Presumably they are living in a HCOL area, so definitely not indicative of life in America in general.
I know a few folks who live in the mid-west (typically derided as "fly over country") who have blue collar jobs making $70,000 who bought a house in their twenties.
You're not going to get too much sympathy from them when you're making 3-5x their salary and complain you can't afford a $1.5M single family home in the most expensive cities in the US.
> You're not going to get too much sympathy from them
Why not? That someone makes much more than someone else and endures a higher cost of living does not establish anything other than that the people who work those kinds of jobs want to live in those kinds of places (or the companies want to be there but it is hard to disentangle the two). Lack of sympathy because someone is in a different situation seems somewhat course considering that there are problems which either party does not experience but are objectively bad and should be remedied. Because they are different does not mean they are less impactful to quality of life.
> Because they are different does not mean they are less impactful to quality of life.
No, sorry.
Both might be "struggling", but there is a massive difference between "I make $500,000 per year and can't buy a $3M home" and "I make $60,000 per year and can't afford a $300,000 home."
The person making $500,000 per year in another stratosphere of economic wealth that someone who makes $60,000 can't even fathom.
It's like someone who makes $1M per year complaining they can't afford a private jet. Sure, they are experiencing an "impact to their quality of life", but no, it's nowhere close to the same situation, hence they get no sympathy from people who have actual financial difficulties.
Comparing a home to a private jet is not valid. Of course life in HCOL areas is 'better', that is one reason why they are so expensive, but to compare someone who cannot afford a home in the city they work in with a millionaire ($500K/year is kind of ridiculous, I think $100 - 300K is more realistic) is not fair. Please open your mind a bit more and consider that treating people without sympathy tends to get you no sympathy in return, and I would wager mid-westerner's could use some as well.
> the people who work those kinds of jobs want to live in those kinds of places
In other words, rich people get to live where they want. They get to live in the cool places with good schools and nice houses far from the freeways and toxic waste dumps and with lots of interesting things to do. Poor people have to make do with whatever is left over.
what about people that dont pay taxes i.e. every other chinese, saudi, indian, russian, EU and LATAM millionaire that owns several properties in miami, orlando, nyc, LA, dallas, houston, phoenix, etc.
What about banks and REITs that are passthru entities for the same folk above ?
What about SV out-of-staters that don't pay state taxes but work remote at places like LV, Salt Lake, or Boise ?
You want to fleece your own... but others you let just... walk in ?
> You want to fleece your own... but others you let just... walk in ?
I don't recall the person you replied to mentioning that. Why is it impossible to levy property taxes on real estate in your own state from people who live somewhere else?
Its not impossible. That's not the point
What i mean is real estate taxes as they are today are not a factor to seriously dent foreign or corporate wealth from vacuuming all properties available.
10k year in property tax is a pittance to a Sheik, a shenzen factory owner, an indian tech entrepreneur, your average venezuelan govt bureaucrat, or a REIT.
10k is not peanuts to the average wage earner in the US.
The former all buy in USA to keep their wealth safe from confiscation and leverage the US justice system and FDIC. Because back in their home countries they are 1 election away from communism or a bank collapse.
We have no adequate means to raise the cost of entry for them, and mentioning change to favor local purchases, is almost taboo.
Meanwhile, we say "tax the rich" here. Yet foreigners keep loading up on real estate and US citizens end up renting forever..
This is a pretty shallow argument. Americans should be glad that foreign citizens are funding housing because it means they can build more housing with that money. It is Americans who get to choose whether to build more or not and they have decided to instead block new housing.
Great. Now retired grandma , who happened to buy a house in a forgotten part of town that suddenly became a bohemian mecca, is stuck with high taxes. She can't move because she doesnt know how to drive and can't take a bus in the suburbs...now must pay half her retired in come due to land value taxation.
This literally describes 2 people I know.
Grandma didn't do anything to you or me.
Why would you punish granma who just want to live out her retirement ?
Why not just go after the foreign demand to hide cash, making housing expensive for everyone else ?
For every "retired grandma who happened to buy a house in a forgotten part of town that suddenly became a bohemian mecca", I can show you dozens if not hundreds of grandmas who already got pushed out of town because of skyrocketing rents - thanks in no small part to your homeowning grandmas stubbornly insisting on living in a single-family home in the middle of Downtown, on a lot that could and should be housing dozens or hundreds of households.
And I haven't even begun to dig into the socioeconomic safety nets like citizens' dividends that a land value tax could readily fund, thus producing a negative tax burden for all renters and the vast majority of homeowners.
Why would you punish those hundreds of grammas who just want to live out their retirements? Not to mention the thousands of working Americans who just want a place to live that doesn't entail multi-hour-long commutes?
> She can't move because she doesnt know how to drive and can't take a bus in the suburbs
There are these things called "moving companies" which would be happy to move her and her stuff into an apartment nearby. With the hundreds of thousands (if not millions) of dollars in equity she's accumulated due to her property appreciating in value, she can almost certainly afford to hire such a company to move her and her stuff. With LVT motivating the construction of said apartments to amortize said LVT across as many tenants as possible, she will have no trouble finding a new home - and the denser urbanization would mean that the grocer and pharmacist and GP and such would be right around the corner instead of involving a half-hour bus ride through sprawling suburbia.
> Why not just go after the foreign demand to hide cash, making housing expensive for everyone else ?
Because that is far from the only cause of housing shortages. You could play whack-a-mole with ad hoc taxes specifically targeting foreign investors and domestic investors and property management companies and Old Money billionaires and wannabe AirBNB moguls and agricultural conglomerates and commercial/industrial landlords and everyone else directly profiting on the very land speculation driving costs of living through the roof... or you could just tax land value, and thus address all that in one fell swoop with a tiny fraction of the bureaucratic overhead and with countless social and economic benefits on top of that.
Do you have a sense of how many properties are owned by folks from other countries, as a percentage of the total housing stock? The national association of realtors[0] put out a press release saying their purchases accounted for about 1.6% from April 2021 through March 2022, however it's not clear from their figures whether that is all existing homes or a mix of new and existing. If that is right that doesn't seem too bad, at least for a year. Dunno what the total ownership stats say.
> You want to fleece your own... but others you let just... walk in ?
Sorry for the late reply...
No, I don't want these people to just "walk in."
I support BTFO'ing all of the above people with punitive taxes.
I might give the SV bros a pass if they only have one house that is their primary residence or maybe one other place. It's the people (and organizations) who have many properties who frustrate me.
Because he wants to freece people that mostly work and do productive things for a living, and meanwhile (some) randos come to the US with stacks of cash derived from US foreign aid, from selling copycat goods on amazon, from selling govt offices in their home country, or with wads of cash from straight up corruption / criminal activity... and they get the white glove treatment.
A non-us citizen real estate tax (in the style of NZ) is like the 3rd rail of politics. God forbid anyone daring to mention a ~200% FV tax on any residential property purchase by a non-us citizen.
(I live in London) You didn't save til 40, now own multiple properties? Yeah our generation can't do that. While having a high paying job is great, it usually comes hand-in-hand with HCOL and obscene local property prices, meaning you have to either a) move to and live somewhere else (work remotely?), b) have to settle for living somewhere basic for a few years, c) rent forever.
That decision really sucks. Previous generations didn't face this. Yes of course, we have to set our expectations accordingly. But some acknowledgement from people like yourself who got started in easier times, and didn't actually go through this, would be appreciated.
Is it really true that previous generations didn't have to sacrifice to buy homes? That seems patently false to me.
First, previous generations were significantly more thrifty which meant more cash on hand. Don't believe me? Let's say you save 30 bucks a day starting at 20 (most of us can easily do that by controlling how much we eat out) - that means you have 110k in your bank for a down payment on your 30th birthday (ignoring interest). How much of the current generation thinks that way and cares about saving 30 bucks a day?
Second and perhaps more obviously - our parents generation and their parents traded off affordable housing for long commutes. They weren't buying 3 bedroom apartments on park avenue, they bought 3 bedroom houses in the burbs and commuted an hour+ each way every day.
Compare to that, your options of working remote or living somewhere basic for a bit sound obviously better.
If you aren't willing to trade off what you want long term for something you can give up now, you won't have anything. And neither would anyone in a previous generation.
Okay. You now have a harder time at being accepted at the highest paying companies because you didn't graduate from a select few universities. Hell, in law, most companies where you can really earn a good wage don't even hire outside of harvard.
Ok, if you get into Harvard, go to Harvard. Your opportunities in the long run should outweigh any sort of student loans you have to pay back. If you're going to NoName Private College that's 90% of the cost of Harvard, go to state school instead.
And apply to scholarships. Lots and lots of scholarships.
So a 4 year degree is on the order of 30k, aka what a lot of people pay for one year on campus. That’s pretty easily achievable on entry level salary (I know, work while you’re in school, le horror). Even if you have to take loans the whole way that’s a car note.
Are there people who this is out of reach of? Yes. Would it be cool if it were free? Of course. Is it crippling debt that makes a comfortable life impossible? Don’t be absurd.
Don't forget that until about the mid 90s most people were only buying with one income. And even into the 2000s that second income was often significantly lower.
So that graphs never align that well when you look back and try to say 'in the past it was 3x salary for a house, now it is 6x'
That is as buyer are now competing for houses with two good salaries to buy with.
To add to this, the low interest rates have added the ability for these joint income purchasers to bid higher to win the property they want.
In the UK at least, the move has broadly been in line with the 3x joint salary with mild adjustment for increased borrowing opportunities, but largely driven by the increase in joint salary.
$30 a day is almost $1000 per month, that's completely unrealistic for 90+% of under 25s, most people don't hit that kind of saving power til they are 30. And I don't see any evidence in your post that previous generations did that? My parents certainly didn't, they started saving at 30 on teacher's salaries and bought a house three years later. That house (in Cambridge, UK) is now worth £800k, I can't afford that, despite earning far more than their salaries at retirement put together.
We are not talking about "90%+" here. This thread is in response to someone who "can't afford a house on a tech salary." Tech comp has been over 100K/year out of college for a while now, and even on somewhat less you should either be saving a ton or have much fat to trim in your expenditure.
It is true that good money can be made in tech, and that some companies pay > 100K/year out of college, but it's worth pointing out that even in the US this isn't true in general or in the majority of cases. There are a lot of people in tech making less than that even years out of college - it's largely a function of where you live and whether you land your first job at a handful of particular companies.
> Tech comp has been over 100K/year out of college for a while now
The vast majority of IT work in the US pays around half that.
Even taking that figure at face value...
> or have much fat to trim in your expenditure.
Yeah, fat like exorbitant rents that landlords keep jacking up year after year solely because they have the power to do so. Fat like corporations charging more for less because they can get away with it. Fat like our federal government and the banking system it artificially props up debasing our currency and whittling away at the buying power of those dollars.
The fat to trim ain't in individual working Americans' budgets. The fat to trim is systemic - and by God are we overdue for some trimming, no matter how badly it might hurt the feelings of the ownership class.
