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“Most  customers  can’t  afford  to  repay  the  whole  loan  in  just  a  few  weeks,  and   if  the  payday  lender  deposits  their  check,  it  will  bounce,  costing  the  customer   even  more  in  fees.  So  instead  of  incurring  bounced-­‐check  fees,  the  customer   agrees  to  renew  the  loan  and  just  pays  the  interest,  or  takes  out  a  new  loan  to   pay  off  the  old  one,  leading  to  a  cycle  of  debt  that  can  last  for  months  or  even   years.”     Predatory  Payday  Lending  in  Minnesota:     How  U.S.  Bank  and  Wells  Fargo  Hurt  Consumers  with  ‘Cash  Fast’  Loans’                 New  York  Times  |  Chasing  Fees,  Banks  Court  Low-­‐Income  Customers   Huffington  Post  |  Wells  Fargo  Extends  Loans  with  Interest  Rates  Up  to  274  Percent   Star  Tribune  |  Report  Rips  Banks  on  ‘Payday’  Loans   MPR  |  Advocates  Say  US  Bank,  Wells  Fargo  Loans  Prey  on  Low-­‐income  Borrowers   Minneapolis  St.  Paul  Business  Journal  |  MN  Group  Claims  Big  Banks  Using  ‘Payday’  Loans   Twin  Cities  Business  |  U.S.  Bank,  Wells  Fargo  Criticized  for  High-­‐APR  Loans   Minnesota  Daily  |  U.S.  Bancorp’s  Money  Talks      

Chasing  Fees,  Banks  Court  Low-­‐Income  Customers  

  Jennifer  Silver-­‐Greenberg  and  Ben  Protess  |  New  York  Times  |  April  25,  2012  

  When  David  Wegner  went  looking  for  a  checking  account  in  January,  he  was  peppered  with  offers  for  low-­‐ end  financial  products,  including  a  prepaid  debit  card  with  numerous  fees,  a  short-­‐term  emergency  loan   with  steep  charges,  money  wire  services  and  check-­‐ cashing  options.   “I  may  as  well  have  gone  to  a  payday  lender,”  said   Mr.  Wegner,  a  36-­‐year-­‐old  nursing  assistant  in   Minneapolis,  who  ended  up  choosing  a  local  branch   of  U.S.  Bank  and  avoided  the  payday  lenders,   pawnshops  and  check  cashers  lining  his   neighborhood.     Along  with  a  checking  account,  he  selected  a  $1,000   short-­‐term  loan  to  help  pay  for  his  cystic  fibrosis     2  

medications.  The  loan  cost  him  $100  in  fees,  and  that  will  escalate  if  it  goes  unpaid.     An  increasing  number  of  the  nation’s  large  banks  —  U.S.  Bank,  Regions  Financial  and  Wells  Fargo  among   them  —  are  aggressively  courting  low-­‐income  customers  like  Mr.  Wegner  with  alternative  products  that   can  carry  high  fees.  They  are  rapidly  expanding  these  offerings  partly  because  the  products  were  largely   untouched  by  recent  financial  regulations,  and  also  to  recoup  the  billions  in  lost  income  from  recent  limits   on  debit  and  credit  card  fees.     Banks  say  that  they  are  offering  a  valuable  service  for  customers  who  might  not  otherwise  have  access  to   traditional  banking  and  that  they  can  offer  these  products  at  competitive  prices.  The  Consumer  Financial   Protection  Bureau,  a  new  federal  agency,  said  it  was  examining  whether  banks  ran  afoul  of  consumer   protection  laws  in  the  marketing  of  these  products.     In  the  push  for  these  customers,  banks  often  have  an  advantage  over  payday  loan  companies  and  other   storefront  lenders  because,  even  though  banks  are  regulated,  they  typically  are  not  subject  to  interest  rate   limits  on  payday  loans  and  other  alternative  products.     Some  federal  regulators  and  consumer  advocates  are  concerned  that  banks  may  also  be  steering  people  at   the  lowest  end  of  the  economic  ladder  into  relatively  expensive  products  when  lower-­‐cost  options  exist  at   the  banks  or  elsewhere.     “It  is  a  disquieting  development  for  poor  customers,”  said  Mark  T.  Williams,  a  former  Federal  Reserve   Bank  examiner.  “They  are  getting  pushed  into  high-­‐fee  options.”     “We  look  at  alternative  financial  products  offered  by  both  banks  and  nonbanks  through  the  same  lens  —   what  is  the  risk  posed  to  consumers?”  said  Richard  Cordray,  director  of  the  bureau.  “Practices  that  make  it   hard  for  consumers  to  anticipate  and  avoid  costly  fees  would  be  cause  for  concern.”     Analysts  in  the  banking  industry  say  that  lending  to  low-­‐income  customers,  especially  those  with   tarnished  credit,  is  tricky  and  that  banks  sometimes  have  to  charge  higher  rates  to  offset  their  risk.  Still,  in   an  April  survey  of  prepaid  cards,  Consumers  Union  found  that  some  banks’  prepaid  cards  come  with  lower   fees  than  nonbank  competitors.     While  banks  have  offered  short-­‐term  loans  and  some  check-­‐cashing  services  in  the  past,  they  are   introducing  new  products  and  expanding  some  existing  ones.  Last  month,  Wells  Fargo  introduced  a   reloadable  prepaid  card,  while  Regions  Financial  in  Birmingham,  Ala.,  unveiled  its  “Now  Banking”  suite  of   products  that  includes  bill  pay,  check  cashing,  money  transfers  and  a  prepaid  card.     The  Regions  package  is  meant  to  attract  the  “growing  pay-­‐as-­‐you-­‐go  consumer,”  said  John  Owen,  the   bank’s  senior  executive  vice  president  for  consumer  services.     The  packages  are  the  latest  twist  on  “cross-­‐selling,”  in  which  lenders  compete  to  win  a  larger  share  of   customer  business  with  deals  on  checking,  savings  accounts  and  mortgages.     Reaching  the  so-­‐called  unbanked  or  underbanked  population  —  people  who  use  few,  if  any,  bank  services   —  could  be  lucrative,  industry  consultants  said.  Kimberly  Gartner,  vice  president  for  advisory  services  at     3  

the  Center  for  Financial  Services  Innovation,  said  that  such  borrowers  were  a  $45  billion  untapped   market.     The  Federal  Deposit  Insurance  Corporation  estimates  that  about  nine  million  households  in  the  country   do  not  have  a  traditional  bank  account,  while  21  million,  or  18  percent,  of  Americans  are  underbanked.     Mr.  Wegner,  the  U.S.  Bank  customer,  said  that  once  he  mentioned  that  he  needed  a  bank  account,  an   employee  started  selling  him  prepaid  cards,  check  cashing  and  short-­‐term  loan  options.  Mr.  Wegner,  who   makes  about  $1,200  a  month,  said  that  he  felt  like  a  second-­‐tier  customer.     “It  was  clear  that  I  was  not  getting  the   same  pitches  that  wealthy  clients   would,”  he  said.  Since  that  initial  visit,   Mr.  Wegner  said  he  avoided  the  branch   so  he  was  not  approached  with  offers.  “I   go  through  the  drive-­‐through  now,”  he   said.   Bank  payday  loans,  which  are  offered  as   advances  on  direct-­‐deposit  paychecks,   are  a  particularly  vexing  part  of  the  new   pitch  from  lenders,  consumer  advocates   said.  The  short-­‐term,  high-­‐fee  loans,  like   the  one  Mr.  Wegner  received,  are   offered  by  a  handful  of  banks,  including   Wells  Fargo.  In  May,  Regions   introduced  its  “Ready  Advance”  loan  after  determining  that  some  of  its  customers  were  heading  to   storefront  payday  lenders.     The  loans  can  get  expensive.  When  the  loan  comes  due,  the  bank  automatically  withdraws  from  the   customer’s  checking  account  the  amount  of  the  loan  and  the  origination  fee  —  typically  $10  for  every  $100   borrowed  —  regardless  of  whether  there  is  enough  money  in  the  account.  That  can  lead  to  overdraft  and   other  fees  that  translate  into  an  annual  interest  rate  of  more  than  300  percent,  according  to  the  Center  for   Responsible  Lending.     The  Office  of  the  Comptroller  of  the  Currency,  which  oversees  the  nation’s  largest  banks,  said  in  June  that   the  loans  raised  “operational  and  credit  risks  and  supervisory  concerns.”  Last  summer,  federal  bank   regulators  ordered  MetaBank,  which  is  based  in  Iowa,  to  return  $4.8  million  to  customers  who  took  out   high-­‐interest  loans.     Lenders  are  also  joining  the  prepaid  card  market.  In  2009,  consumers  held  about  $29  billion  in  prepaid   cards,  according  to  the  Mercator  Advisory  Group,  a  payments  industry  research  group.  By  the  end  of  2013,   the  market  is  expected  to  reach  $90  billion.  A  big  lure  for  banks  is  that  prepaid  cards  are  not  restricted  by   Dodd-­‐Frank  financial  regulation  law.  That  exemption  means  that  banks  are  able  to  charge  high  fees  when   a  consumer  swipes  a  prepaid  card.    



