Wells Fargo furor in a teapot

Wells Fargo is in the news a lot lately for opening accounts and charging fees without customer's knowledge or permission.  The CEO has been grilled by both the House and Senate and generally made to look like The Big Bad Guy.

The real question is: why do people do business with a big bank?  Go with a credit union.  A credit union is like a club, you become a member and they work on your behalf.  A bank is a for-profit corporation, it's true they work on your behalf, but it's also true that they want to make big profits.  Wells Fargo CEO Stumpf announced he's giving up $41 million dollars in stock compensation over the recent furor.  What if a bank just... oh... you know... passed on $41 million as lower fees for customers?

Stumpf told lawmakers "I serve at the pleasure of the board," but keep in mind he is also Chairman of the Board.  It's probably a safe assumption that he wields considerable influence on the board by being the chairman.  Thus, saying he serves at the pleasure of the board is a little like saying he serves at his own pleasure, but he is smart enough to not say it that way.  It's up to regular people to realize these sorts of things.

Officers and directors of WFC

Disclaimer:  I do most of my personal banking with Wells Fargo.  My wife has had an account with them for a long time and we got our first mortgage through them, so we gradually started using their checking account since then.  I am personally looking to move away from them.  It is a bit of effort but basically it boils down to setting up bill pay arrangements with credit cards, and switching over the payroll direct deposit setup.

Why is healthcare so expensive? Follow the money...

Ordinary working people know their health care costs are rising.  They see the effect on their budget when they need care.  They see the insurance premiums rising.  They see the introduction of "high-deductible" plans.

Why do costs keep rising so much?  It's a big jumble involving patients, doctors and the insurance companies. Figuring out who pays what and how much is a complicated mess.  Guess what?  Making things obscure is generally a tactic to help those who are the experts.  Who are the experts in this giant tangled mess?  The patients?  They are definitely not the experts in this system.  They generally see a doctor when they have some health care concerns, otherwise they are busy with their own lives.  Are the doctors the experts?  They specialize in medicine and treatment.  They provide the care, and most don't know much about the accounting side of things.  Are the insurance companies the experts?  They are the ones that sell the insurance, create the policies that determine how much is paid for which services, determine which services and procedures can be covered... gee, doesn't that sound exactly like the ones who know the most about the money?

Between patients, doctors and the insurance companies, who is paying more?  Patients are definitely paying more.  Doctors, however much we joke about them being highly paid, are actually not very rich as a whole.  All the general practitioners we have had are actually very humble.  Are insurance companies paying more?  They always say they are working to reduce your costs... but perhaps a stock chart is more truthful:

This stock chart shows UnitedHealth Group's stock price over the past several years.  It's risen quite a lot since the 2008 recession.  Why do investors like the stock?  Because they are making a lot of profit.  This chart is not unique to UNH - Aetna, CIGNA, Humana etc are all fairly similiar.

In conclusion: healthcare costs are rising, and health insurance companies are getting more profitable.  More money is coming out of people's pockets, and somehow it ends up making the insurance companies more profitable.  You figure out who is benefiting.

I <3 USE Credit Union

My credit union is trying to encourage me to use their credit card more often, so they offered me a $20 bonus for spending $100 on my credit card in 5 or more transactions within the next 2-3 months.  If you think like an investor, that's a huge 20% return, all for using their card.  Who doesn't spend $100 on a credit card over a few months?

RISE credit is still rising with an offer for a 224.36% interest rate

RISE credit wants to offer another me another loan.  The "IMPORTANT DISCLOSURES" says:

The APR for an example installment loan of $2,600 is 224.36% with 36 bi-weekly payments of $236.37... The loan agreement and, for Texas and Ohio residents, the credit services contract you must sign in order to accept this offer, contains an arbitration provision that may limit your legal rights, including your right to go to court, to have a jury trial and to participate in class actions."

The provisions about limiting your rights should be a big warning sign about whose interests they are really trying to protect.  What does it say when companies are able to make a living with these kinds of "products"?  It means there are actually people out there who go for these kinds of deals.  Maybe some people can't tell when something is practically usury. Maybe it says more about my credit rating when I get these kinds of offers in the mail.