OK well tech comp is very much not that high in the UK, so I guess we're not all in the same boat here. But the fact remains that things are objectively, numerically harder for us, and getting a lesson in life from those who had it easier is not very convincing.
I suspect the numbers would be worse if you looked at households instead of individuals due to declining marriage rates (but I'm not willing to put in the effort to find numbers).
I don't understand what you're saying. To me, if the rate stays flat but represents fewer married couple, then this same rate actually means more homes are owned by people of that age.
Meaning - if guy and girl are married and own a house together, that counts as 2 people towards home owner bucket.
If they are not married, they'd need to each own a house for the same rate to hold.
Where I live, I was fortunate to be able to borrow to purchase a very modest, poorly maintained house for $X, about 63% the price of a comparable reasonably well maintained house on the same street.
Five years later everything on the street is now $2.75X while my wage has increased by about 6% in that same time. Rents have also been going yo quite dramatically.
This is in a regional city of about 100,000 in Australia.
The idea that all you need to do is realign your expectations, and work harder, is embarassing.
Thanks for the thoughtful response. I mentioned 2% interest rates meaning in the <3% range. I know family who invested in real estate that trivially refinance to 2.85% on 30 year fixed mortgages with all the equity they had gained in their homes during the run-up in housing prices, 15 year loans were being redo’s to 2.25% all day as well. I’m sure you know this was a steal in the past few years if you are a homeowner in the past decade and gained major equity on your property.
I doubt we’ll ever see those low interest rates again in the next decade.
> [...] opt to rent forever, which is not at all a bad thing since owning a primary residence is never an investment. (Although there is room for nuance here that I won't get into.)
I suspect you "won't get into" it because you know full well that you're the one who stands to benefit from that advice, at the expense of the vast majority of everyone else.
I mean this as kindly and respectfully as possible: landlords - you included - are a large part of the reason why there is a housing crisis here in the US (and, from what I gather, other "developed" countries). Y'all buy up housing as investments, acting in a literal-rentseeking capacity and offering no value beyond maybe maintenance that tenants themselves could be performing (whether directly or by hiring the same professionals you'd be hiring). People like you are the ones who exploited my father until the day he died, who continue to exploit the surviving members of his household, who continue to exploit myself, my friends, my coworkers, my neighbors, all for that nice cushy "passive income". People earning "at least twice as much as the median wage" are unable to escape the rent treadmill because of people like you keeping them on that treadmill in the first place - not to mention having the gall to suggest that being stuck on said treadmill is "not at all a bad thing".
Out of respect for Hanlon's razor, I'm going to assume that you genuinely lack the self-awareness to understand how your income derives from economic parasitism; the alternative interpretation - that you are indeed aware of the externalities you impose on the rest of us, and yet choose anyway to peddle advice that's patently to your benefit and to the recipient's detriment - is far less charitable.
You're welcome for all that rental income. You can properly thank me and every other American stuck subsidizing you and your fellow landlords by selling your rental properties to your tenants - at the prices you paid, minus what they've already paid back to you in rents.
Obviously they are in a HCOL area, but you know whats worse than being underwater on a mortgage where you want to live? Being underwater on a mortgage in the middle of nowhere, where nobody else wants to live. I know plenty that got stuck in small towns in 2008-onwards servicing the debt on their home. Places that only were beneficiaries of broad speculative demand have the steepest price drops there is no real demand.
These are frightening prospects for people that want to play this game.
Approximately zero people participating in HN need to see this type of reply to a comment. I suggest you assume good intent in GP’s message and respond in a constructive manner.
Wrong; vastly more people need to see that type of reply to a comment. If landlords don't like the idea that they're actively robbing working-class Americans to the extent that said working-class Americans are decreasingly hesitant to respond to that violence in kind, then said landlords are kindly encouraged to, you know, stop robbing working-class Americans. Nothing stopping them from working an honest living like the rest of us instead of existing on our teat against our will.
Same here. I wasn't financially prepared to buy a house at insanely inflated Covid prices while interest rates were down in the 2% range, and I'm not excited to to buy a house at 7% while prices are still substantially higher than pre-Covid levels. Meanwhile rentals for anything other than a tiny box are just as expensive as a mortgage at those rates.
I don't understand how people who do not have 6-figure tech salaries are expected to have anything other than a poverty lifestyle when housing is so expensive.
I also don't understand these well-dressed young families parading around Boston and New York with their expensive baby carriages and $75k SUVs. Did I miss a memo on how to get rich at 30? Are they all going broke living like that? Did they all inherit a lot of money? Do they live in tiny apartments?
You would be surprised at how much family help those families often have. I’m not talking generational wealth. Often just upper middle class parents who saved prudently and did well in the real estate market who can afford to gift $500,000 for a house.
Good point, and I'm not personally so far removed from this same category.
But it's extremely disappointing and frustrating to feel like I personally will not be able to do this for my own children, despite having a higher income than most people my age.
I wish people would stop referring to 'pre-Covid levels'. We're never going back to that. At this point, it's been years. The government inflated away everyone's wealth & debt, what we got was rampant inflation. There is no 'undo' button on this.
All it takes to "undo" it is for inflation to slow down (already happening/happened), and wages to increase a little faster than inflation. A few years of that, and it will effectively be as if never happened (in aggregate, anyway).
wages increasing faster than inflation means that effective (sometimes called "real") prices fall.
If in year N an item costs $1000 and you earn $10k a year, but in year N+M the item costs $1100 but you earn $12k a year, the real price of the item has gone down.
No, it doesn't mean that at all. Real prices are a function of the ratio between the cost and earnings. If earnings rise faster than cost, real prices fall.
Now, whether or not that's a likely scenario is a separate question, but it is absolutely not impossible and has happened before.
Of course not. That doesn't make what I said false.
Have you ever had anyone say "cars cost so much more now, they were only $800 in 1942" and be taken seriously? (or whatever similar example you want to use)
Inflation has been going on basically constantly for centuries. Nobody is really expecting to buy a coke for a quarter or anything again, but people are expecting the prices to not grow 10% every couple months so that they’ll be able to switch to a job where things will feel affordable again (since jobs offering fair wage increases are basically a thing of the past).
Nobody would complain about $10 bags of chips if they made 4000x that a month.
Trust funds and “old money” from family fortunes are alive and well in places like New York, how some younger people can afford to live like this without the high paying job or business they run.
Figure out some way to opt out of the insanity of American knowledge-work metro areas. My wife and I rage quit DC back in 2016 and bought a house in an exurban county. In part because the mortgage payment on our 3,000 square foot waterfront house begins with a “1” we had two more kids and my wife quit her job to start a business. Hopefully with remote work becoming more accepted that will be a more practical option for more people than it used to be.
If you're living in a tech hub and really want to own a home in the short term, get a remote job and move somewhere cheaper. It sucks, but these places aren't going to get cheaper anytime soon. Meanwhile there's plenty of property in the rest of the country that's more affordable. When the market recovers, you might be able to sell your home for a profit and move back.
Seriously, now that starlink is out there are wide swathes of the country that become a lot more feasible to live and work in.
I am in a growing town that is quickly turning into a sprawling suburbia that I wanted to escape from originally and already have my eye on a little town that is a lot more slow paced and remote.
Pray for starlink then, because the experience in the rural part of NM that I live in seems to be that it/they cannot keep up with the previously promised service level as more people sign up.
Median days on market is up, sale-to-list is back below 100%, price drops are a thing again, etc. Come spring, we should see the first normal housing market since before the pandemic.
No, it's psychotic that you think one should learn to live with the fact that half of their wage vanishes into a black hole at the end of the month, without any value to show for it.
If renting is strictly financially worse than buying, why do so many fabulously wealthy corporations rent instead of own their offices and stores? When you buy a home you have to pay mortgage interest, property taxes, maintenance costs, HOA dues, and you have the opportunity cost of not being able to invest your mortgage principal instead of locking it up in your house. There are pluses and minuses on both sides which people rarely rationally evaluate because they are brainwashed by society into thinking that only losers don’t own their homes.
> If renting is strictly financially worse than buying, why do so many fabulously wealthy corporations rent instead of own their offices and stores
Because they can claim that expense on their tax report and dynamically downsize or upsize if they are growing or shrinking fast?
You literally can not compare private homeownership with large companies owning their offices.
> When you buy a home you have to pay mortgage interest, property taxes, maintenance costs, HOA dues, and you have the opportunity cost of not being able to invest your mortgage principal instead of locking it up in your house.
All negligible compare to the fact that you own actual property, you have the freedom to do what you please and the value of your home is one of the best assets against inflation, because housing is always needed.
If owning a home was not worth the trouble, how come gigantic corporations like blackrock are buying homes 30% over asking price as soon as they can?
Of course it‘s not true that only losers don‘t own their homes, but in the last 30 years, if you do own yours you‘ve automatically won. Housing prices are so astronomically high that suburbian property beats anything else.
> It's psychotic how much psychological weight people put on homeownership.
When the options are "pay hundreds to a couple thousands of dollars per month for 30 years or less" v. "pay hundreds more than that per month in perpetuity", it should be entirely unsurprising that the former is vastly preferable.
Both owning and renting will cost you money (on average).
Generally if you are living in a place where you can't afford to buy, you also shouldn't rent in the same neighborhood.
But that's not what happens -- e.g. people move to San Francisco and then see the high house prices and convince themselves they can afford to rent there but not own. It's not cheaper to rent, on average [there is a lot of variability and opportunity for trading gains in real estate due to leverage] -- but overall, the price of these two is comparable, however renting is a more accessible way to overspend than owning.
As a result of this increased accessibility, rental property prices are higher than they should be, due to increased demand, and what actually happens is that people who rent tend to lose more, on average, than those who own, because they are more likely to overspend on rent, given their income and financial situation.
If prospective renters had to go through the same third party vetting processes as those who take out a mortgage - everything from an independent assessment of the value of the property, an inspection, third party vetting of your financial history -- you would also see a reduction in foolish renting choices and then renters would not, on average, experience greater losses than owners.
It takes all of five minutes clicking around on Zillow to prove without a shred of doubt that yes, it is more cash flow negative than having a mortgage, by a margin on the scale of hundreds of dollars at minimum.
This really should not be surprising, considering the number of SFHs owned by landlords using their tenants' rent payments to pay for the mortgage and property taxes and profit on top of that (that being the situation of my now-deceased father and still-living stepmother, whose landlord has on multiple occasions jacked up the rent to cover the new mortgage payments from refinances).
To be fair, it's tough to start accumulating furniture and other big heavy objects until you have a permanent place to put it. Buying tons of these items while renting is a risky gamble - if your landlord decides to gouge you, it's not such an easy thing to just pack it all up and move.
// I can’t even afford a home right now on a tech salary
As another poster commented - where have you looked and what have you tried?