The  companies  distributing  the  cards  have  drawn  criticism  for  not  clearly  disclosing  fees  that  can  include   a  charge  to  activate  the  card,  load  money  on  it  and  even  to  call  customer  service.  Customers  with  a   “convenient  cash”  prepaid  card  from  U.S.  Bank,  for  example,  pay  a  $3  fee  to  enroll,  a  $3  monthly   maintenance  fee,  $3  to  visit  a  bank  teller  and  $15  dollars  to  replace  a  lost  card.     Capital  One  charges  prepaid  card  users  $1.95  for  using  an  A.T.M.  more  than  once  a  month,  while  Wells   Fargo  charges  $1  to  speak  to  a  customer  service  agent  more  than  twice  a  month.     Some  smaller  banks  even  offer  prepaid  cards  with  credit  lines,  which  carry  steep  interest  charges.     “This  is  a  two-­‐tiered,  separate  and  unequal  system  and  it  is  worsening,”  said  Sarah  Ludwig,  a  lawyer  who   started  the  Neighborhood  Economic  Development  Advocacy  Project.     Some  lenders  are  even  styling  their  offices  to  look  like  check-­‐cashing  stores.  In  June,  Redstone  Federal   Credit  Union,  the  largest  credit  union  in  Alabama,  will  open  two  stores  that  are  designed  to  look  exactly   like  check  cashers.     One  of  the  stores,  in  Decatur,  Ala.,  is  part  of  a  run-­‐down  strip  mall  and  includes  a  sign  that  says  “Right   Choice,  Money  Services.”  An  adjacent  store,  not  affiliated  with  Redstone,  advertises  loans  for  people  who   “need  money  fast.”     “It  looks  like  a  check  casher,  but  once  you  get  inside  you  get  the  best  of  both  worlds,”  Peter  Alvarez,   Redstone’s  emerging  markets  manager.  The  stores  will  offer  traditional  checking  and  savings  accounts   alongside  prepaid  cards,  money  transfer  and  bill  paying.  “We  wanted  to  attract  people  who  wouldn’t   naturally  come  to  a  bank.”      

Wells  Fargo  Extends  Loans  with  Interest  Rates  Up  to  274  Percent  
Bonnie  Kavoussi  |  Huffington  Post  |  April  17,  2012  
Big  banks  are  participating  in  a  practice  commonly  associated  with  the  use  of  big  signs  to  lure  vulnerable   Americans.     Wells  Fargo,  the  country's  biggest  bank  by  market  value,  and  U.S.  Bank,  the  ninth  largest  bank  by  assets,   are  helping  bankroll  the  payday  lending  industry,  according  to  a  report  released  earlier  this  week  by   Minnesotans  for  a  Fair  Economy,  an  advocacy  organization.   According  to  the  report,  Wells  Fargo  and  U.S.  Bank  have  both  financed  top  payday  lenders  and  extend   payday  loans  to  their  own  customers  at  sky-­‐high  interest  rates:  365  percent  per  year  for  U.S.  Bank  and   274  percent  for  Wells  Fargo  on  $500  loans.  



The  findings  come  as  big  banks  face  growing  scruitiny  for  their  payday  lending  activities.  Richard  Cordray,   director  of  the  Consumer  Financial  Protection  Bureau,  said  in  January  that  the  bureau  plans  to  look  closely   at  big  banks  that  make  payday  loans.     The  nation's  top  consumer  cop  is  likely  zeroing  in  on  the   practice  because  it's  often  the  most  financially   vulnerable  consumers  that  payday  lenders  are   targeting.  About  one  in  four  bank  payday  borrowers  are   Social  Security  recipients,  and,  on  average,  bank  payday   borrowers  are  in  debt  175  days  per  year,  the  Center  for   Responsible  Lending  found  in  a  report  last  year.     Since  Wells  Fargo  and  U.S.  bank  are  nationally   chartered,  they  are  getting  around  some  state  laws  that   regulate  payday  lenders,  according  to  the  Minneapolis   Star-­‐Tribune.   Wells  Fargo  and  U.S.  Bank  also  have  financed  some  of  the  largest  payday  lenders  in  the  country.  Wells   Fargo  has  financed  Advance  America  (with  2,313  stores),  Ace  Cash  Express  (with  1,200  stores),  Check  into   Cash  (with  1,100  stores),  Check  'N'  Go  (with  1,000  stores),  Cash  America  (with  655  stores),  EZ  Corp.  (with   450  stores),  Dollar  Financial/Money  Mart  (with  312  stores),  and  First  Cash  Financial/Cash  &  Go  (with  226   stores),  according  to  the  Minnesota  report.  U.S.  Bank  also  has  financed  Advance  America,  Cash  America,   and  EZ  Corp.,  the  report  says.   Still,  Wells  Fargo  and  U.S.  Bank  told  the  Star-­‐Tribune  on  Monday  that  they  do  not  engage  in  payday   lending.  They  said  their  services  are  called  "checking  account  advances"  or  "direct  deposit  advances."   Meanwhile,  some  states  are  trying  to  crack  down  on  payday  lenders.  Some  Rhode  Island  Democratic   lawmakers  are  pushing  to  cut  the  maximum  annual  interest  rate  that  payday  lenders  can  charge  to  36   percent  from  260  percent,  according  to  the  Providence  Journal.   Through  a  proposed  ballot  initiative,  Missouri's  secretary  of  state  also  wants  to  cap  the  annual  interest   rate  charged  by  payday  lenders  at  36  percent,  according  to  the  Kansas  City  Star.  A  county  judge  recently   ruled  that  the  proposed  ballot  initiative's  summary  was  "inadequate,"  but  Missouri's  secretary  of  state   plans  to  appeal  the  decision.                         6  

Report  Rips  Banks  on  ‘Payday’  Loans  

A  Minnesota  group  claims  four  banks,  including  Wells  Fargo  and  U.S.  Bank,  charge  as  much   as  365  percent  interest  on  such  loans.  

Jennifer  Bjorhous  |  Star  Tribune  |  April  17,  2012  

  As  regulators  crack  down  on  storefront  and  Internet  payday  lenders,  a  new  report  says  four  big  banks  -­‐-­‐   including  Wells  Fargo  and  U.S.  Bank  -­‐-­‐  are  major  players  in  the  multibillion-­‐dollar  fast-­‐cash  industry,   charging  vulnerable  people  interest  rates  as  high  as  365  percent.     In  many  cases,  the  four  banks  charge  even  higher  fees  and  interest  rates  for  their  emergency  loans  than   payday  lenders,  according  to  a  brief  report  released  Monday  by  Minnesotans  for  a  Fair  Economy.  The   group  names  Wells  Fargo  Bank,  Fifth  Third  Bank,  Regions  Bank  and  Minneapolis-­‐based  U.S.  Bank.     The  St.  Paul-­‐based  organization  claims  that  Wells  Fargo  and  U.S.  Bank  are  hiding  behind  their  charters  to   avoid  the  sort  of  regulation  other  payday  lenders  face.  Formed  last  year,  the  group  is  made  up  of   community  groups,  faith  groups  and  labor  groups   such  as  the  Service  Employees  International   Union.     "The  banks  are  getting  away  with  something  that   had  drawn  legal  action  on  the  payday  lenders  you   see  on  the  street,"  said  Kevin  Whelan,  spokesman   for  Minnesotans  for  a  Fair  Economy.  "We  hope   the  leadership  at  each  institution  will  reconsider   these  business  practices."     Wells  Fargo  and  U.S.  Bank  representatives  say   they  don't  engage  in  payday  lending.       They  call  the  services  "checking  account   advances"  or  "direct  deposit  advances"  and  offer   a  list  of  features  that  make  them  different  from   payday  loans.  The  advances,  for  example,  are  only  available  to  people  who  have  checking  accounts  with   the  banks  and  make  regular  direct  deposits  into  them.   San  Francisco-­‐based  Wells  Fargo  said  another  key  difference  is  that,  unlike  with  payday  lenders,  it  doesn't   roll  over  or  extend  the  advances.  Instead,  the  amount  is  automatically  repaid  with  the  customer's  next   direct  deposit,  whenever  that  is.   Neither  bank  actually  calculates  an  annual  percentage  rate  (APR)  on  interest  for  the     loans,  saying  they  charge  straightforward  fees.     "It's  not  appropriate  to  calculate  an  APR  on  a  flat  fee  that  must  be  repaid  with  the  next  direct  deposit,"  said   U.S.  Bank  spokesman  Tom  Joyce.       7  

