Well, I finally did it: I closed my accounts at Wells Fargo Bank on Monday morning. It feels great! Of course, a lot of people have been getting out of the too-big-to-fail banks; I knew they were right, and I should do it too. And I thought about it—on and off—for over a year before I was able to make it happen. The biggest thing in my way was inertia, which a friend loves to say is the most powerful force in the universe.
Wells Fargo was a very different bank when I opened my first account there in 1978. I’m originally from the East Coast, and when I moved to California and saw the bank with the name out of the Old West, it seemed so quaint. Over the years and after a few mergers and acquisitions, the bank had morphed into the country's second-largest bank by deposits, mortgage servicing and debit cards; and then the 2008 financial crisis brought the issue of over-empowered financial institutions to the forefront.
When Bernie Sanders announced that any bank that's too big to fail is too big to exist, I knew I shouldn't be supporting one of those very banks, even with my modest accounts… but my local branch is friendly; and I'd gotten pretty locked in, what with direct deposit, linked accounts, auto-payments and such. It was all so convenient; and deconstructing the whole setup seemed so daunting that I found myself utterly unable to take action, even when last November 5 was designated as Bank Transfer Day. It was pretty pathetic—but then Life gave me a nudge that was too big to ignore.
Remember Marvin Borg? He posted a diary here on November 2 with a great story about his one-man campaign to encourage people to move their money. It was pretty inspirational; and when I saw that he lives nearby, I boldly (for me, since I'm a wimp) volunteered to help him out. Two days later, a couple of us from dKos joined him for a second “action" in San Francisco’s Castro District (I was the photographer).
It was fun and gratifying to get involved in the move-your-money movement; but I felt pretty guilt-ridden about it afterward because due to my paralysis, I was in no position to move my own money on Bank Transfer Day, which was the very next day. But then I realized that I could do the next-best thing that day: I could start the process. And now I'm all done! What better occasion to write my first diary (I've only been hanging around here since the Howard Dean days—but as I said, I'm a wimp)?
If you, too, find yourself overwhelmed by the enormous undertaking of digging out of your TBTF bank, don’t give up. If I can do it, anyone can! The key is just to get some momentum going. Follow me over the cloud with a silver lining for a few links and ideas to get you started on the road to your new life at a smaller bank.
There's a lot involved in moving your money, but it's not hard if you organize the process. It took me two months; maybe you can do it more quickly, but the main thing is not to rush so that you can be sure that everything really is wrapped up when you finally close your old accounts.
1. Find a new bank
If you don't know where to move your money, you might try doing a search on the Move Your Money website, which will give you a list of community banks and credit unions in your area. Once you've identified some contenders, you can do a free rating search of any specific bank or credit union at BauerFinancial's site (I found out about them on my new credit union's website) to be sure that your new institution is reasonably well run and stable.
2. Open your new accounts and start using them
Go to your new bank's website and spend some time reviewing the various accounts they offer, and then head over there to open your new accounts. If you've been avoiding checking account fees by direct-depositing your paycheck, you won't be able to set that up right away at your new bank because you'll need to keep your old direct-deposit arrangement in place till you're ready to close your old accounts. But you still might be able to qualify for a fee waiver on your new checking account in the meantime, by maintaining a minimum balance in your checking account or in a linked savings account or with some other arrangement offered by your new bank.
Once you've got your new checks and debit card, start using them! (If you've got paychecks that are being directly deposited to your old bank, of course you'll need to move money over to your new bank occasionally during the transition…)
If moving your money includes closing out a credit card, apply for a new one at your new bank and start using it right away so that the current billing cycle on your old credit card will be your last. (Oh, and if your credit card has a rewards program, be sure to cash out your points before making your last payment!)
3. Redirect your auto-payments
This is the most tedious step, but it's obviously really important to be thorough with this. You might make certain payments or charitable contributions automatically from your checking account or have them charged automatically to your credit card; but if you're like me, you've never bothered to make an organized list of them. At any rate, you're going to need to have a list now—and spend some time with it to make sure it's complete!
In making your list, don't forget linked accounts that you could trigger yourself without warning, like an ActBlue express account, an iTunes account, accounts that automatically charge your bank account for paying tolls or using public transport… Reviewing your bank statements could help to jog your memory as you make your list; but if you do that, go back a number of months so you don't miss a charge that only appears occasionally.
Then, you can start redirecting all of those payments to your new accounts. Fortunately, a lot of these arrangements can be changed online pretty easily; but you may need to make a few phone calls as well. I just tackled a couple of items at a time till everything on my list was checked off.
4. Do a final assessment of your old accounts
The advantage of not rushing with all of this is that once you've activated your new accounts and stopped using your old ones, the passage of time will provide you with confirmation that everything is in order. A couple of my auto-payment changes were kind of complicated, for instance; so it was comforting to go through a cycle to be sure that my instructions had been followed correctly. Once you're sure that everything is as is should be, you can change your direct-deposit instructions (assuming you do that). I did it at the beginning of a pay period so that I'd have time to close my old accounts before Wells Fargo expected to receive my next direct-deposit.
5. Close your old accounts!
Plan your trip to close your accounts on a Monday, for added effect. I like the idea that if a lot of people move their money on Mondays, over time the TBTF banks could develop a certain feeling of dread as they start each week!
My experience was pretty uneventful, but it was still fun to be there, after all the preparation. The banker was impressive in his neutrality, very accommodating and not expressing any opinion about my request. Of course he did ask why I was leaving, and I just said that the bank had become too big to fail, and I didn't want to be part of that. He just nodded and filled out the paperwork, and he even offered some helpful advice when I asked about closing my credit card account: he said that since I have a good credit rating, I'm not doing myself a favor by closing the account because that will cause the credit history associated with the account to vanish. He suggested just leaving the account unused but in place. Nice of him, don't you think?
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I hope that this is helpful to those who need some encouragement to move their money! If anyone has other tips or advice, please add them in the comments.
UPDATE: Wow, thanks to you guys for putting this on the rec list. What a treat!
And thanks to frandor55 for posting this video in the comments. (I'd embed it here, but that's a skill for another day!)
UPDATE #2: Don't miss MouseThatRoared's helpful comment corroborating the advice the Wells Fargo banker gave me on the value of not closing out a credit card with a long and good history.
P.S. On Meteor Blades' advice, I've broken up the longer paragraphs in this diary!