From recent experience, a nice but modest house in the suburbs of NYC is like 1.5 million. An equivalent house in a nice suburb of Cleveland is like 500k, and a smaller 3 bed/2 bath there can be had for under 300. If you are willing to go further afield (but still be in a town with a decent school etc) you can get that for under 170 [1]
What's the thing you can't afford, the 1.5 mil or the 170k house? And if you really can't swing the later on a tech salary, maybe we can talk about what's going on there because you should be able to.
Also heuristically, whenever someone talks about stuff like their landlord's mortgage rate rather than factors under their own control, it's a bad sign.
If you are not attending conferences, going to meetups and participating actively of the tech scene in a way that advances your career, you will be just wasting money in rent.
I dunno, I "guess" I'm the previous generation. It sucked back when my parents bought their home at 9%, and we thought we got an amazing deal at 6%. Then things happened and interest went down and everybody refinanced a few times as it dropped.
Before we bought a house we rented a bedroom in somebody else's house, then a crappy apartment and bought basically nothing else. It sucked, but we lived below our means and saved up. It took a few years, and then we were in.
I think that two things are simultaneously true:
1 - The housing situation isn't great today and isn't getting better.
2 - The up and coming generation has unrealistic expectations of what it's taken to get into home ownership based on stories from very out of date economic conditions from before the Vietnam war and some strange ideas that they should be able to buy a single family home in the central business district of a big city for 30% of minimum wage.
Here's the tip: Live well under your means, grind hard, commute long distances, rent the cheapest place you can practically live in, and save your money. When you have 20% of a house, buy it, refinance if you can for lower rates, grind hard, commute long distances, and save your money. Turn the growth in equity from that house and the new money you saved to buy either what you want or where you want. This is how it's worked in most medium-big metro areas for at least three generations.
Here's how to action this tip (assuming the Bay Area):
The average 30-year Mortgage Rate since 1971 is 7.76% -- that's your baseline.
20% down on a $800k is $160k -- if you live around the Bay Area, that's your target. Why? That's around the jumbo loan limit for the Bay Area (check your local limits). This is how you get the lowest rate.
I checked, there are plentiful properties under that amount, within commuting distance from San Francisco. Commuting distance should be calibrated at under 90 minutes each way during off-peak traffic conditions. Either travel early or late. I picked both Oakland and Lafayette/Walnut Creek areas.
Assuming you make Bay Area pay as an engineer, it's not unreasonable to assume you bring home more than $100k after taxes. We'll use $100k to make it simple.
Rent should be around 30% of your income. I found plenty of current listings where you can live by yourself within commuting distance of downtown San Francisco that are under $2000/mo. You can always room with somebody, or look for single room rentals.
Looking up some average cost of living indexes let's say it costs about $2500/mo to exist. So we need about $4500/mo.
That leaves us with $46k/yr in raw savings towards that down payment. That's 3.5 years of tough disciplined savings. Voila, you can buy a home.
You said you have student loans? Okay, looks like you did the math, 5-6 years is not unreasonable. Voila, you can buy a property.
Get a roommate, a live in significant other, or a spouse, and you can dramatically reduce these numbers by increasing income and/or lowering living costs. Voila you can buy a property.
Over 3-6 years you'll most likely get raises, bonuses, and other opportunities. Voila you can buy a property.
This pattern has been remarkably persistent since the 70s at least. It sucks, but it's what it is.
I bought my first two houses over the last 10 years and each time I thought we were at the peak, and I was way wrong. First mortgage had over 5% mortgage rate and 2nd was the same.
Outside of closing costs mortgage rates are temporary (can always refi). Land is a finite resource. It should continue to go up.
You really think the people who got a <3.5% interest rate loan will let go of their properties in the next 5 years to purchase a 5%+ mortgage for a more expensive monthly payment? What incentive do they have?
I just let go of my 2.25% mortgage to move out to the boonies at 7%. It's painful but still makes sense given the cost of living difference between here and the insane Bay Area. I am admittedly gambling that rates will come back down to something at least in the middle within a few years, but who knows?
I was unable to obtain a government backed mortgage for a decade because LexisNexis Risk Solutions was reporting a judgement inaccurately on my risk profile that they would not remove until I had a lawyer file suit against them and notified the CFPB. I received a $600 check as part of a $21M class action settlement [1]. I was lucky, and had the means to obtain creative financing (non-QM) when needed. Others are not so lucky.
I share this story because once you have experienced something like this, it is totally understandable why people want to burn parts of the system down. Sometimes, they’re not wrong. There is a special place in hell for the people behind these corporate transgressions, who seemingly never face sufficient punishment for the harm they cause.
The CFPB is so good. It's one of a small number of federal agencies that actually has teeth. I went 30 rounds with PNC after they devoured what was left of Simple before someone suggested filing a CFPB complaint. Basically, I received some mail for the account despite being assured it was closed before the Simple closure.
I asked for a letter stating in no uncertain terms that the account was closed and that I wouldn't be liable for anything if they screwed up. They bombarded me with emails and calls for a week trying to avoid working through the CFPB before finally answering the complaint with what I asked for. I was adamant that it happen with the CFPB so their statement would be on file. Now the PDF is there if the bank gives me any trouble.
People report similar success filing FCC complaints to get action from phone companies and ISPs that otherwise ignore them.
You’re not going to like my answer. I don’t like my answer. It’s never ending work.
Always vote, run for office if you can, and/or become and stay engaged as a citizen activist. See something? Report it to regulators. Think something’s up? Go digging. Engage with other folks who are doing the same and provide logistical support if able to.
I spend thousands of dollars a year on FOIA fees and attorney opinion and correspondence costs, but I have the means and the time. Overarching thesis is “Find someone to help and help them.” -DeviantOllam [1] of “Lawyer. Passport. Locksmith. Gun.” Saintcon talk fame [2].
I think the answer I was expecting was that it's a two-step process: 1) Be lucky, and 2) Don't be unlucky. My next-door neighbor is actually a local politician, but her party affiliation is the one I dislike, so I'm getting a life-lesson in humility.
I’ve never been good at delivering bad news, my apologies.
Talk to your neighbor and explore a run for office if it interests you. Actually wanting to be engaged is the first step, and it sounds like you want to. No one is coming to save us, it’s just us.
I don't know if this is what you intend, but it sounds like you're baiting an answer about vigilante style "justice" to the executives/board members of these misbehaving corporations.
That would be counterproductive and probably only cause them to treat us with less empathy than they do already.
I'm not advocating for "vigilante justice" either, but if that's the clearest / first thought you have when someone authentically asks "what can I do," that's probably a problem :P
If possible, leave USA. There are political systems around the world that aren’t broken and there are some that are actually being fixed by voters (e.g. Australia). But USA is broken for at least our lifetimes.
The reason those other places around the world aren’t broken* is because people had the mentality of putting in hard work toward the future. If everyone shared what you thought and fled at a moment of hardship, the whole world would go to shit really fast.
*your opinion, not mine. I don’t think USA is that bad of a place and I don’t put Australia on a pedestal.
I’m leaving for Western Europe, all of the tools I need for advocacy and accountability work just fine from over there (laptop and mobile device are all that is required). I’m unable to run for office, I am not an ideal candidate for various reasons. I want the country improved long term, but am unwilling to suffer in the short term because of, for lack of a better words, the malevolent and troglodytes. In the case of voting, you can’t persuade some people even with evidence and data. You might just have to wait for old people to age out (1.8 million voters over the age of 55 age out every year) and younger folks (open to new ideas and mental models) to come of age, before there are improved chances of success. If you have to wait somewhere, don’t wait here if you don’t have to (life lesson: never suffer needlessly).
(I also contribute time to helping anyone wanting to expat out of the US get to higher quality jurisdictions, Europe, Australia, etc)
I don’t anticipate taking advantage of the advice, but can you share any references on navigating such a long term move to Europe? I’ve been told Portugal is a good starting point.
Enjoy (genuinely). I don’t know where I’ll die, I just know where I don’t want to live as someone with substantial empathy. I don’t have much hope near term here, and hope is everything.
Solid jurisdiction to consider but too cold for my tastes and parts are expensive. If you can afford Vancouver or Toronto, or don’t mind living in Calgary or Montreal (one of my favorite places on Earth when warm, also the safest city in North America) instead, it’s a fine place to expat to while remaining close to US soil.
They often do say "burn it all down".... But in the process of losing their home and car they end up homeless or in public housing. Since "everyone" knows folks on the streets and on welfare/assistance programs are just scum who are gaming the system to take away what hard-working, honest people earn (in the form of taxes), their pleas are ignored.
Ever wonder why the rich folks are often the loudest about that sort of framing? It's (in part anyway) because it lets them get away with the sort of shenanigans Well's Fargo just got slapped on the wrist for.
I'm sorry but if one thing America should have learned over the last six years is that the two parties are nothing alike, equating them as the same and making a poor faith effort that voting is useless is extremely moronic.
Neither party is willing to solve homelessness by actually fucking housing people, and you're calling a homeless person a moron because their assessment of the two parties which, to avoid disturbing the existing economic order, mutually assent to that permanent state of crisis, doesn't include enough conciliatory language for you about how Orange Man Bad? Jesus Christ.
So to be clear, you are saying my tax money should be used to house the homeless, at exorbitant rates, while I cannot afford to buy house myself.
I don't agree with this. I don't think homelessness can be solved by building more housing. Not sure if you have lived near homeless encampments before. If you know you know.
> So to be clear, you are saying my tax money should be used to house the homeless, at exorbitant rates
Yes.
> While I cannot afford to buy a house myself
Affordable housing should be a right to everyone. Anyone, including you, should have the option to live in affordable housing that is nice, ideally with amenities and gardens and common areas if they cannot afford to pay for that on their own. Public housing, like it is in some other countries, should be not a stigmatized fallback but the normalized default. And that’s what the property taxes on the home I currently own should be paying for, so if — for whatever reason — I can no longer afford it or no longer want it, I can move into a dignified public housing accommodation too.
> Not sure if you have lived near homeless encampments before
I have. And my conclusion doesn’t change— they should have housing. Nice housing and the help they need to get back on their feet. We all should.
Treating the "homelessness" as a single problem is naive. I live near homeless encampments and near people who have been quietly living out of their vehicles for 5+ years. Some percentage of the homeless population can be fixed with cheaper housing. Some percentage of people can avoid being homeless altogether with cheaper housing. And some percentage will be homeless regardless of how cheap the housing is (i guess unless it's free and they agree to not break whatever rules/laws apply to them).
Meanwhile both sides just shout at each other and funnel millions of dollars into groups that don't make any real progress and have no accountability. It's the same useless polarization that exists in politics except I'm not even sure it's a political issue at this point given how 1-party the place i live in is.
> So to be clear, you are saying my tax money should be used to house the homeless, at exorbitant rates, while I cannot afford to buy house myself.
Who says it has to be your tax money? There are plenty of millionaires and billionaires in this country, and yet for some reason the only solutions that ever get traction are to put the tax burden on literally everyone other than the people with the most wealth. Hmm, gee, I wonder why? Probably nothing to do with the political duopoly said millionaires and billionaires bankroll, right?