U.S.  Bank  introduced  its  "checking  account  advance"  in  2006,  he  said,  adding  that  a  2012  customer  survey   indicated  96  percent  of  the  customers  using  it  were  "satisfied"  or  "extremely  satisfied"  with  it,  Joyce  said.     According  to  the  Minnesotans  for  a  Fair  Economy  report,  a  $500  advance  repaid  in  the  typical  10-­‐day  term   costs  $50  at  U.S.  Bank,  which  would  be  an  APR  of  365  percent.  Over  at  rival  Wells  Fargo,  which  has   provided  such  advances  since  1994,  the  fee  for  the  same  loan  is  $37.50,  which  amounts  to  an  APR  of  274   percent.     "It  is  an  expensive  form  of  credit  and  it's  not  intended  to  solve  long-­‐term  financial  needs,"  said  Wells  Fargo   spokeswoman  Richele  Messick.     By  one  industry  estimate,  payday  lending  is  a  nearly  $40  billion-­‐a-­‐year  industry  in  the  United  States.   Payday  lenders  have  been  criticized  for  setting  loan  terms  that  keep  cash-­‐strapped  borrowers  in  perpetual   debt.  Nearly  one-­‐quarter  of  all  bank  advance  payday  borrowers  receive  Social  Security,  according  to  the   Durham,  N.C.-­‐based  Center  for  Responsible  Lending.  Many  states,  including  Minnesota,  have  been  cracking   down  on  storefront  and  click-­‐for-­‐ cash  Internet  operators.     Banks,  with  their  state  and  federal   regulators  and  federal  guarantees  on   customer  deposits,  are  supposed  to   be  different.     Critics  say  they  aren't.  Bank   advances  are  payday  loans  in   disguise,  they  argue,  with  their  short   terms,  extra  high  costs  and  the   lenders'  direct  access  to  borrowers'   accounts.     Banks  have  become  more  aggressive   in  marketing  such  products,  said   Uriah  King,  vice  president  of  state   policy  at  the  Center  for  Responsible   Lending.  Because  Wells  Fargo  and  U.S.  Bank  are  federally  chartered,  they  say  they're  not  subject  to  state   laws,  he  said.     "I  think  that's  one  of  the  real  troubling  [developments]  in  the  last  couple  of  years,"  King  said.     The  new  U.S.  consumer  watchdog,  the  Consumer  Financial  Protection  Bureau,  has  targeted  illegal   practices  among  payday  lenders  as  a  priority.  Its  investigation  includes  the  emergency  deposit  advance   products  banks  offer.     Minnesota  Attorney  General  Lori  Swanson  has  sued  eight  non-­‐bank  Internet  payday  lenders  in  recent   years  for  charging  strapped  Minnesotans  unlawfully  high  annual  interest  rates  of  up  to  782  percent.  The   state  Department  of  Commerce  has  taken  on  a  number  of  out-­‐of  state  Internet  payday  lending  companies,   too.     8  

Minnesota  law  caps  the  fees  that  can  be  charged  on  payday  loans.  For  loans  up  to  $50,  for  instance,  the  cap   is  $5.50;  for  loans  between  $350  and  $1,000,  the  limit  is  33  percent  annual  interest  plus  a  $25   administrative  fee.     David  Wagner,  a  36-­‐year-­‐old  Minneapolis  man  with  cystic  fibrosis,  said  he  used  regular  payday  lenders  for   years.  Last  year,  he  said,  he  went  to  U.S.  Bank  seeking  to  open  a  checking  account  with  overdraft   protection  and  a  bank  employee  steered  him  to  the  direct  deposit  advance  program.  Only  later  did  he   realize  how  expensive  it  was,  he  said.  He's  still  using  it  because  he  hopes  to  establish  an  ongoing   relationship  with  a  bank.     "I  don't  have  a  choice,"  said  Wagner,  explaining  that  he  cannot  make  ends  meet  with  his  Social  Security   check  and  his  part-­‐time  work  as  a  home  health  aide.     "The  payday  loans  I  get  have  helped  with  medication  and  food  for  the  house,  but  it  doesn't  help  me  get   caught  up  completely,"  Wagner  said.  "We  almost  never  get  ahead."     Jennifer  Bjorhus  •  612-­‐673-­‐4683      

Advocates  Say  US  Bank,  Wells  Fargo  Loans  Prey  on  Low-­‐Income   Borrowers  

Madeline  Baran  |  Minnesota  Public  Radio  |  April  17,  2012  
ST.  PAUL,  Minn.  —  A  new  report  claims  US  Bank  and  Wells  Fargo  are  preying  on  low-­‐income  customers  by   offering  short-­‐term  loans  with  steep  fees.     The  report  by  the  group  Minnesotans  for  a  Fair  Economy  claims  the  fees  are  the  same  or  worse  than   charges  imposed  by  traditional  payday  lenders.  Minnesotans  for  a  Fair  Economy,  which  includes   community,  faith  and  labor  groups,  has  asked  Wells  Fargo  and  US  Bank  to  stop  offering  the  loans.     "This  product  is  a  debt  trap.  That's  it.  It's  designed  for  profit  and  we  see  the  pain  that  it  offers,"  said  Darryl   Dahlheimer,  program  director  at  Lutheran  Social  Service  Financial  Counseling,  who  supports  the  group's   efforts  to  persuade  the  banks  to  stop  offering  the  loans.     The  loans  are  offered  to  customers  at  US  Bank  and  Wells  Fargo  who  have  a  bank  account  in  good  standing   and  receive  paychecks,  Social  Security  checks,  or  other  income  via  direct  deposit.  Customers  can  request   up  to  $500  in  a  cash  advance  without  completing  an  application  or  meeting  with  a  personal  banker.  The   banks  then  take  the  loan  amount,  plus  fees,  from  the  next  direct  deposit.     The  cash  advances  come  with  considerable  fees.  US  Bank  charges  $2  for  every  $20  borrowed  -­‐  a  10-­‐ percent  fee.  Wells  Fargo  charges  slightly  less  —  $1.50  for  every  $20.  Customers  pay  the  same  fee   regardless  of  whether  they  pay  the  loan  back  in  a  day  or  a  month.  US  Bank  requires  customers  to  pay  back   the  advance  and  the  fees  within  35  days.    



For  example,  a  US  Bank  customer  who  takes  out  a  $100  cash  advance  pays  $10  in  fees.  If  the  customer   pays  the  loan  back  in  10  days,  the  fees  are  the  equivalent  of  a  365  percent  annual  interest  rate,  the  report   said.     Kevin  Whelan,  spokesperson  for  Minnesotans  for  a  Fair  Economy,  said  he  does  not  know  of  any  other   banks  that  offer  similar  loans.  Officials  at  TCF  Bank  and  Bank  of  America  told  MPR  News  they  do  not  offer   this  type  of  loan.     Wells  Fargo  and  US  Bank  declined  to  provide  information  about  how  many  customers  rely  on  cash   advances  and  how  frequently  customers  use  the  advances.  A  2011  report  by  the  nonpartisan  research  and   policy  group  Center  for  Responsible  Lending  found  that  nearly  one-­‐quarter  of  all  consumers  who  use  bank   payday  advances  receive  Social  Security.  It  also  found  customers  who  rely  on  the  loans  are  in  debt  for  175   days  a  year  on  average.  The  group  compiled  the  statistics  using  nationwide  checking  account  data  from  a   private  research  firm.     US  Bank  spokesperson  Nicole  Garrison-­‐Sprenger  declined  an  interview   request.  In  an  email,  she  said  the  bank's  product,  known  as  Checking   Account  Advance,  "is  a  safety  net  for  customers  who  have  no  other  way   to  pay  for  unexpected  expenses  such  as  a  medical  emergency  or  an  auto   repair."     The  bank  is  upfront  about  the  costs,  she  said,  and  informs  customers  of   lower-­‐cost  options  that  might  be  available.  It  also  provides  what   Garrison-­‐Sprenger  called  "mandatory  'cooling  off'  periods"  to  prevent   customers  from  relying  too  frequently  on  the  short-­‐term  loans.     Some  consumer  advocates  say  the  limits  are  not  effective.  US  Bank   allows  customers  to  take  out  cash  advances  for  nine  consecutive  statement  cycles.  After  that,  the  bank   imposes  a  90-­‐day  "cooling  off  period"  before  allowing  customers  to  begin  borrowing  again.     Wells  Fargo  allows  customers  to  receive  cash  advances  for  six  consecutive  statement  periods.  After  that,   the  bank  reduces  the  amount  a  customer  can  borrow  by  $100  per  month  until  the  amount  reaches  zero.     However,  the  bank  offers  an  option  to  get  around  the  restriction,  which  it  notes  on  its  website.  "You  can   avoid  this  reduction  in  your  standard  credit  limit  if  you  do  not  take  a  new  advance  for  one  complete   statement  period  at  any  time,"  the  website  says.     Wells  Fargo  spokesperson  Richele  Messick  said  the  bank  is  transparent  about  the  high  fees  and  intends   the  loans  to  be  used  only  in  emergencies.  She  notes  that  Wells  Fargo  provides  a  monthly  payment  plan  for   some  customers  who  cannot  pay  back  the  advance  within  35  days.     "It  is  an  expensive  form  of  credit  that  is  not  intended  to  solve  longer-­‐term  financial  needs,"  Messick  said.   "And  we  have  policies  in  place  to  help  ensure  that  our  customers  do  not  use  direct  deposit  advance  as  a   long-­‐term  solution."    



