August 20, 2010
John G. Stumpf
President and CEO
420 Montgomery Street San Francisco, CA 94104
Dear Mr. Stumpf:
On August 11, 2010, the U.S. District Court issued an order in Gutierrez v. Wells Fargo finding that Wells Fargo manipulated the order in which it processes checks and debits to maximize the number of overdrafts your customers incur and therefore number of overdraft fees your customers pay. The court said, “[t]he supposed net benefit of high-to-low resequencing is utterly speculative. Its bone-crushing multiplication of additional overdraft penalties however, is categorically assured.”
Regardless of the next developments in the legal proceeding, the facts recited by the court in this case show that Wells Fargo has not lived up to the statement in its 2009 Annual Report, where Wells states: “[w]e want to satisfy all our customers’ financial needs and help them succeed financially.” We ask that you begin now to help your customers succeed financially by ending all overdraft programs for checks and for all types of debits except where a consumer affirmatively requests that overdrafts be paid on the account.
No customer should be loaned money without affirmatively requesting a credit feature on his or her account, and without even knowing that a loan is being made. This is the essence of an automatic fee-based overdraft program. We ask Wells Fargo to move to full “opt in” before overdraft fees will be assessed for covering overdrafts for all types of payments, including checks, recurring debits, and ACH debits.
And for customers who do choose to participate in these expensive overdraft programs make the programs safe and fair. Stop fighting in court to preserve a system which is inconsistent with basic principles of fairness.
Jean Ann Fox
Director of Financial Services
Consumer Federation of America