> I don't think homelessness can be solved by building more housing.
It definitionally can and is solved by building housing for the people who lack housing.
> Not sure if you have lived near homeless encampments before. If you know you know.
I'm happy to put it all out there so people can judge where I'm coming from.
I'm not an expert on homelessness, either in a scientific sense or a first-hand one. I have a few long-term friendships with people who have at various points been homeless for a year or more (some traveling, some local to an area). For a couple years, I worked near a few hotspots for where homeless people would gather during the day and/or sleep at night in the downtown of a relatively small city. In college, I often had neighborly chats with the local homeless people who regularly went through the dumpsters in my apartment complex's parking lot. We'd chat whenever we met while I walked out there to take out the trash or let my dog go potty. Shortly after I graduated, some friends (now moved away, employed, and safely housed up!) who were homeless (then as well as when I first met them) moved in with me for a few months when the weather around us was utterly brutal and physically dangerous for them. When it feels safe (and I'm not on my way to appointment), which is pretty often, I stick around to chat a bit when a stranger approaches me to beg or vent about their life or meet my dog or whatever, whether they seem likely to be homeless or not.
I have seen people violently raving to themselves or at passersby, and I have seen people fight viciously over spaces in which to sleep or beg. I've conversed with people who seemed very lucid and insightful in some ways and paranoid or mentally disorganized in others. I have nervously avoided some people who were so agitated and incoherent that it made me feel unsafe. But admittedly, I have not ever lived in a huge city which has truly massive encampments of desperate people.
Over the years, I have talked in depth with people, including presently and formerly homeless people, about housing, employment, physical health, mental health, capitalism, familial rejection/abandonment, drug addiction, etc., and how those things relate to homelessness.
Personally, I think homelessness is a problem that requires a multifaceted approach to make people physically and financially secure, and to embed them in meaningful personal and professional supporting relationships in their communities. I think that approaches to addressing homelessness falling under the broad banner of 'housing first' are humane, scientific, and workable. And to me, access to housing as a public good is indeed way more important than promoting individual ownership of single-family homes (fwiw, like you, I'm a renter who'd rather not be).
But my main point in that remark you're replying to is that it's useless and incredibly tone-deaf to scold someone who is currently struggling with that level of hardship and societal rejection/abandonment for not buying into the prevailing political system, or for having a perspective in which the important similarities between the two parties are more salient than their differences.
This is an insane statement. Abortion rights do matter. Voting for veterans and 9/11 firefighters to get healthcare matters. Restricting voting right matters [0]. Not giving in to radical christians (as a christian myself) matters.
Don’t you see the game they’re playing with you? All those things listed in the thread they haven’t passed. It’s not because one party wants it any other party doesn’t. It’s because they both don’t want them and they play the game of “we don’t have enough votes“. It’s like how Obama could’ve codified roe versus wade in the law, but never did.
> All those things listed in the thread they haven’t passed
He says while confronted with a list of every Democrat voting for important things, and important things ultimately not passing because Republicans block it.
> It’s not because one party wants it any other party doesn’t
It's literally only that. You can look at their voting records.
> It’s like how Obama could’ve codified roe versus wade in the law
Obama had a 2 month window of a supermajority, which he used to push the biggest healthcare reform the US has ever seen.
It's like Maslow's hierarchy of needs...if you're wealthy enough, you can afford to distinguish between the two parties; if you're not, the two parties are the exact same.
I sympathize with that view, but nearly every decision you make, every day, at every price level, about everything, is a choice between flawed alternatives.
I get what you mean, but what's the alternative? How should you behave if you're exempt from normal social boundaries because of your personal tragedy? Shout at random people? Throw things? Punch some guy in the face?
Seems to me it's better to try and be kind, and treat others right despite your horrible situation. The person you're treating cruelly because of your personal trauma could easily be going through a trauma worse than yours.
Apologies if I misunderstood what you were getting at, though. I wasn't clear on which social boundaries you'd propose to exempt people from.
> I get what you mean, but what's the alternative? How should you behave if you're exempt from normal social boundaries because of your personal tragedy? Shout at random people? Throw things? Punch some guy in the face?
I don't mean to put words in obblekk's mouth (text box) so what I perceived them as meaning is: I don't think the person you're replying to was advocating for direct person-on-person action. When we see people protesting or pushing back against or loudly saying "this is wrong and I won't have it and neither should you" kinds of things, we should consider how our personal situation could rapidly change to be like theirs. And, in a lot of cases, would have been like theirs but for some skill at leveraging a few strokes of uncontrollable luck.
To me, it's like when people complain that "those damn unionized trash truck drivers are making $90,000 with a lot of overtime and a pension." Why is the response to try to tear them down, when the correct, to my mind, question is "why don't I have that, too?"
> To me, it's like when people complain that "those damn unionized trash truck drivers are making $90,000 with a lot of overtime and a pension." Why is the response to try to tear them down, when the correct, to my mind, question is "why don't I have that, too?
Because if total salary income were uniformly distributed across the population, the average would be like $80,000 a year.
casting aside a debate of whether its true every job is 80k/yr...lets say it is. What then? the market...the free market would supposedly adjust for all required goods
I'm failing to see the problem with that. Sure, $80k is less than $90k, but it's a hell of a lot better than what the vast majority of Americans currently enjoy.
I'm responding to the point of why people don't ask "why can't I have that too?" The answer is because it's literally impossible--everyone can't be above average. I myself don't think a flat income distribution would necessarily be bad. But I think most people think garbage men should make less than the average income, and doctors or programmers should make more than the average income. We can argue about how much more and how much less, but if you take any level of inequality as a premise, you can't reconcile garbage men making $90k.
And that overlooks that whatever measures would be needed to flatten the income distribution like that would also shrink the overall pie, as in Europe. The fact is that, even accounting for what the OECD calls "transfers in kind" (such as provision of government health insurance) American households have a lot more disposable income than European households: https://data.oecd.org/hha/household-disposable-income.htm (select the "gross, incl. social transfers in kind" drop down under "perspectives").
Americans aren't irrational. The majority is deliberately voting for an economy that produces more disposable income for the top 60%, at the expense of the safety net for the bottom 40%. This feature of the economy is reinforced over time due to immigration. Europeans migrate here to work as programmers, because they can make $500k/year in San Francisco versus $150k/year in Germany. My immigrant mom just came back from a long trip to Australia the other day, complaining how "small and close together the houses were." She said "America is really a land of opportunity. You can get rich here. You can't get rich in Australia." She doesn't care about communities suffering in generational poverty in Appalachia or Baltimore. And she is a party-line Democrat voter!
The alternative is to hold the institutions that inflict this suffering on people proportionately accountable for it.
One of the reasons we don't, is because the socially required reaction to this abuse is to suck it up, and suffer in silence.
What is the equivalent of a bank having its home wrongly taken away from it? Locking the doors on one of its branch offices and boarding it up for a few months?
There's an enormous level of asymmetry in the damage a large institution can inflict on a person, either by accident, or malice, compared the reverse. And that's not okay, and we shouldn't consider it to be okay. We need to do better.
There was that one guy who showed up at the bank with a moving truck, sheriff's deputies, a lawyer, and a court order to seize the bank branch's assets. When they started to take the bank manager's desk and chair, that finally convinced them to pay attention and pay up.
But this was after they tried to steal his home (which they didn't even have a mortgage on) and dragged him through court and refused to pay the court costs.
So, not optimal, but still something that should be happening more frequently. If a few hundred thousand bank branches got repo'd every year, one for each time they ripped someone off, that should cause them to take notice.
The solution is to weaken the liability limitation of LLCs. If a company willfully breaks the law, its shareholders need to be held responsible, in proportion to their ability to affect change in the the company.
That's not the problem. Wells Fargo shareholders won't be proportionately punished for this, regardless of whether it's an LLC or not. The root of the problem is that the firm itself isn't being proportionately punished.
Solve the second problem, and then maybe the first one will become the bottleneck.
the issue is that it's really, really hard to get that message out to everyone and have them understand the importance and the reasoning.
to paraphrase Frank Herbert, it is the mark of a human that they will remain in the trap, that they can kill the hunter and thus remove a threat to their species.
Credit unions are all the rage when the economy is roaring, but they are typically the first to run into issues or fold on first sight of troubled waters. Their history is full of examples of having to be rescued by the federal government, including all the times commercial banks had to be rescued.
The main difference in my view is struggling commercial banks get absorbed, where as struggling credit unions close.
I am not sure which one is better, but I am wary of all the calls to go all in on credit unions. They've been available for almost a century now. They have a noble goal in that they've always tried to serve those in need, but I am not sure they are the solution.
I don't think much of this is true. While corporate credit unions did participate in TARP[0], for example, that's not the common perception. Not only were they primarily corporate credit unions rather than consumer credit unions, far fewer of them participated in the program than banks: around 20% as many.
For people, credit union accounts are federally insured just like bank accounts are, but credit unions are typically much more resilient than banks given the additional restrictions on how much leverage they can engage in. They close less often than banks, and also seem to be more likely to merge than close[1], contrary to your claim.
You're welcome to keep banking elsewhere, but it's all credit unions for me and my extended family.
(your linked sources are horrible sources just in case you were not aware: both are paid media fronts designed to drive revenue through clicks, not reliable sources)
I did a thought experiment. If FDIC and NCUA deposit insurance didn't exist, would I trust a bank of a credit union more with my deposits? I landed with credit unions due to the overt malfeasance of banks.
The FDIC exists to keep banks afloat, because they're untrustworthy on their own.
A bank exists to serve the interests of their shareholders, a credit union exists to serve the interests of their members. Unless you happen to be a significant shareholder in your bank, credit unions are more aligned with your interests.
I don't consider size to be the primary determiner of how banks operate re: good or bad. I consider the ownership model to primarily determine incentives and behavior. They are, of course, are not uncorrelated, but rather when attributing primary cause, I see credit unions incentives aligned with their clientele because they are one and the same. Whereas banks have a larger discrepancy between owners and customers.
No clue why you're being downvoted, what you say is the correct response. Suffering is all around us and deep, but that's not license to inflict more of it on others.
It ain't a license, true, but I have a much harder time blaming the one lashing out due to suffering than I do blaming the one inflicting that suffering in the first place.
My understanding was that the GP wasn't saying that people should commit violence in the face of such a severe personal and institutional tragedy, but that we have this idea that people in tough enough situations reach a point where they're no longer in a place to act rationally. The surprise is that more people don't snap.
Good question, but I don't know. I'm not trying to recommend anything. Not sure it's even solvable.
Reading this article prompted this observation about myself.
I do wonder how often I have been wrong to get frustrated with someone, rather than extend more grace. I'll try to remember to consider this in the future.