Messick  said  the  cash  advances  differ  from  traditional  payday  loans  because  the  bank  does  not  allow   customers  to  roll-­‐over  debt  from  month  to  month.  Customers  have  to  pay  back  the  loan  and  fees  before   they  can  borrow  again.     But  Dahlheimer,  at  Lutheran  Social  Service,  said  the  distinction  is  irrelevant.     "Talk  about  splitting  legal  hairs,  my  goodness,"  he  said.     Dahlheimer  said  that  for  low-­‐income  consumers  who  receive  financial  counseling  at  Lutheran  Social   Service,  cash  advances  are  often  the  first  step  to  a  ruinous  cycle  of  debt  and  bankruptcy.  Customers  might   receive  quick  cash  up  front,  he  said,  but  when  part  of  their  next  paycheck  or  Social  Security  check  is  used   to  pay  back  that  debt,  customers  will  often  have  trouble  paying  that  month's  bills.  Customers  will  then   request  another  cash  advance  for  the  next  paycheck,  he  said.     In  the  long  run,  when  customers  have  reached  the  limit  for  cash  advances  or  cannot  pay  back  the  amount   owed,  they  face  bounced  checks,  overdraft  fees,  and  poor  credit,  he  said.     "It's  like  throwing  gasoline  on  the  fire  of  indebtedness,"  Dahlheimer  said.  "People  who  are  fairly   desperate,  who  have  poor  credit,  can't  have  access  to  traditional  loans,  it's  like  having  a  product  out  there   like  an  accelerant,  which  is  what  arsonists  use,  to  make  the  problem  much,  much  worse  quicker."     Banks  are  not  subject  to  state  laws  that  regulate  traditional  payday  lenders,  according  to  Wells  Fargo  and   organizers  with  Minnesotans  for  a  Fair  Economy.     Opponents  of  the  loans  have  contacted  federal  regulators  to  ask  for  a  ban  on  bank  payday  loans.  Local   community  groups  have  also  met  with  US  Bank  to  ask  them  to  stop  offering  the  loans,  said  Whelan,  the   Minnesotans  for  a  Fair  Economy  spokesperson.     "We  think  that  US  Bank  and  Wells  Fargo,  just  because  they  care  about  their  image  in  the  community  and   want  to  do  the  right  thing,  should  design  products  with  fees  that  offer  short-­‐term  credit  on  fair  terms  and   not  these  exorbitant  and  predatory  terms,"  Whelan  said.        

MN  Group  Claims  Big  Banks  Using  ‘Payday’  Loans  
Mark  Reilly  |  Minneapolis  St.  Paul  Business  Journal  |  April  17,  2012  
An  advocacy  group  is  criticizing  a  roster  of  big  banks,  including  Wells  Fargo  and  U.S.  Bancorp,  for  using   'payday'-­‐style  loans  while  avoiding  the  scrutiny  that  the  payday-­‐loan  sector  has  drawn  from  regulators.   The  Star  Tribune  reports  on  the  dispute,  which  also  cropped  up  last  year.  The  banks  say  they're  not   offering  payday  loans,  but  "direct  deposit  advances,"  while  the  group,  Minnesotans  for  a  Fair  Economy,   says  the  result  is  the  same  —  consumers  get  trapped  under  debt  and  high  interest  rates.   Minnesota  has  cracked  down  on  Internet-­‐based  payday  lenders  in  recent  months.     11  

U.S.  Bank,  Wells  Fargo  Criticized  for  High-­‐APR  Loans  

A  local  advocacy  group  released  a  report  stating  that  four  large  banks,  including  U.S.  Bank   and  Wells  Fargo,  are  charging  people  interest  rates  as  high  as  365  percent.   Nataleeya  Boss  |  Twin  Cities  Business  |  April  17,  2012    
St.  Paul-­‐based  advocacy  group  Minnesotans  For  a  Fair  Economy  has  criticized  four  large  banks,  including   U.S.  Bank  and  Wells  Fargo,  for  charging  customers  exorbitant  rates—as  high  as  365  percent—on  loans   that  resemble  payday  loans.   In  a  report  released  Monday,  the  group  said  that  while  regulators  are  constantly  cracking  down  on  smaller   payday  lenders  for  charging  customers  higher  fees  and  interest  rates  than  allowed  by  Minnesota  law,  four   large  banks  charge  even  higher  rates  for  their  emergency  loans.  In  addition  to  Minneapolis-­‐based  U.S.   Bank  and  San  Francisco-­‐based  Wells  Fargo,  which  has  a  major  Minnesota  presence,  the  group  also  named   Fifth  Third  Bank  and  Regions  Bank  in  its   report.   “The  banks  are  getting  away  with   something  that  had  drawn  legal  action  on   the  payday  lenders  you  see  on  the  street,”   Kevin  Whelan,  spokesman  for  Minnesotans   for  a  Fair  Economy,  told  the  Star  Tribune.   “We  hope  the  leadership  at  each  institution   will  reconsider  these  business  practices.”   The  group  called  out  U.S.  Bank’s  “checking   account  advance”  service,  which  charges   customers  $2  for  every  $20  borrowed,  and   Wells  Fargo’s  “direct  deposit  advance”  that   charges  $1.50  for  every  $20  borrowed.  Because  the  terms  of  these  loans  are  so  short—typically  10  days— they  amount  to  extremely  high  annual  percentage  rates  (APRs):  365  percent  at  U.S.  Bank  and  274  percent   at  Wells  Fargo,  according  to  the  report.   However,  U.S.  Bank  and  Wells  Fargo  representatives  told  the  Star  Tribune  that  these  advances  are   different  from  payday  loans  because  they  are  only  available  to  people  who  have  checking  accounts  with   the  banks  and  make  regular  direct  deposits  into  them—and  because  the  advances  are  automatically   repaid  with  the  customer’s  next  direct  deposit.  In  addition,  both  banks  claim  that  they  don’t  actually   calculate  an  APR  on  interest  for  the  loans  because  they  charge  straightforward  fees  instead.   “It’s  not  appropriate  to  calculate  an  APR  on  a  flat  fee  that  must  be  repaid  with  the  next  direct  deposit,”  U.S.   Bank  spokesman  Tom  Joyce  told  the  Minneapolis  newspaper.   U.S.  Bank  reportedly  introduced  its  “checking  account  advance”  service  in  2006.  A  2012  customer  survey   found  that  96  percent  of  the  customers  using  it  were  “satisfied”  or  “extremely  satisfied”  with  it,  Joyce  said.     12  

U.S.  Bancorp’s  Money  Talks  (OPINION)  
Candice  Wheeler  |  Minnesota  Daily  |  April  25,  2012  
I’ve  been  screwed  over  by  my  bank  a  handful  of  times  due  to  obscene  overdraft  fees  —  a  charge  that  can   be  as  much  as  $35  each  day  it  goes  unpaid.   U.S.  Bank  and  Wells  Fargo  are  offering  their  customers  who  receive  paychecks  via  direct  deposit  the   option  of  short-­‐term  loans  to  act  as  a  safety  net  to  catch  those  fees  before  they  skyrocket.  Some  people  rely   on  these  types  of  loans,  which  charge  a  10  percent  fee,  to  get  them  out  of  their  financial  binds.   The  advocacy  group  Minnesotans  for  a  Fair  Economy  is  calling  these  “paycheck”  loans  an  unavoidable   debt  trap  for  low-­‐income  borrowers.  The  group  has  also  criticized  the  banks  for  their  lack  of  foreclosure   assistance  in  mainly  black  and  Latino  neighborhoods.  Last  year’s  $452  million  in  total  mortgage  revenue   was  an  all-­‐time  record  for  U.S.  Bank.   In  their  first  quarter  of  2012,  U.S.  Bank  recorded  a  net  income  of  $1.3  billion  —  9  percent  higher  than   2011.  These  figures  are  driven  by  a  7-­‐percent  growth  in  net  interest  income  and  an  11  percent  growth  in   fee  revenue.   But  cash  advances,  despite  the  high  fees,  can  be  helpful  when  used  as  a  safety  net  for  faulty  pending   transactions  that  often  lead  to  an  overdraft.  In  2011,  customers  paid  approximately  $31.6  billion  in   overdraft  fees.   U.S.  Bank  allows  customers  to  use  the  loans  continually  for  up  to  nine  months,  followed  by  90-­‐day  break   before  they  can  start  up  again.   There’s  no  doubt  these  advances  could  send  those  who  are  financially  unstable  into  a  habitual  cycle  of   debt;  any  loan  or  credit  card  could.  But  there  isn’t  necessarily  any  harm  in  offering  the  loans.  It’s   essentially  the  customer’s  decision  whether  or  not  to  utilize  the  funds,  and  it’s  reassuring  to  have  that   emergency  cash  available  at  my  fingertips.   Candice  Wheeler  welcomes  comments  at  