There are systems of voting that would allow voters to both "protest vote" and yet also vote for policy. So-called "approval voting" (where the voter gets an infinite number of votes) helps mute the damage done by blind-rage protest voting, and can help discover the signal sent by voters, regarding policy:
I have a question, do people really protest in designated areas in the US? I know sometimes there are riots but from what I can see on the media it looks like people gather somewhere close to the subject and chant and wave banners.
I find it strange because in Europe the norm is to disturb the daily life. Farmers spray policemen with milk, train operators stop working, the younger and more anarchist ones burn cars and clash with the police, the more pacifist ones tie or glue themselves to something making a huge scene.
> I have a question, do people really protest in designated areas in the US?
No, people can protest wherever they want as a rule, under the freedom of assembly clause in the first amendment. It's pretty clear, and is well established (as are the exceptions). The wording of Article 12 in the E.U. fundamental rights charter is, by my reading, purposefully more restrictive than how the Supreme Court has generally interpreted "Freedom of Assembly" in the U.S., but I am not an expert on that.
In practice, you sometimes see things like "Free Speech Zones", which are indeed Orwellian, but also controversial and exceptional. You shouldn't think of them as the rule, because you also see things like the CHOP in Seattle.
Be fair. They'll do that for peaceful non-disruptive protests. Usually the term riot is applied after the cops start tear-gassing and the news can re-frame footage of people running away as "dangerous rioters".
Fun fact: most people arrested at protests end up arrested because they try to follow police instructions to disperse. The police keep directing them into a closed off area (aka bottling) and then arrest them in for failure to disperse.
I mean, they won't just happily do _all_ of that. You're exaggerating a bit and using extreme cases as if they were the norm. In particular you may say this with a straight face only if you're unaware of how this actually is the common reality of other countries.
We've all heard of cases of police running over crowds in some circumstances, or of the odd shooting (actually when?). But that's not what the average protester in the US will realistically, honestly deal with on the average protest.
I've participated in quite a bit of peaceful protesting. I've never been shot at, but the number of times I've been teargassed for being in a park or on a sidewalk during the "permitted hours" and in the "designated zone" is much higher than the expected 0.
They didn't just set it on fire, they literally burned it to the ground. I watched live streams of the police abandoning the precinct building.
Elsewhere, people were firing fireworks mortars into occupied federal buildings, with little to no recourse.
"Good" protesters were overshadowed in media coverage of "bad" protesters, but I also saw a grocery store get completely ransacked for no reason other than people decided they could. There was so much damage that the store was closed for months to renovate, turning a poor neighborhood into a food desert.
According to the article, only one of the five people charged was a member of the boogaloo boys, and he was charged for firing a weapon; he wasn't involved in any of the arson charges.
Also note the entire crowd chanting "burn it down".
Also worth noting that the people who started the fire were there because they thought people protesting police violence was bad - they weren't dangerous liberals or antifa or whatever other nonsense you'll spew: they were far-right "bugaloo boys"
I agree, but why do we need to make it 50+ hours? What if they only worked 35 hours a week with horrible shifts at different times and no consistency at a non-physically demanding job? Work is still work unless you’re living your passion, the mainstream outside of tech work to put food on the table and they put up with a lot compared to the worst days we have in tech. Anyway just frustrated lately with this idea you have to work 60 or 80 hours a week instead of strategically.
Not the GP but I use 50+ hours as an example often because most people have worked unpaid overtime at one point in their life. Most people haven't done your strangely specific multi-job 35 hour thing.
> On home loans, the CFPB said the bank improperly denied mortgage modifications over a seven-year span, with some customers losing their homes.
This says it started in 2011 (maybe earlier). If they already had a mortgage, in a good labor and good housing market, I doubt that many people actually lost their homes who wouldn't lose them anyway. Mortgage modifications are for people already behind on their payments.
> Incidents like this make it easier for me to understand "protest voting" against the system politically. Not sure of constructive ways to prevent this more broadly.
One useful thing a person could do is try to come up with a means of teaching a larger percentage of the population to have the ability to think in the manner that you have here. It is a very tricky problem space, but the payoffs could be huge.
Protest voting is shouting into a void. Cognizant voting is voting in a way that supports your beliefs and their place in the world. If you don’t see a representative who represents your beliefs, then you need to consider running for office yourself.
I don’t know how to say this that isn’t going to come off judgmental, but I’ll try: thank you for trying to see past your role and understand the people who are affected whether you could have any impact or not. It’s more than most people do.
A long time ago someone wrote, "they have nothing to lose but their chains" and predicted massive social upheaval as a result. That person felt this was an inevitable consequence of capitalism and its tendency to concentrate wealth. I suspect they were imagining people like in your example, only worse off.
Maybe redirecting that anger against another segment of society is a way to avoid social upheaval while maintaining the status quo? That anger does seem prone to being co-opted, though.
Close. It was Marx I was thinking of. Not endorsing him, but it's interesting to consider historical materialism and today's events -- especially in light of the parent's comment.
> I feel so much cognitive dissonance realizing that there are hard working people literally losing their home and shelter wrongly while I might be sitting across from them at any time, expecting them to behave within normal social boundaries.
It makes one realize that if you were put in such a disastrous position in life, the theoretical concept of an armed marxist uprising is not the most absurd thing ever conceived. And what root causes might possibly motivate groups of people towards such a thing.
The other poster replying to the same thread here says:
> " The fact that people experience this and then somehow don't say "burn it all down" is miraculous. "
Wells Fargo is the worst repeat offender in American consumer financial services.
There should be serious discussions around withdrawing their banking license. It's incredibly difficult to get a banking license in this country, and it does not serve the public good to have this predatory institution operating under the aegis of the American government.
Pull their license, let some new entrants into the market.
There's a really interesting video from philosophy tube which touches on a lot of these topics, albiet throught the lense of trans health through the NIH. A lot of the research she discusses is very relevant though.
I agree their charter should effectively be revoked at this point. A de novo bank (i.e. being granted a new charter) is a near impossibility in the US. Something this difficult to obtain should be just as easy to lose.
Unfortunately, the FDIC can't just waltz in and shut down the whole damn bank without causing a nation-wide panic attack. Similar to failed banks, something like this would need to be dealt with using a special procedure to prevent bank runs.
I think the best course of action would be to vacate the Wells Fargo board (and all officers), replacing them with members sourced from other US financial institutions.
> Similar to failed banks, something like this would need to be dealt with using a special procedure to prevent bank runs.
You could, I suppose, use exactly the same procedure you use for a failed bank, which is force them to auction off their assets and liabilities, rolling their depositors into other, better-behaved banks.
De novo banks open all the time. 13 new de novo started business in 2022 [1]
New management is important, and in this case Wells Fargo has had 4 CEOs since the scandal, and multiple board chairpersons. There has been significant turnover on its board and executive team. [2]
> De novo banks open all the time. 13 new de novo started business in 2022
In a $25T economy, 13 new banks (roughly 1 for every 4 states) effectively rounds down to zero. There is a trivial amount of new bank creation relative to the size and dynamism of our country and economy.
In a more liberal banking regime, one could easily imagine 2022 having seen 13 new banks chartered in the northern half of California alone.
>In a $25T economy, 13 new banks (roughly 1 for every 4 states) effectively rounds down to zero.
Using this logic, in an infinitely large universe, your comment’s importance effectively rounds down to zero. Arbitrary picking economy output to measure regulatory regime efficiency is ludicrous.
I have been receiving emails from them about a phantom account. It seems legit, but I tried calling their official number to commandeer any accounts, they customer service rep tells me it doesn't exist.
Funny enough, about a decade ago, there was an actual account created that I was able to shutdown. Shady.
After so many incidents with Wells Fargo, doesn't this point to something deeply ingrained in that company's culture? Such that even executives cannot change something about the system at the company that they have created?
There must be some bad, little, everyday incentives permeating working at WF that causes the people there to produce these bad behaviors year after year. You can blame and change the execs, but they're not even in control of (or maybe even aware of?) the systems that are making people behave the way they do?
I worked for a Wells Fargo joint venture when I was younger, doing credit research for mortgages during the early 00's bubble.
I very quickly came to the conclusion that all of their quality assurance rules were designed to whitewash, not catch, fraud, let alone simple mistakes. No one cared if what was going on our reports was total nonsense, so long as it was nonsense that fit the rules the underwriters had.
Basically the job was to research negative items on credit reports, and if I could get the creditor to say one of a dozen things, I could take it off the report and get it rescored. So a lot of phone calling.
There was a guy in my unit that'd been there years. He made less than 1 or 2 phone calls a day, but yet cleared the exceeds expectations number of reports consistently. I realized he was just never calling anyone, and writing up total fabricated notes on the files. But because the quality assurance sampled random calls, not random files, this was totally accepted.
This was great for WF: workers would commit fraud, but only in the direction that got more loans sold, and if it ever got noticed, they could just fire the call center worker and claim it was a "bad apple."
When I saw the story about WF branch managers opening accounts in customers names without permission I wasn't surprised in the slightest.
I believe the entire company leadership is consciously behind this sort of winking internal corruption that just so happens to increase the bottom line and bonuses for everyone involved.
Why on earth would you think this? The executives don't change the system because it continues to make them money and they suffer no consequences for the company's malfeasance. Maybe this fine is enough to rebalance the equation but I doubt it.
“Lord Coke gravely informs us that corporations cannot be excommunicated, because they have no souls, and they appear to be as destitute of every feeling as if they had also no bowels.... There is in truth but one point through which they are vulnerable, and that is the keyhole of the cash box.” - Hugo Grotius
My oldest credit file is a credit card that I don't use anymore but it is owned by WF.
If I close it, my credit score is negatively impacted by losing a decades old credit line. I don't particularly care about my credit score, and this sort of lock-in is pretty low friction, but changing banks can have costs.
I hate them, over the years that I banked with them, they have consistently been a bad bank. I think I have at least two complaints that went to the CFPB with them (both ended in my favor). I switched my banking activity to another institution years ago, but I do still have accounts open with them.
I'm a financially saavy rich white dude with a degree, and I still find it hard to sever the relationship. Imagine how lesser advantaged people feel. If you're choice is between WF and BOA because of geography or whatever, and you're used to financial institutions being shitty, why bother switching from one predatory institution to another?
I was about to say, Wells Fargo was sold my mortgage literally the day after I signed it. I originated the mortgage with a local-ish bank and it still wound up in their hands.
The idea that closing your oldest credit line immediately puts you out on the street penniless is a redditism that's been parroted too much. That old account closed in good standing will continue to support your credit score, and if you have another credit card that's been open for a few years, the score hit will be 10-15 points. You shouldn't feel like you're trapped with Wells forever.
Assuming it’s in good standing when closing, it generally will fall off your credit score in 10 years.
That gives you 10 years to build up a credit history with other accounts.
I closed an ancient Bank of America account several years ago because I didn’t want to do business with them anymore. It still contributes to my credit score. By the time it falls off, the other accounts will more than make up for it.
I get that, and like I said I genuinely don't care that much about my credit score.
I'm just trying to give a real world example of why someone might keep doing business with a known unethical entity.
It comes down to: I know that they suck, but there is a real non-zero cost to switching (my time and credit score), while continuing to do business with them is free.
Can you tell me about your experience with the CFPB. I just submitted a complaint against "Cardmember Services" who is the defacto disputing group on behalf of many banks. Cardmember Services does not seem to be acting in good faith which prompted my complaint.
In my experience, just getting the CFPB involved generally lit a fire under the ass of whichever company I had been dealing with. At the very least it will escalate your problem to a tier of support where a single person will be responsible for deeply understanding the issue, and ensuring that they get into compliance or respond ASAP.
Why is it -always- Wells Fargo. There are thousands of banks out there, and Wells Fargo is not even close to being the biggest. But why are they in the news every year for some illegal dealings? It feels like they should be broken up or something at this point.
> and Wells Fargo is not even close to being the biggest
Wells Fargo is the 2nd largest mortgage lender in the USA (after Quicken), #4 bank in terms of assets under management, #3 by market cap, #2 in number of branches. It is absolutely massive.
Fair point. I didn't mean to imply they were just some dinky little bank - they are quite large. But they are AFAICT third or fourth largest, and nearly 3x smaller than Chase. But Chase (nor the other top 3) don't have a fraction of the illegal dealings that WF seems to come up with.
The last time they had a big-ticket punishment [0] for their psychotic corporate behavior, it was because they had created millions of fraudulent accounts. There is no way to keep that quiet or "get away with it," they just assumed they would not be meaningfully punished.
What you've posted is completely wrong, but it's the answer to a question I had, which was why the fuck does anyone still bank with Wells Fargo? There must be a lot of people cynical enough to think all banks are that bad.
In the previous case, the company was fined $185Million. The CEO was personally fined $20M in a later lawsuits.
The former CEO's total compensation was > $130M. That sounds much more like a cost of doing business, and a great risk. Heck, fines are classified as an expense for taxes.
I agree that management wasn't taking the punishment seriously, but the CFPB's fine was just part of what the company suffered. I'm pretty sure they've been attacked via pretty much every means of civil or criminal enforcement there is, deservedly so.
Nothing that should keep you from banking with them, mind you... ahem.
On one side of the transaction you see cost of business in these fines, on the other side I see governments deliberately sizing the "fines" so these businesses can keep hurting citizens year after year, and the same governments bailing out the same banks when they compeltely mess up the global economy with their unlimited greed (see the 2008 crisis, and the upcoming debt crise*s*).
At some point these are not fines, they just represent the governments' way of taking their share on the criminal revenues of these banks while they are guiding us straight into the next iceberg. And there is no incentive on either side to make it stop.
When it comes to solutions, I'm reading that the system has to burn to the ground or worse even on HN now... I'm personally of the mind that systems can only change when incentives exist in alternatives. As much as HN dislikes crypto, Bitcoin is one which has taken a principled approach from the start and its community and incentives always presented it as a way to opt-out of the current financial system backed by central-banks/governments (powered by traditional banking). If banks stop being provided with ways to infinitely create debt with politicians behind them promoting it to be able to pretend that everything is fine economically under them, you might see things change... but for this we can't continue playing their game by their rules. We need to opt-out.
If other radical and non-violent ways to solve this exists I am willing to listen and study them... crisis after crisis, I'm becoming more and more cynical about it.
~5% of their 2021 gross profits. A hearty laugh goes around the Wells Fargo boardroom, and some new scheme will be devised to defraud their unwitting customers. Without criminal liability, this is no disincentive at all.
> “Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” CFPB Director Rohit Chopra said in the statement. “The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender.”
> Shares of the company rose 0.7% to $42.11 at 9:57 a.m. in New York.
And a little story from my own experience. I was completely broke, and they slapped me with a big fine for not having enough money in my account. Then the teller smugly explained that I should be thankful because they could have fined me even more if they wanted to... I closed my account at that point.
Different types of accounts offer different types of incentives.
Your standard free checking account won't have a minimum balance, but also isn't going to be earning any interest worth mentioning.
On the other hand, there are account types with higher interest earnings rates or other perks which require that you maintain a minimum balance. The minimum balance ensures that the bank is able to use the money in its other investments, which is why you are rewarded with higher tier perks.
Dropping below the minimum balance means that you haven't kept up your end of the bargain, so to speak. For example, the Way2Save savings account has a small monthly fee which is waived as long as you maintain a $300 minimum daily balance, or have automatic transfers, are under 24 years old, etc. The "Platinum" savings account tier has a $12 monthly fee which is waived only if you maintain $3,500.
It is of course worth noting that the "perks" of these savings accounts are practically worthless- the earnings interest rates are far below inflation.
To be fair, this is common among most of the big banks in the US. In my opinion, they do not cater for poor people and only make sense if you make $50k+ in transactions with them per year.
Case in point: I have a WellsFargo account. It was mostly dormant for 4-5 years with enough cash to avoid the penalty fee. In the last year, I used it for most of transactions (doing $10k+/month at some points). I got my credit card limit upgraded in a short amount of time (by around $5k). I was out of the US, and needed a new credit card. WellsFargo contacted me (got back to me) shipped a new card overnight overseas for free and waived the fees for the credit card and gave some credit/gift things.
They would have "agreed" to it in the fine print of a 20 page ToS that they didn't have the time or legal skills to read. Then crony capitalist corruption makes it so that lawmakers don't outlaw it.
I used to be a Wells Fargo customer, just before all the news of shady "operating practices". One day I was trying to login to their online banking web site, but my password wasn't working and the reset functionality also wasn't working. I called their customer support, and the rep told me to make sure I was using the correct password. She then read my password to me. Later that day I drove to the branch and closed my account. I've been with my local credit union ever since.
That… scares the crap out of me. How is that even possible, beyond the worst possible infrastructure practices imaginable?
If I knew of another bank in North Carolina with decent coverage I would swap for sure. That said, don’t really use the atm that often so maybe I shouldn’t worry about that.
Only at WF because Chase wasn’t in NC and yes they opened extra accounts for me.
Great, now WF management will lay off staff, most of which were not involved in any king of wrong-doing. And management gets to keep their bonuses.
Penalizing Wells Fargo as a company will not solve the problem of institutional-scale bank fraud, but clawing back the compensation of executives will.
Accountability and skin-in-the-game need to make a comeback.
My backpack got stolen and it had my checkbook in it. I went into Wells Fargo (I became their customer because they bought my regular bank) to figure out what to do. I was told that I had to close my account (connected to the checkbook) and open a new one. Kinda weird, but I went with it. They sent me a new checkbook and new ATM card. Landlord only took payment with checks so I wrote a check with my new checkbook; it bounced. It was really surprising because I thought I had the funds. I check with my balance with my new ATM card; plenty of money. I call customer service to figure out what was going on. It turns out that they had created two new accounts for me. One was connected to my checkbook and one to my ATM card. The one for my checkbook had a bunch of fines for the bounced check and fines for not paying the fines. The one for my ATM card had plenty. They tried several times to open another account to combine the two accounts together, which would have forced me to indirectly pay the fines that weren't my fault; I objected. In process of all of this they canceled my new ATM card accidentally.
I went into my local branch and withdrew all of my money and canceled all of my accounts (I had somehow ended up with 4). I ended up paying my tuition, rent, etc. with cash which was a huge pain.
It is the worst experience I've had with any bank and it was with many different employees.
Ouch, I have a similar anecdote where they signed me up for a completely incorrect account when I was young. Some 100k minimum trading account when I was a broke 19 years old looking for the simplest type of bank account possible that I could access from hometown and college. Saw $15 monthly charges, went in, found out the problem, took my money and business elsewhere and haven't looked back.
When the opportunity presented itself, I refinanced our mortgage with Chase.
A key goal was to get out from underneath WF.
Every mortgage that I've had has ended up in WF. WF is a mortgage black hole, they buy everything and it's pretty clear that a vast majority of the mortgage industry is to act as service bureaus for WF. I completely understand both business models, I just don't want to play.
When I got the new mortgage, I mentioned to the person handling our application that I was hopeful they would not be selling my paper to WF. Chase is not a mere broker, they're the whole kit. He said he couldn't guarantee they wouldn't sell the paper, and I understood that. But loans are Chases business too, so far they're holding on to it (typically they're sold in the first few months).
So, for the moment I'm out from underneath WF, and have been for several years.
> Example number ten thousand of why the "vote with your dollars and don't do business with them" defense of capitalism fails completely in practice.
Example number ten thousand of how everything bad is blamed on "capitalism." It's a lazy, shallow, knee-jerk reaction that is plaguing this site and ought to be forbidden by the guidelines.
When you apply for a mortgage you are informed in advance that it might be sold. In fact, when I got mine I was told it would be sold. This information is given to every applicant as a legal requirement and people who don't like it don't need to go through with the application.
There are also significant legal requirements for mortgage servicers (such as Wells Fargo) which constrain them to such an extent that they are pretty much interchangeable. This is far from a free market. If you have a beef with this system, you should take it out on Congress and the CFPB, not "capitalism."
>When you apply for a mortgage you are informed in advance that it might be sold.
Ok, and where can I go get the mortgages that won't be sold and have comparable financing terms to the ones that do?
Oh wait, those don't exist (or cost way more)? Hmm. I see.
Here's the thing: free markets can only ever hope to work in a world where people have total freedom of association. If I can't take my business elsewhere, then I'm not dealing with a private corporation anymore. I'm dealing with government with extra steps.
Likewise, capitalism and free markets aren't interchangeable terms. Free markets are a system of resource allocation, and capitalism is just private ownership of an enterprise. There's been plenty of examples of brutally repressive regimes which still had private capital ownership, free markets be damned. Because free markets do not actually maximize profits for capitalist owners.
So I think it's fair to blame capitalism, even if there's some government floating around in there, too. Consider them joint-and-severally liable.
> Ok, and where can I go get the mortgages that won't be sold and have comparable financing terms to the ones that do?
Why should they exist? If they can't be sold, the lender needs to find some other way to make their money on them. What kind of sane economic system would deliver mortgages like that? Should the government subsidize all mortgages?
I'm not a finance expert. But isn't the lender already making money on the mortgage by charging interest? That's the whole reason they can even sell the mortgage, right? Why would anyone buy a mortgage otherwise? They're purchasing a stream of interest payments, like a bond.
I think that's how mortgages were before the 1970s. The bank lent some money and accepted the payments. They didn't sell the mortgage to anyone.
Selling and securitizing mortgages is how 2008 happened. Maybe the old system was better in that way. Again I'm not an expert, so I don't know the side-effects of doing that.
your analysis of the situation as being interchangeable is rendered invalid by the story you're responding to, and claiming "you should have read the fine print" is clearly bad faith in an era where EULAs are a half mile long. Also, to say "don't buy it if you don't like it" ignores a whole ton of a nuanced and complex situation, where there might not be better alternatives.