Shareholder  Spring:  U.S.  Bank  and  Wells  Fargo  





  Los  Angeles  Times  |  Protesters  Disrupt  Wells  Fargo  Shareholder  Meeting   Mother  Jones  |  Wells  Fargo  Turns  Away  Its  Own  Shareholders  From  Its  Shareholder  Meeting   Star  Tribune  |  U.S.  Bancorp  Ride  Mortgage  Surge   KSTP  TV    |  Tax  Day  Rally  Focuses  on  Banks,  Wealthy  Americans     WCCO  Radio  |  Protesters  Gather  at  U.S.  Bank  Shareholder’s  Meeting   The  Uptake  |  “U.S.  Bank  and  Wells  Fargo  Throw  Families  onto  the  Street”       [In  the  print  and  online  editions  of  the  Los  Angeles  Times,  a  photo  featuring  SEIU  Local  26  activist   Gerardo  Cajamarca  was  included.  Cajamarca  was  part  of  our  Minnesota  delegation.  The  photo  is  included   below.]    

Protesters  Disrupt  Wells  Fargo  Shareholder  Meeting  

Despite  the  tumult,  Wells  Fargo  said  96%  of  investors  casting  nonbinding  "say  on  pay"  votes   supported  CEO  John  Stumpf's  $19.8-­‐million  compensation  package.     E.  Scott  Reckard  |  Los  Angeles  Times  |  April  25,  2012    
SAN  FRANCISCO  —  Wells  Fargo  &  Co.  Chief  Executive  John  Stumpf  got  to  keep  his  pay,  but  little  else  went   the  banker's  way  during  an  acrimonious  annual  shareholder  meeting.     14  

  Demonstrators  swarmed  the  Merchants  Exchange  Building  in  San  Francisco's  financial  district  to  protest   the  bank's  lending  and  foreclosure  policies.  Some  shareholders  couldn't  get  into  the  meeting  as  the  crowd,   which  police  estimated  exceeded  1,000  people,  shut  down  nearby  streets.     Inside  the  meeting,  Stumpf  was  disrupted  by  protesters  who  made  it  into  the  auditorium:  "The  time  for   talk  is  over,"  said  Richard  Smith,  an  Episcopal  priest  in  the  low-­‐income  Mission  District  who  urged  Wells   Fargo  executives  to  show  compassion  for  struggling  borrowers.     Despite  the  tumult,  shareholders  voted  to  embrace  Stumpf's  stewardship.  The  bank  said  96%  of  investors   casting   nonbinding  "say   on  pay"  votes   supported  the   CEO's  $19.8-­‐ million   compensation   package.  He's   earned  about  $60   million  over  the   last  three  years.     That's  in  sharp   contrast  to   Citigroup  Inc.   shareholders'  vote   last  week  against   CEO  Vikram   Pandit's  $14.9-­‐ million  pay   package  for  2011.   The  difference   between  Citi  and   Wells  Fargo  might   reflect  the  banks'   comparative  performance  during  and  after  the  financial  crisis.     Citi  required  two  government  bailouts  to  survive,  and  its  stock  still  languishes  at  less  than  10%  of  its  pre-­‐ crisis  high.  Wells  weathered  the  crisis  in  far  better  shape  and  has  recovered  more  than  90%  of  its  pre-­‐ crisis  share  price,  with  its  profits  now  approaching  record  levels.       Demonstrators,  many  from  the  Occupy  Wall  Street  movement,  say  Wells  Fargo's  success  has  come  at  its   customers'  expense.  They  demanded  that  Wells  Fargo  halt  foreclosures,  divest  investments  in  prison-­‐ management  companies,  end  high-­‐interest  payday  lending  and  forgive  debts  of  struggling  borrowers  with   underwater  mortgages.       15  

Eight  demonstrators  were  cited  for  trespassing  after  causing  disruptions  at  the  meeting  or  in  the  streets   outside,  San  Francisco  police  said.  One  long-­‐haired,  bearded  man  who  identified  himself  as  Stardust  was   led  to  a  sheriff's  van  with  his  hands  bound  behind  him,  protesting:  "I  have  a  legal  proxy  to  enter  and  they   refused  me."     The  protesters  operated  under  the  "99%  Power"  banner,  referring  to  those  not  among  America's  highest   income  earners.  They  included  labor  groups,  community  activists  and  a  coalition  of  30  San  Francisco   religious  leaders  who  led  a  prayer  session  with  readings  from  the  Bible  and  Koran.     "Do  not  profit  by  the  blood  of  your  fellows,"  said  a  Torah  quotation  read  by  Camille  Shira  Angel,  rabbi  of  a   Reform  synagogue.     Protesters  also  pushed  a  mock  stagecoach  reading  "Hells  Fargo"  through  the  streets  and  shouted  through   a  loudspeaker  next  to  a  giant,  cigar-­‐smoking  inflatable  rat:  "The  99%  have  arrived  at  the  building.  The  1%   are  not  getting  in."     But  in  the  end  the  demonstrators  complained  they  couldn't  get  into  the  meeting.     Marguerite  Young,  a  service  workers  union  organizer,  said  Wells  Fargo  had  allowed  entry  by  only  20  or  30   of  more  than  200  protesters  who  had  bought  shares  of  the  bank's  stock.  Wells  had  packed  the  ballroom   with  workers  from  its  offices  early  in  the  day,  she  said.     "The  rest  of  the  room  —  about  250  people  —  are  their  own  employees,  members  of  the  board  and   officers,"  she  said.     Wells  spokesman  Ancel  Martinez  said  access  had  been  restricted  as  a  matter  of  security.  "San  Francisco   P.D.  made  the  call  that  we  needed  to  shut  it  down,"  he  said.     Martinez  said  it  was  the  first  time  in  memory  that  there  had  been  no  questions  at  an  annual  meeting.  It   lasted  45  minutes,  compared  with  21/2  hours  last  year.    


Wells  Fargo  Turns  Away  Its  Own  Shareholders  From  Its   Shareholder  Meeting  
Josh  Harkinson  |  Mother  Jones  |  April  24,  2012  
"I  would  not  want  to  work  for  Wells  Fargo,"  one  woman  on  lunch  break  in  downtown  San  Francisco  loudly   told  her  friend.   No  kidding.  At  around  noon  today,  some  2,000  activists  launched  a  blitzkrieg  against  the  bank's  annual   shareholder  meeting  at  the  Merchants  Exchange  Building,  where  they  blocked  entrances,  inflated  a  two-­‐ story  cigar-­‐smoking  rat  in  the  street,  and  deployed  hundreds  of  shareholder  activists  to  pack  the  joint.     16  

Citing  space  constraints,  the  bank  turned  away  many  of  the  shareholders,  a  move  protesters  quickly   decried  as  an  illegal  attempt  to  dodge  tough  questions.  A  press  release  from  the  activist  group  the  Alliance   of  Californians  for  Community  Empowerment  claimed  Wells  Fargo  packed  the  meeting  with  its  own   employees,  and  continued  to  let  shareholders  who  were  not  part  of  the  protest  in  through  a  side  door.   A  Wells  Fargo  spokesman  did  not  immediately  return  my  call.   In  the  building  lobby,  I  ran  into  Wells  Fargo  shareholder  Andrew  Constans,  who  was  wearing  a  suit   and  tie  and  holding  a  paper  copy  of  his  single  share  of  stock.  The  19-­‐year-­‐old  University  of   Minnesota  student  flew  halfway  across  the  country  to  tell  Wells  Fargo  that  it  should  pay  more   taxes.  (Between  2008  and  2010,  Wells  Fargo  paid  none,  but  got  $681  million  in  tax  credits.)  "I  pay   taxes,  so  why  can't  they?"  Constans  asked.  "I'm  not  a  multinational  corporation;  I  don't  have  60  tax   shelters."   The  Wells  Fargo  protest  is  part  of  an   effort  on  the  part  of  99%  Power,  a   coalition  of  dozens  of  labor  and   community  groups  that  plans  to   target  some  40  corporate   shareholder  meetings  over  the  next   six  weeks.  "It's  a  broader  group  than   normally  does  shareholders   meetings,"  says  Stephen  Lerner,  an   executive  board  member  with  the   Service  Employees  International   Union.  "It's  a  campaign  that's  saying,   let's  gather  all  the  folks  who  are   impacted  negatively  by  these  giant   corporations  and  lets  figure  out  ways   to  illustrate  that  and  challenge  them   directly  at  the  meetings."   That  strategy  was  on  full  display   today  in  downtown  San  Francisco,  where  demonstrators  hit  Wells  Fargo  from  every  possible  angle.  A   speaker  with  the  immigrants  rights  group  Causa  Justa  pointed  out  that  Wells  Fargo  is  a  shareholder  in   Corrections  Corporation  of  America,  a  private  prison  firm  that  profits  from  detaining  illegal  immigrants.   Bob  Donjacour,  a  freelance  computer  programmer  and  member  of  Occupy  San  Francisco,  held  a  sign  that   said,  "Stop  Funding  Dirty  Power,"  highlighting  the  bank's  investments  in  oil  and  gas.  Other  protesters   criticized  Wells  Fargo's  involvement  in  the  American  Legislative  Exchange  Council,  the  excessive  salary  of   CEO  John  Stumpf  ($19  million  in  2010),  and,  of  course,  its  foreclosure  practices.   On  the  corner  of  Pine  and  Sansome  Streets,  I  ran  into  artist  Cheryl  Meeker,  a  member  of  an  Occupy-­‐related   protest  group  known  as  Don't  Just  Click  There.  "It's  about  doing  things  in  real  life,  like,  physically,"  she   explained.  She  was  blocking  the  intersection  with  a  long  cloth  banner  with  flames  on  it  as  others  held  up   signs  reading,  "Hells  Fargo."   "Do  you  think  we  can  get  through?"  asked  two  guys  in  nice  suits.     17  

Meeker  declined,  but  did  give  each  of  them  a  dollar  bill.  It  sported  an  image  of  humans  pulling  a   stagecoach  with  the  caption:  "Debt  slavery."   According  to  press  reports,  24  people  were  arrested  at  the  protests,  including  several  who  disrupted  the   shareholder  meeting  from  within.  Meanwhile,  Wells  Fargo  announced  record  profits  and  awarded  CEO   John  Stumpf  a  $19.8  million  pay  package.    

U.S.  Bancorp  Ride  Mortgage  Surge  
  Revenue  growth  at  the  Minneapolis-­‐based  bank  was  the  strongest  in  two  years.  Earnings  rose   28  percent,  but  shares  rose  only  1  percent.     Jennifer  Bjorhous  |  Star  Tribune  |  April  18,  2012  
  U.S.  Bancorp  beat  Wall  Street  estimates  Tuesday  on  strong  overall  loan  growth  plus  a  surprising  surge  in   mortgage  activity.     Although  profits  dropped  a  skosh  from  the  previous  quarter,  when  the  bank  benefited  from  a  one-­‐time   settlement  gain,  they  were  up  28  percent  from  a  year  earlier  to  $1.3  billion,  or  67  cents  per  share,  topping   Wall  Street  expectations  for  64  cents.     The  Minneapolis-­‐based  bank  saw  revenue  jump  9  percent  in  the  first  quarter  over  a  year  ago,  to  $4.9   billion,  its  strongest  revenue  growth  in  two  years.  The  increase  reflects  a  7.3  percent  rise  in  net  interest   income  and  an  11.3  percent  jump  in  non-­‐  interest  income,  mainly  driven  by  strong  mortgage  banking.     The  lender  also  boosted  income  by  about  $90  million  by  setting  aside  less  to  cover  bad  loans.     Except  for  higher-­‐than-­‐expected  earnings,  results  were  "right  down  the  fairway,"  analysts  at  Robert  W.   Baird  &  Co.  said  in  a  research  note.  U.S.  Bank  shares  closed  Tuesday  at  $31.55,  up  about  1  percent.     U.S.  Bank  is  regarded  as  one  of  the  country's  most  profitable  and  best-­‐run  big  banks,  and  already-­‐high   investor  expectations  likely  muted  reaction  to  the  lender's  solid  earnings  report.     Investors  were  also  likely  concerned  about  fee  income  from  debit  and  credit  cards,  said  Erik  Oja,  banking   industry  analyst  at  S&P  Capital  IQ.  "I  think  that  was  much  worse  than  expected,  which  is  one  reason  why   the  stock  isn't  up  that  much  today,"  Oja  said.     Oja  said  he  was  concerned  about  the  bank  being  able  to  maintain  the  mortgage  pace  as  it  cashes  in  on  the   boom  in  people  refinancing  their  mortgages.  The  $452  million  in  total  mortgage  revenue  is  an  all-­‐time   record  for  the  bank,  he  said,  and  about  twice  what  it  usually  makes.     "It's  unsustainable,  but  it's  really  good,"  Oja  said.    



In  a  conference  call  with  analysts,  U.S.  Bancorp  CEO  Richard  Davis  said  the  company  has  been  strategically   taking  mortgage  business  from  smaller  banks  and  larger  banks  backing  away  from  that  sector.  It's  a   market  share  opportunity  "you  only  get  once  in  a  lifetime,"  he  said.     The  bank's  other  source  of  revenue,  net  interest  income,  saw  growth  driven  by  investment  securities,  a   change  in  the  classification  of  credit  card  balance  transfer  fees  as  interest  income  and  a  6.4  percent  rise  in   average  total  loans,  including  residential  mortgages,  commercial  loans,  credit  card  loans  and  commercial   real  estate  loans.     Its  mortgage  loan  volume  grew  by  20  percent,  and  its  commercial  loan  volume,  which  includes  loans  to   small  businesses,  rose  17  percent.     The  bank's  credit  card  balance  was  boosted  by  its  acquisition  of  a  $700  million  portfolio  of  credit  cards   from  Bank  of  America.     Analysts  said  it's  difficult  to  know  just  how   much  of  the  bank's  overall  loan  growth  is   organic,  as  opposed  to  taking  business  away   from  competitors.     Davis  told  analysts  that  U.S.  Bank  expects  to   recoup  by  year's  end  about  half  the  revenue  it   has  lost  from  various  new  federal  regulations,   such  as  a  cap  on  what  banks  can  collect  on  debit   card  swipes.  Without  elaborating,  he  said  part   of  that  recovery  will  come  from  "some  increase   in  certain  fee  categories."     "We're  going  to  be  very  careful,"  he  said.     David  also  indicated  the  bank  may  make  more   acquisitions  in  other  banks,  or  corporate  trust   and  payment  operations.     The  bank  announced  last  month  that  it  will  raise  the  dividend  payout  for  shareholders  56  percent  to  78   cents  per  share  from  50  cents  annually.  It  also  said  it  will  buy  back  100  million  shares  of  common  stock   over  the  next  year.  It  repurchased       16  million  shares  in  the  first  quarter.     At  the  bank's  annual  shareholders  meeting  Tuesday  in  downtown  Minneapolis,  Davis  fielded  several   questions  from  attendees  on  foreclosures,  taxes  and  the  critical  need  for  banks  to  facilitate  wire  transfers   of  money  to  Somalia,  a  major  issue  for  the  Somali  community  in  Minnesota.     Many  of  the  people  asking  questions  were  linked  to  a  St.  Paul-­‐based  activist  group  called  Minnesotans  for   a  Fair  Economy,  a  coalition  of  community,  faith  and  labor  groups  that  also  organized  a  protest  outside  the   meeting.     19  

  On  Monday,  the  group  issued  a  short  report  critical  of  the  expensive  short-­‐term,  emergency  advances  that   both  U.S.  Bank  and  Wells  Fargo  make  to  customers  with  direct  deposit  checking  accounts,  accusing  them   of  making  payday  loans  that  take  advantage  of  vulnerable  people.     Jennifer  Bjorhus  •  612-­‐673-­‐4683      

Tax  Day  Rally  Focuses  on  Banks,  Wealthy  Americans    
  Scott  Theisen  |  KSTP  TV  |  April  17,  2012  

  Some  Minnesotans  used  this  tax  deadline  day  to  protest  banks  and  wealthy  Americans,  who  they  say  don't   pay  their  fair  share  in  taxes.     The  group  Minnesotans  for  a  Fair  Economy  led  a  rally  outside  the  Minneapolis  Convention  Center,  where   U.S.  Bank  held  its  annual  shareholder  meeting.   Protesters  say  the  banks  are  holding  onto  their  profits  too  tightly  and  not  doing  enough  to  help  average   Americans.      