I would be more than happy to discuss why it is some of us have beef with capitalism, if you're open to a level headed discussion.
The idea that a free market allows the creation of opportunity and choice is powerful, but what I think many of us have seen happen is that a free market doesn't remain free, as wealthier interests will move to cement power through use of funds. The banks are the most prone example of this I can think of.
I never said anything about reading the fine print. I had to sign a short, readable form by hand which was explained to me in person by the lender. They are very, very up front about this (which is also required by law, which means everyone else in the US who got a mortgage in the past decade or two has also signed this form).
> "When you apply for a mortgage you are informed in advance that it might be sold. In fact, when I got mine I was told it would be sold. This information is given to every applicant as a legal requirement and people who don't like it don't need to go through with the application."
Ah yes, the good ol' American practice of victim blaming: "Well, we specifically told you we'd screw you over; look, it's in paragraph 151, subsection 15, article G of the document you signed as we hovered over you impatiently that time you came in when we didn't tell you we were closing 10 mins after that appointment we setup the day before the deadline to sign... so it's really YOUR fault!"
If you agree to something, you are not a victim, you are a participant.
Don’t agree to things you don’t like and claim to be a victim, unless you had a gun to your head. We should have higher expectations than that.
Don’t like the mortgage process? Don’t get a mortgage. Pay cash, or rent. The world doesn’t owe you the exact terms you want. That’s not the fault of capitalism, it’s as bad or worse under any other system.
You also seem confused about how the process works. Nobody hovers over you under time pressure. Escrow takes like 30 days, and during that time the lenders will freak out about any reason to prevent you from getting the mortgage. They are more worried about getting screwed than the applicants are.
> If you agree to something, you are not a victim, you are a participant.
If you cannot give informed or willing consent, you are not a participant, you are a victim. Impenetrable, hard to read terms are not informed consent, particularly when the terms are in a contract of adhesion.
> Don’t like the mortgage process? Don’t get a mortgage. Pay cash, or rent.
Couple of points here. First, I take it you've never read a modern leasing contract. In most jurisdictions, especially where the large corporate landlords have almost entirely conquered the market, they are just as opaque. Landlord associations promulgate so-called "standard leases" that contain myriad difficult to comprehend terms.
> The world doesn’t owe you the exact terms you want. That’s not the fault of capitalism
Perhaps it does not, but yes, it is the fault of capitalism. When all of the participants in a market operate in virtually identical ways because the optimal path, under capitalism, is to legalese first and ask questions later, that is absolutely a failure caused by the capitalistic system. It all stems from the idea that, under capitalism, an individual or group's highest and best course of outcome is to feverishly grab for every single available resource to hoard it against use by others. Along the way, some of those resources are (often temporarily) lent out at an inflated rate to ensure that more resources are grabbed.
This works fine when it comes to a mobile phone device or a book or a toy. Those are optional, often called "luxury", goods that we can leave or take as we desire. Housing, water, food, transportation, energy; we need all of these to live as humans, yet that's where capitalism extracts its most gains because the more desperate someone is for one of these, the more resources they will throw in to fill the need they must fill.
I doubt many people really want to use them, any more than they really want to use any other megabank. A lot of people just use the bank that's closest to their house/work, thinking (and often not wrong from a retail point of view) that banks are fungible.
As a former "customer", in many cases, like ours, it's because they use their capital/position to buy loans from other businesses, and there's nothing the borrower can do about it.
Many wealthy people are inclined because they'll have the lowest mortgage rates caused by a 0.5% interest rate deduction with a temporary asset transfer of $1m. Some people will take the 5% as opposed to 5.5% and save $300/month, because whoever originates your mortgage may just sell it to WF anyway.
Their ATMs are pretty handy. It does not require a physical card - you can just tap your phone on the ATM to withdraw cash. Also there’s lots of ATM locations in north California which is pretty convenient if you happened to need cash.
One thing I do not understand though is that when deposit via their mobile app, they ask you to write something like “Used for Wells Fargo mobile deposit” on the check, which is a pain, not sure how other banks do it.
WIth two massive scandals within 5 years I think this bank should be broken up as part of its punishment. It's clearly too big to run an honest consumer safe business.
It should be seized and either converted into a credit union (give ownership to the affected people) or a state run non-profit banking service. (And also implement the proposals for the postal service to offer banking services)
That would avoid both a lot of smaller wells fargos doing worse things and further financial damage to the economy, clients, and workers of splitting up a private company.
What about the 268,000 employees who work at Wells Fargo, 99% of whom had nothing to do with this?
Most of those employees are just normal people trying to make a living, and it would be wrong to screw them because their bosses, who they never met or had anything to do with, did something wrong.
Shutting down a company is the nuclear option -- it hurts many people who did nothing wrong, including most of the employees and the shareholders. It is not justice.
1) Breaking up does not mean shut down. They just need to be split into smaller pieces.
2) A vacuum provide ample opportunity for these people to start a new, honest bank as if there will be a need for it.
3) Sometimes evil just needs to be shutdown, Im sorry these people are working for a criminal organization, someone should have spoken up (Whistleblower money is huge for these types of things).
Without advocating for/against the proposal, to clarify: typically this means either business units are spun out as smaller companies, or sold off to competitors. You’d expect some job losses due to consolidation but it’s not like you are closing down all of the branches and sending everyone working there home.
How exactly would you break up Wells Fargo into a subset of businesses that had a chance of surviving on their own?
This is especially bad for a bank. Customers would freak out and leave. I can't find a single historical example of a bank breakup that didn't result in the destruction of the entire business.
It's not that they deserve to lose their jobs. There were probably lots of honest people working at Theranos! That's not a good reason to have kept Theranos around, though.
Like, asbestos miners losing their jobs was a necessary result of shutting down the asbestos industry. It's not that it's fair, but it's not a reason to keep mining asbestos. Obviously ideally Wells Fargo could be reformed somehow, but the "corporate death penalty"[0] exists for a reason!
But it does send a message to the broader industry. Sometimes a few rouge cancer cells can kill the entire host. And this is the second time around for them.
> "What about the 268,000 employees who work at Wells Fargo, 99% of whom had nothing to do with this?"
Boo-fukken-hoo. They were all part of the problem - the grease of the machinery if you will; something this bad doesn't go unnoticed by so many people. This was clearly an "inside job" with many, many people involved internally.
I would have no sympathy for any of them, even if they'd end up losing their own homes as a result (sweet, sweet irony that would be!)
The banks were really eager to repossess houses during the last mortgage crisis (next one coming soon), and they were often quick to do so, but then they discovered - you have to maintain them, pay taxes, pay utilities, keep the grass cut, have people walk them periodically to look for damage, etc. If the market is crashed you had to hold them for long periods until a buyer came along. In the end a lot of banks were wishing they had negotiated instead.
I had a house that I kept vacant for several years thinking I might return and several things I learned is 1) service people don’t like doing business over the phone because they fear not being paid so it’s very difficult to maintain things remotely 2) about half the time people don’t do the work if they think you won’t notice (i.e I paid almost five grand for monthly termite control over three years but when I flew in and inspected the stations it was obvious they had not been maintained for an extended time, the lawn company I hired kept sending me bills long after they stopped coming out) 3) if people think your house is vacant they dump trash there and the city charges you hundreds of dollars each time it happens - plus you then have to pay to dispose it. Having a tons of construction waste someone dumped in your driveway removed is expensive 4) raccoons don’t perceive drywall as a barrier, and if they get in they bring all their friends.
I’ll never see a single penny from WF, but I’ll also never forget they helped turn a smallish life catastrophe into a decade of my life being chaotic hell. They were not the root cause. They weren’t even systemically the worst challenge I faced. They were the gigantic multiplier on both though.
I had a persistent medical issue I couldn’t treat because it was determined by insurance companies that treatment would be elective. Not my insurance, mind you, I couldn’t afford any. But they got to decide whether I’d be able to get surgery on debt versus paying up front.
After months trying to find a solution, family footed the bill, somewhat gofundme style but strings attached. And I was expected to go fund them back. I dutifully obliged, as soon as I could go back to work. I sent the first check, 10% of the surgery…
That check sat gathering dust for over a year. I’ll never know why it got deposited, but WF knew it was illegal to honor it. They knew it didn’t matter what I had already been through, the check was expired and they could not legally honor it.
I had of course forgotten the check was written over a year later. When I got hit with compounding overdraft fees I couldn’t opt out of, they would not discuss the fact that they illegally processed my check. I’m supposed to be good for my checks, they said. So for a decade I was guilty of “fraud” because WF illegally debited my account and then hit me with recursive fees for illegally charging me money they couldn’t charge. My only recourse was to just hunker down and manage my money carefully as I always had, for ten years. 1/4 of my life so far was set back because they knew I couldn’t afford a lawyer to do anything about the law they admitted knowing they broke.
And that’s nothing compared to what they did to most of these victims.
I am struggling to understand this. You wrote a big check to a family member, they didn’t cash it for awhile, and when they finally did cash it you didn’t have enough money in your account and got hit with fines?
That does not sound evil. And how big were these fines that you’re claiming it took a quarter of your life away?
My family member probably forgot to deposit the check. The bank knew it had been illegal to honor the check for over a year, because all checks expire. They admitted they honored the check illegally, but they claimed I had defrauded them. Which I had not, neither in intent nor their own rules, nor the law. They still put a black mark on me that limited how I could operate financially that wouldn’t expire for a decade even though they knew they broke the law. I didn’t have any recourse. Hope that helps you understand.
Edit: and the fines were too much to afford at the time but were not nearly as harmful as a decade record of “fraud” I didn’t commit. Maybe people here don’t realize it but when you have a record of fraud you can’t… do the things you all think are normal? Having a record of fraud because a bank told you they don’t care they know you didn’t commit fraud is ten years of recovering your financial reputation.
Capital One has no-charge partner ATM's everywhere (7/11, CVS, gas stations, there's like 100 in a 10-mile radius of me), some of the best interest rates (currently 3.3%), some of the best credit cards (3% cash back food/entertainment w/ 0$ annual), and best software tech / mobile app (#1 bank app on iOS, 4.9/5 rating). I'm not affiliated in anyway, I just am pleased with all their products for the last 10 years.
Many small local banks will refund ATM fees nationwide. I prefer small banks because it is much more possible to build a relationship with them to get better service.
For cash Schwab is the best, they refund all ATM fees worldwide. There is no catch, except you have to open a brokerage account, but there is no minimum deposit.
For many years USAA banking was open to everyone, but it isn't now.
I'm not sure how great a loss it is-- USAA's formerly amazing quality of service has declined dramatically in the last two years, at least on the banking side.
How far do these companies have to go to be closed down as criminal organisation? I wonder the same about the Catholic Church. How many crimes have to be uncovered before they get marked as beyond rehabilitation?
My father taught me that if you are going to steal from someone you never steal his tools or his vehicle, because those are the means he uses to make a living and you dont want to be responsible for his kids going hungry. Given this history of Wells Fargo this isn't a one off accident. It's often said but people really need to go to prison for this, not club fed either, send them to be with the other carjackers.