Protesters  Gather  at  U.S.  Bank  Shareholder’s  Meeting  
  Chris  Simon  |  WCCO  Radio  |  April  17,  2012  

  MINNEAPOLIS  (WCCO)  –  Protestors  gathered  Tuesday  morning  outside  the  Minneapolis  Convention   Center,  where  shareholders  of  the  Minneapolis-­‐based  U.S.  Bank  were  scheduled  to  start  their  annual   meeting.     The  group  —  Minnesotans  For  a  Fair  Economy  —  is  using  Tax  Day  to  underscore  the  demand  that  big   banks  do  more  to  help  the  “99  percent.”     Kevin  Wayland,  with  the  group,  says  a  number  of  Americans  are  unhappy  with  how  rich  corporate   America  and  politicians  have  gotten  away  with  creating  economic  turmoil.     “People  are  going  to  rally  outside  here  of  the  U.S.  Bank  shareholders’  meeting,  and  they  will  then  march   down  to  the  Wells  Fargo  headquarters  and  ask  that  the  banks  that  got  billions  in  bailouts  start  paying   their  fair  share  of  taxes  and  stop  lobbying  for  loopholes  and  tax  breaks  for  CEO’s  and  big,  bailed-­‐out   banks,”  said  Wayland.     He  said  the  group’s  demand  is  that  banks  like  U.S.  Bank  and  Wells  Fargo  stop  lobbying  for  the  interests  of   the  so-­‐called  “1  percent”  and  begin  to  act  on  behalf  of  the  communities  that  they  serve.         20  

“U.S.  Bank  and  Wells  Fargo  Throw  Families  onto  the  Street”  
  Jacob  Wheeler  |  The  Uptake  |  April  17,  2012  
“If  US  Bank  and  Wells  Fargo  truly  care  about  this  community,  why  are  they  so  intent  to  throw  families  out   on  the  street,  and  empty  the  neighborhoods  of  Minneapolis,”  asked  SEIU  activist  Mark  Freeman  at  a   spirited  Tax  Day  rally  in  front  of  Wells  Fargo’s  headquarters.   Meanwhile,  activists  with  Minnesotans  for  a  Fair  Economy,   homeowners  who  have  taken  the  Occupy  Homes  pledge  to  stay  in   their  foreclosed  properties,  and  Somali  Americans  who  are  unable  to   transfer  money  to  families  in  their  war-­‐torn  homeland,  successfully   penetrated  US  Bank’s  shareholders  meeting  at  the  Minneapolis   Convention  Center.  They  peppered  CEO  Richard  Davis  with  demands   that  US  Bank  pay  more  in  taxes  and  negotiate  with  homeowners   facing  foreclosure  whose  mortgages  are  or  were  at  one  time   controlled  by  US  Bank.   Pressure  on  big  banks  working    “The  99%  have  been  putting  pressure  on  US  Bank  and  other  big   banks  for  months  now  and  it’s  working,”  said  John  Vinje,  whose  Bloomington,  Minnesota,  home  is  at  risk   of  being  sold  through  a  sheriff’s  sale.  “We  will  stay  in  our  home  and  want  to  find  a  solution  with  the  bank.   I’m  here  today  to  appeal  personally  to  the  CEO  of  US  Bank,  asking  him  for  his  assistance  in  making  sure   that  happens.”   “US  Bank  and  their  leaders  who  are  here  today  have  the  ability  to  restore  the  lifeline  to  Somalia,”  said   Ibrahim  Nur,  an  activist  who  works  with  the  local  Somali  community.  “While  members  of  their  staff  have   met  with  us,  we  still  do  not  have  a  solution.  Each  day  that  this  crisis  continues,  more  and  more  of  our   families  suffer.”   Monique  White,  a  North  Minneapolis  homeowner  and  single  mother  who  faces  foreclosure  even  though   she  works  two  jobs,  has  become  a  catalyst  for  the  Occupy  Homes  movement,  in  Minneapolis  and   nationwide.  During  a  shareholder  question  and  answer  session,  White  asked  Davis  for  US  Bank  to   renegotiate  her  mortgage,  which  is  currently  in  the  hands  of  the  lending  company  Freddie  Mac.  Davis   reportedly  gave  her  a  curt  response,  but  offered  to  meet  with  White  after  the  shareholder’s  meeting.  He   did  so,  and  reportedly  offered  to  have  his  Vice  President  look  further  into  her  case.  [See  photo  below:   Interview  with  Monique  White  to  come  later  tonight.]   While  Richard  Davis  addressed  US  Bank  shareholders  —  and  activists  posed  as  shareholders  —   approximately  200  demonstrators  marched  from  the  Convention  Center,  down  Nicolet  Mall,  to  Wells   Fargo’s  headquarters,  where  they  held  a  spirited  rally,  posted  a  “bill”  for  “$21.6  billion  Wells  Fargo  owes   the  99%”,  and  asked  the  bank  to  pay  its  fair  share  in  taxes.  Leading  them  on  the  march  through  downtown   Minneapolis  were  caricatures  of  Richard  Davis  and  Wells  Fargo  Vice  President  Jon  Campbell,  riding  on  a   horse-­‐drawn  carriage  and  taunting  pedestrians  on  the  street  for  paying  more  in  taxes  than  they  do.     21  

CTUL  Press  Conference      






                     April  25,  2012    

“We,  the  workers  who  clean  different  stores  like  Kmart,  Sears,  Best  Buy,  Target,  and  others,  contribute  to  the   prestige  of  these  stores  through  our  work…But  what  happens  with  us,  the  workers  who  carry  out  the  cleaning   work?    The  stores  contract  different  companies  like  Diversified  and  Carlson  among  others,  who  then   overwork  and  underpay  the  cleaning  workers.”         Alejandro  Quirino,  Diversified  Maintenance  worker.     Star  Tribune  |  Janitors:  Contractor  Didn’t  Play  by  Rules   Workday  Minnesota  |  Study,  Lawsuit  Expose  Exploitation  Faced  by  Retail  Cleaning  Workers      

Janitors:  Contractor  Didn’t  Play  by  Rules  

Cleaners  at  big-­‐box  stores  file  a  lawsuit,  saying  their  boss  didn't  pay  overtime.   Dee  DePass  |  Star  Tribune  |  April  26,  2012  
A  group  representing  janitors  hired  to  clean  big-­‐box  retail  stores  in  the  Twin  Cities  released  a  report   Wednesday  alleging  industrywide  abuses  by  their  employer,  Diversified  Maintenance  Systems,  for  failing   to  pay  mandatory  overtime  and  threats  of  firing.   The  national  report,  commissioned  by  Centro  de  Trabajadores  Unidos  en  Lucha  (Center  for  Workers   United  in  Struggle)  and  the  Service  Employees  International  Union,  was  unveiled  on  Nicollet  Avenue  in   Minneapolis  in  front  of  a  Kmart  store.  Other  retailers  that  contract  with  Diversified  Maintenance  include   Target  and  Best  Buy.   Stephen  Philion,  St.  Cloud  State  University's   director  of  the  Faculty  Research  Group  on   Immigrant  Workers  in  Minnesota,  read   parts  of  the  report,  which  detailed  U.S.   Department  of  Labor  investigations   spanning  10  years.  It  also  outlined  lawsuits   against  commercial  cleaning  firms  that   specialized  in  retail  stores.   Philion  cited  cases  in  which  paychecks   bounced,  where  Latino  janitors  were  forced   to  pay  managers  a  "deposit"  to  get  hired   and  where  workers  weren't  paid  overtime.   In  October,  12  Twin  Cities  janitors  sued   Tampa-­‐based  Diversified  Maintenance  in   U.S.  District  Court  in  Minneapolis  for     22  

allegedly  failing  to  pay  qualifying  workers  overtime,  a  claim  the  company  denied.   "We  do  not  agree  with  those  allegations  and  we  have  evidence  to  the  contrary,"  said  Diversified  attorney   Phillip  Russell  from  the  law  firm  of  Ogletree  Deakins  in  Tampa.  "We  are  vehemently  denying  their  case   and  we  will  do  so  in  court."  Russell  took  issue  with  the  plaintiffs  and  their  attorney  holding  a  press   conference.  "It's  disappointing.  It's  not  a  very  professional  way  to  litigate  a  case,"  Russell  said.   Plaintiffs  attorney  Michael  Healy  told  the  crowd  of  about  40  that  two  more  plaintiffs  joined  the  suit,  which   he  seeks  to  get  certified  as  a  class  action.   Along  with  Healy,  10  DMS  janitors  came  Wednesday  to  share  their  stories.  Flanked  by  union  members,   attorneys  and  immigrant  advocates,  the  janitors  said  they  were  hired  by  DMS  to  clean  Target,  Best  Buy  or   Kmart  stores  around  the  Twin  Cities.  They  alleged  being  made  to  work  seven  days  a  week  with  no   overtime  pay.   Royce  Reder,  who  spent  five  years  cleaning  the  same  Kmart  store  where  he  stood,  said  a  DMS  manager   recently  told  him  he  had  to  work  four-­‐hour  shifts  for  seven  days  a  week  instead  of  his  usual  five-­‐day,  40-­‐ hour  shift.  If  he  refuses,  "I  will  lose  my  job,"  said  Reder,  who  has  not  joined  the  lawsuit.   Leticia  Baeza,  who  joined  the  suit  in  October,  said  she  was  made  to  work  seven-­‐day  weeks  without   overtime.  She  estimates  she  is  due  $26,000.   Dee  DePass  •  612-­‐673-­‐7725    