It can be. My dad would tell me growing up about home protection something along the lines of, "if someone breaks in and just wants the TV in the living room (or other living room type items), it ain't worth it to put my body in harm's way to stop them over a $300 TV. If they start coming back to the bedroom area of the house, its a different ballgame because they aren't looking just to steal something." Now as an adult with a two story town home, I have the same line of thinking. If someone breaks in is just staying down stairs, it ain't worth it. Once they hit the stairs to come to the bedrooms, its a different ballgame.
And yea on stealing things. I remember someone locally was stealing Cadillac symbols on cars, it made big news, and my dad telling me something like, "don't assume the person is a bad person. They could just be feeding their kids." This was during the 2008-crisis and with an emphasis of, yea they are stealing, but it is rather benign in comparison to what they could be stealing.
There are greater sins: we have a military, you know. Raising a child means teaching nuance in ethics. I've had similar conversations with my kid, arising from questions like "why do robbers exist?" "Why are some people homeless?" "Why do murderers exist?"
Ethics is full of gray areas, and refusing to engage in hard conversations increases the risk that your kid will make the wrong call if they ever find themselves in a shitty situation.
I agree that they main point of ethics is providing a decision framework in the grey areas (if they were clear-cut, there would be no discussion).
But that seems off-place here. It leads to the question about "when is it okay to steal?" There's an obvious "defense of necessity", but that doesn't stop at stealing someone's means to a living. If it's legal to steal food in a disaster, it doesn't matter if that food comes from a neighbor's pantry or the bakers shelfs. The colloquialism described seems like one of those heuristics that feels true at first glance but quickly breaks down on further inspection (which is what a lot of ethical debate seeks to accomplish).
It's important to discuss alternatives, teach problem solving, etc. But at the end of the day, teaching your kid to starve to death because stealing is always wrong is only going to erode their trust in you.
This isn't something that I brought up with my kid, btw. He led the conversation, he was asking honest and innocent questions. Shutting the door in his face loses the opportunity to discuss nuanced ethics when he's receptive to the conversation. If I drive, then it's just an abstract lecture.
>But at the end of the day, teaching your kid to starve to death because stealing is always wrong is only going to erode their trust in you.
This is a misinterpretation of my point, though. When I brought up the "defense of necessity", it was a direct acknowledgement that sometimes stealing is ok (or is at least, the more moral action).
However, communicating vague heuristics based on shaky principles can set the ground for rationalization that leads to immoral behavior. When we read about abhorrent behavior (like in the featured article), it's more often than not the result of a line of rationalizations rooted in human biases rather than a principled moral stance. All I'm saying is the OP's guideline of "don't steal tools or a vehicle" isn't a particularly good first principle (for one, as the previous example shows, it could still result in starving).
Nobody in America will starve to death unless they have a severe mental illness that prevents them from obtaining help that is otherwise accessible to them. The welfare system is not great, but it's not that bad. Food stamps and food banks are a thing.
> It leads to the question about "when is it okay to steal?"
There are certainly situations where it is _morally_ OK to steal. You're confusing the question with when it is _legal_ to steal, which by definition there is none.
> If it's legal to steal food in a disaster
See above.
> The colloquialism described seems like one of those heuristics that feels true at first glance but quickly breaks down on further inspection
The OP is making a moral case, not a case that it's legal to steal as long as it's not someone's vehicle or tools.
>which by definition there is none.
This is not true, if you consider stealing to be theft of property. See my comment below, where it is not illegal to steal in times of necessity. Legally, you are allowed to takes someone else's property to protect life or seriously bodily harm. This is because we recognize a hierarchy of legal rights. If you consider stealing to be whatever the law says is a crime of theft of property, then it's a begs-the-question fallacy.
>Slippery slope?
No. This is quite literally what ethicists do. The point of finding use-cases where a maxim breaks down is to find the limits of an ethical framework and to determine the first principles. E.g., if you say it's illegal to steal, full-stop, and I show you an instance where it is not illegal to take someone's property, it is a demonstration that your first principle is incorrect.
I am really trying to reconcile the earnest goody-goodyness here against watching the low income housing at length in my crowded city, where stealing in multiple forms is a common and in fact relentless occurrence, for lots of reasons, with lots of attitude, with loud vulgar cursing in front of the multiple children standing in plain sight while it happens (once in a while). There are plain lies and made-up on the spot allegations, name-calling and posturing sometimes, sort of like a social theater. But much more often it is out of sight and some kind of sneakiness is involved.
Next in line would be a completely different situation -- small business. Multiple times over long years of small business, I have seen crooked things done with money, by ordinary people.. probably parents. Some of those small business owners may have been from recent migrants, and felt pressured that way in a new city, but also not. Some small business people have certain words, phrases, they brush off the story, make it sound like it is the other person's fault, or that the questioner is confused somehow. And it continues... do they "teach their children not to steal" those small business people ? I dont know, but these stories are real.
You can teach these lessons without engaging in an explicit discussion of "If you're going to steal, steal X and not Y". Just the intersection of "stealing is very bad unless absolutely necessary" and "some things are more important to people than other things" seems good enough to understand this.
I've never stolen anything, except for a few hearts, and was taught to never steal, and yet I can somehow piece together that it is better to steal something trivial to a person rather than the means of their survival if need be.
First off so far I haven't had need to steal something so it hasn't come up in the literal sense. But I have found wisdom in the general principle there. Let's say we are playing cards and I'm winning, I'd walk away rather than let you put the deed to your house on the table. Sometimes in life you may need to hurt someone, before you do think about everyone else who is going to be hurt as well and make sure it's worth it.
It's probably more along the lines of "never mess with a man's means of providing for his family, because that will be when you push him so far he has nothing left to lose."
Arguably an important lesson, though. Just because you might have to steal to survive doesn't mean you have to be a dick about it. Likewise, if someone's stealing to survive and not being a dick about it, that leaves less motivation for retaliation and more motivation for compassion.
Not really. It was probably a father telling his son, "I got you. Someone steals my means of taking care of you, don't be surprised I go stomp some ass."
If someone breaks into my car and I see them, I yell at them and call the police from a distance. If someone breaks into my house while I’m there, I assume they mean me harm and all bets are off.
I’m not a gun nut. I don’t even own a gun. But I support anyone’s right to shoot someone who breaks into their home while they are there
You can't really compare sex and criminal behavior. Well, maybe YOU can. Why are these things similar to you? My dad taught me to read as well, what dumb-shittery do you have to say about that?
Right, the old "my kids are gonna kill yours" argument. Who needs to worry about nuance or ethics when we've got guns? A cousin of mine spent about two years in jail over shooting that was eventually ruled as self-defense. Are your kids prepared for that?
Would you please stop posting flamebait and/or unsubstantive comments, including name-calling and swipes? You've been doing these things repeatedly, unfortunately. It's not what this site is for, and destroys what it is for.
Would you please stop posting flamebait and/or unsubstantive comments, including ideological battle comments? You've been doing this repeatedly, unfortunately. It's not what this site is for, and destroys what it is for.
No fine is enough for these giant banks that repeatedly engage in this behavior. They should be broken up, disbanded, and the responsible officers tried on criminal charges.
I understand that company officers cannot be directly sued or prosecuted for the actions of the company that they run, on the legal theory that the company is a separate person. However is there any reason that they cannot be prosecuted as accessories before the fact?
Might be time to start a petition / gofundme campaign to withdraw their license? Not sure how that would work but I'm sure there are people who do and with some monetary support can shut down this massive corrupt bank forever as well as (hopefully) put some execs in jail.
I had a Wells Fargo account in college and closed it a few years ago when I saw they had opened fake accounts and charged their customers a bunch of fees.
It didn’t happen to me, but I will never trust an institution that treats customers this way.
Shocking to me that people would use a bank like this.
Why would anyone continue to give Wells Fargo business at this point? Rates between various banks are competitive. It seems like the deciding factor in which bank to choose is how well they treat their customers, which WF fails miserably at.
I haven't had any account frozen due to "suspicions" so far, but read about many such horrific cases. Hopefully, this fine will make financial institutions think twice before twiddling with people's accounts.
I haven't been with Wells Fargo for a few years now, but I did get a check for about $200 in the mail the other day due to some fees that had been processed in an "unintended manner" apparently.
Similar thing happened to me. I had been a customer for maybe ten years and had my account closed over one overdraft. I got an apology check for a little over $100 a few months ago. I haven't been with Wells Fargo in over a decade, I had changed addresses, I was very surprised.
I had excellent experiences with Wells Fargo up until they closed my account. Instant car loan approval and overnighted loan. At the time they had one of best online experiences. I have no intention of returning, I don't ever want to experience an account closing again.
finally a somewhat sizeable fine for these turkeys.
they will continue until it is not profitable to do so. large fines are basically the only leverage that the CFPB has that can really hurt, and historically fines for this thing have been very low, to my knowledge, which has not done a lot to deter the behavior that they are trying to deter.
That's awesome that WF is paying $3.7B. Unfortunately the victims will likely never see any of that. That money will just go into the treasury.
I would personally like to see the CPFB have the power to sue banks on behalf of customers to get financial redress. This money needs to get back to the people who suffered the most.
Hell, paying only $3.7B with a pinky promise you won't do it again would still be profitable if you made $5B on the scheme.
My reading of the article is different. This reads as though $2bn of the $3.7bn was to go directly to the consumers whom Wells Fargo harmed:
a $3.7 billion settlement with federal regulators, including a record $1.7 billion fine [...] The agreement with the Consumer Financial Protection Bureau includes more than $2 billion in “redress to consumers” [...] The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country.
I agree that there is a lot more harm caused than the sheer monetary side of it. Don't do business with Wells Fargo if you can avoid it. But as far as the scale of the redress goes, the CFPB announcement[1] has an assessment of the total harm caused:
Wells Fargo had systematic failures in its servicing of automobile loans that resulted in $1.3 billion in harm across more than 11 million accounts.
Also a detailed list of how much Wells Fargo is to pay for which group of harmed consumers:
Specifically, Wells Fargo will have to pay:
More than $1.3 billion in consumer redress for affected auto lending accounts.
More than $500 million in consumer redress for affected deposit accounts, including $205 million for illegal surprise overdraft fees.
Nearly $200 million in consumer redress for affected mortgage servicing accounts.
Not 100% pertinent to this thread, but does anyone have experience changing US bank account while living overseas? I currently have my old account linked to my parent's address, and I'm worried it would be a huge headache to try and open a new account from abroad without a proper address. This is the only thing that is stopping me from closing my WF account.
Imagine a family with a new born, working 50+ hours at a physically demanding job, making $80k/yr combined, and then losing their home for no reason... and then being expected to do everything else right while dealing quietly.
Incidents like this make it easier for me to understand "protest voting" against the system politically. Not sure of constructive ways to prevent this more broadly.