Study,  Lawsuit  Expose  Exploitation  Faced  by  Retail  Cleaning   Workers  
  Workday  Minnesota  |  April  26,  2012  
  MINNEAPOLIS  -­‐  The  workers  who  clean  major  retail  stores  like  Kmart,  Target  and  Best  Buy  often  face   shocking  conditions  of  exploitation,  including  heavy  workloads,  long  hours  and  lost  wages,  according  to  a   new  study  of  the  industry  and  a  lawsuit  against  a  major  cleaning  contractor.  The  information  was  released   Wednesday  by  CTUL,  Centro  de  Trabajadores  Unidos  en  Lucha/the  Center  for  Workers  United  in  Struggle,   a  community  organization  that  works  for  fair  wages  and  better  conditions  for  retail  cleaning  workers,   many  of  whom  are  recent  immigrants.     Last  fall,  workers  employed  by  Diversified  Maintenance  Systems,  a  cleaning  contractor  for  retail  stores   including  Kmart,  Target,  and  Best  Buy,  filed  suit,  charging  that  the  cleaning  contractor  required  them  to   work  up  to  80  hours  a  week  without  overtime  pay.  Diversified  Maintenance  has  been  the  subject  of  at  least   six  private  lawsuits  and  an  investigation  by  the  U.S.  Department  of  Labor  over  its  failure  to  pay  overtime   wages.       The  lawsuit  can  be  downloaded  at  this  website.     23  

“I  worked  for  Diversified  for  about  three  years,  seven  days  a  week,  eight  hours  a  day,”  Maria  Cruz,  one  of   the  workers  who  brought  the  lawsuit,  said  at  Wednesday’s  news  conference.     “I  was  told  by  management  that  I  had  to  punch  in  five  days  with  my  name  and  employee  number.  For  the   other  two  days  I  was  told  to  punch  in  with  the  name  and  number  of  a  ‘ghost  employee.’  I  was  then  paid   cash  for  those  days,  but  I  was  not  paid  at  the  overtime  rate.  Over  three  years,  that’s  a  lot  of  money,”    


Members  of  CTUL  spoke  out  about  the  conditions  facing  retail-­‐cleaning  workers   at  a  news  conference  Wednesday.     At  the  same  news  conference,  CTUL  released  a  report  indicating  low  wages  and  other  problems  “pervade   the  retail  janitorial  industry  in  Minnesota  and  throughout  the  United  States.”  The  report,  “Dirty  Business:   Worker  Exploitation  in  the  Retail  Janitorial  Industry”  can  be  found  at  the  CTUL  website.     The  report  shows  that  many  of  the  cleaning  contractors  hired  by  retail  stores  in  Minnesota  and   throughout  the  United  States  regularly  failed  to  pay  overtime  to  janitors  who  work  well  in  excess  of  40   hours  a  week.     "This  study  sheds  light  on  the  reality  faced  by  thousands  of  retail  cleaning  workers  around  the  country  as   well  as  here  in  the  Twin  Cities,  citing  multiple  examples  of  federal  lawsuits  and  United  States  Department   of  Labor  investigations  that  have  happened  in  the  industry  regarding  unpaid  overtime  wages,  all  taking     24  

place  over  the  past  decade.  It  is  shocking  to  learn  that  such  conditions  exist  in  the  shadow  of  stores  like   Kmart  and  Sears,”  said  Stephen  Phillon,  associate  professor  of  sociology  at  St.  Cloud  State  University,  who   reviewed  the  findings.     “As  a  sociologist  who  studies  the  social  conditions  of  immigrant  labor  in  Minnesota,”  Phillion  continued,   “this  white  paper  stands  out  as  a  powerful  one  precisely  because  methodologically  it  pulls  together   relevant  data  from  relevant  government  agencies,  Minnesota  retail  cleaning  workers  who  have  directly   experienced  the  consequences  of  intensified  and  out-­‐of-­‐control  national  and  global  competition,  and  even   industry  officials  themselves.  "     According  to  the  report,  department  stores  and  supermarkets  contract  out  their  janitorial  work  seemingly   to  cut  costs  and  avoid  responsibility.  There  is  fierce  competition  among  the  janitorial  companies  for  these   contracts,  with  each  company  trying  to  underbid  the  other.  Since  labor  is  by  far  the  largest  and  most  costly   expense  in  a  cleaning  contract,  the  company  with  the  lowest  labor  costs  tends  to  win  the  contract.     In  some  cases,  workers  believe  the  janitorial  companies  try  to  minimize  their  labor  costs  with  practices   such  as  not  paying  overtime  or  by  requiring  employees  to  get  more  work  done  in  a  shorter  period  of  time.       “I  held  two  jobs  because  of  the  low  wages.  We  work  in  a  place  filled  with  food  and  yet  we  can  barely  feed   our  families,”  said  Mario  Colloly  Torres,  who  used  to  clean  a  supermarket  and  now  works  with  CTUL.   "They  look  for  a  cleaning  company  that  is  going  to  give  the  lowest  price  for  the  work.  The  result  for  us:   lower  wages  and  increased  workloads.”     The  report  argues  that  contractors  count  on  the  predominantly  immigrant  workforce  not  being  aware  of   their  rights  or  being  afraid  of  retaliation  if  they  complain.  In  one  case,  a  Philadelphia  cleaning  company   even  went  so  far  as  to  enslave  their  workers  and  to  threaten  the  workers  and  their  families  with  physical   violence  if  they  try  to  escape.     The  report  will  be  distributed  to  elected  officials  and  other  decision-­‐makers,  CTUL  said.  The  lawsuit   against  Diversified  Maintenance  Systems  is  currently  in  the  discovery  phase,  attorney  Michael  Healey  said,   and  may  go  to  trial  in  about  18  months.                                     25  

ISAIAH  Prophetic  Voices  Conference  




                     April  26,  2012    

Faith  based  organizations  ISAIAH,  Jewish  Community  Action  and  the  Stairstep  Foundation  convened  a   gathering  of  250  faith  leaders  from  150  congregations  in  St.  Paul  on  Thursday,  April  26  to  launch  a  statewide   “Prophetic  Voices  Campaign"  that  will  engage  congregations  and  clergy  to  "vote  on  values."  The  effort  will   unite  congregations  under  a  common  a  five-­‐point  values  statement  to  address  issues  including  voting  rights   and  racial  disparities  in  education,  health  care  and  jobs  during  and  after  the  state's  2012  legislative   elections.  ISAIAH  will  also  work  with  15  congregations  in  the  western  metro  suburbs  and  St.  Cloud  to  contact   25,000  eligible  voters  in  a  values-­‐based  civic  engagement  effort.     Star  Tribune  |  Minnesota  Faith  Leaders  to  Launch  ‘Voter  Education’  Campaign        

Minnesota  Faith  Leaders  to  Launch  ‘Voter  Education’  Campaign  
Rose  French  |  Star  Tribune  |  April  25,  2012  
Some  250  faith  leaders  from  150  congregations  are  launching  a  statewide  “voter  education”  campaign  that   “will  teach  people  how  to  view  public  leaders,  candidates  and  policy.”     The  faith  groups  ISAIAH,  Jewish  Community  Action  and  His  Works  United/Stairstep  Foundation  will  start   the  “Prophetic  Voices”  campaign  on  Thursday  at  a  day-­‐long  conference  held  at  the  Crowne  Plaza  Hotel  in   St.  Paul,  according  to  a  released  statement  from  ISAIAH.       “Every  day  I  see  the  pain  of  families  losing  their  homes,  their  jobs,  their  health  care,  and  their  retirement   savings,  and  I’m  outraged  by  the  indifference  shown  by  our  government  and  corporate  leaders,”  the  Rev.   Paul  Slack,  president  of  ISAIAH  and  pastor  of  New  Creation  Church  in  Minneapolis,  said  in  the  statement.       The  campaign  aims  to  engage  congregations  and  clergy  “under  a  common  prophetic  narrative,  a  five-­‐point   values  statement  that  can  be  agreed  upon  by  most  faith  traditions.”           “Issues  such  as  the  Voter  ID  ballot  initiative  and  racial  disparities  in  education,  health  care  and  jobs  will  be   looked  at  through  a  faith  perspective.       “The  Prophetic  Voices  campaign  will  take  place  in  cities  including  Alexandria,  Duluth,  Minneapolis/St.  Paul   and  their  suburbs,  Northfield,  Rochester,  St.  Cloud,  St.  Joseph,  and  Willmar.       “Congregations  from  12  denominations  will  participate  including  the  Evangelical  Lutheran  Church  of   America  (ELCA),  Church  of  God  in  Christ,  Pentecostal,  Roman  Catholic,  United  Church  of  Christ  (UCC),   Presbyterian,  United  Methodist,  Baptist,  Episcopal,  Unitarian  Universalist,  Mennonite,  and  Jewish   congregations."     26  

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