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Financially troubled Metro seeks to borrow $220 million to cover loan


Metro officials want permission to borrow $220?million to cover a loan coming due in October, as the transit agency continues struggling under restrictions imposed last year after a federal audit found numerous instances of financial mismanagement.

At a time when some Washington-area officials have become increasingly skeptical of the way the Washington Metropolitan Area Transit Authority handles its money, the agency’s chief financial officer plans to ask Metro’s board of directors on Thursday to allow him to seek the short-term loan.

Metro already is juggling several large, short-term loans, borrowed largely to make up for federal grant money that has been slow in arriving. The Federal Transit Administration, which completed the audit in March 2014, has been limiting Metro’s access to grant money until the agency fixes the problems described in the scathing financial report.

Tuesday, D.C. Council Chairman Phil Mendelson (D) called a meeting between Metro board leaders and D.C. Council members in his office to relay concerns about how the transit agency’s financial troubles are being handled. And Wednesday, council member Elissa Silverman (I-At Large) hammered Metro leaders at a public oversight hearing, accusing the board of failing to hold individuals accountable for its financial lapses or to provide a “clear picture” of the agency’s financial state.

“It’s an incredible lack of management for such an important public agency. Yet no one seems to be held accountable for it,” said Silverman, a member of the council’s finance and revenue committee. She also described Metro as an agency “lurching from crisis to crisis.”

A Metro rider is seen through orange construction mesh near an escalator that was being repaired at the L’Enfant Plaza station on Wednesday. (Evelyn Hockstein/For The Washington Post) Metro, which has faced renewed criticism since a deadly smoke incident in a subway tunnel near the L’Enfant Plaza station Jan. 12, is already trying to persuade governments in the District, Maryland and Virginia to commit to providing the cash it needs over the long term to pay for new, safer railcars, as well as other badly needed improvements. If Metro obtains the $220?million loan, it would still need an additional $208?million to cover loans due later this year. It could tap cash reserves, obtain other financing or persuade some of its lenders to extend credit terms. In documents prepared ahead of the Metro board’s meeting Thursday, Metro staff said that despite cash-flow improvements, “pressures remain on the amount and availability of cash in the near term.” Metro’s total short-term debt amounts to $502?million, money that Metro Board Chairman Mortimer Downey said has been used primarily for building projects and improvements. Last month, Wells Fargo renewed an existing $75?million Metro line of credit through March 2016. Metro spokesman Dan Stessel said Wednesday that the transit agency expected to pay off “a significant part” of the remaining debt and was likely to seek credit extensions similar to what it obtained from Wells Fargo on only “a fraction” of the credit. Stessel did not provide specific details of the plan. Metro board leaders have said that they are seeking broad funding solutions within the jurisdictions that subsidize its operations and that it does not plan to increase fares or cut services to cover its costs.A Metro Silver Line train makes it way to Washington, passing another Metro train on a lower rail. (Evelyn Hockstein/For The Washington Post) D.C. Council member Jack Evans (D-Ward 2), who represents the city on the Metro board, said during Wednesday’s hearing that despite his concerns about Metro’s management, the agency needs the cash to expand. “If Metro just stays as it is, it will not fulfill the needs of our region,” said Evans, who led the hearing as chairman of the council’s finance and revenue committee. “We need a larger Metro. We need a Metro that goes more places, that has more cars to carry people.” Silverman, despite her criticism of Metro’s finances, espoused the same sentiments about the transit system’s future growth. But local government officials say they need reassurance that Metro is implementing the FTA’s recommendations to improve the agency’s financial practices before they authorize more funding. Metro’s own audit of its finances for the fiscal year that ended June 30, 2014, is still underway and four months overdue. Acting General Manager Jack Requa told the council hearing Wednesday that the audit was on track for completion in April. “Until there is comfort that the financial management systems and processes are in order, the [chief financial officer] cannot recommend long-term borrowing or additional capital requests beyond safety needs for WMATA,” David Umansky, a spokesman for D.C. Chief Financial Officer Jeffrey S. DeWitt, said later in an e-mail. Umansky said that DeWitt was at Tuesday’s closed meeting between council members and Metro board members, and that “he expressed his continuing concerns about the lack of audited financial statements and the need for WMATA to extend its lines of credit coming due in the upcoming months.” Last March, a federal review painted a troubling picture of the transit agency, questioning Metro’s management of billions of dollars in federal grant money. The review by the Federal Transit Administration found that Metro awarded millions in no-bid contracts, skirted contracting rules and overcharged the government. The problems led FTA to shut down the automatic flow of cash to Metro, instead requiring the agency to manually draw down grant money and comply with grant application procedures. The restrictions are likely to continue through fiscal 2015, according to Metro. Metro Board Chairman Mortimer Downey said Wednesday that even he had been surprised when he read the FTA report. “I take accountability for not knowing it was not done right,” Downey said in response to questions from Silverman. At the behest of members of Congress, the Government Accountability Office has begun its own audit of Metro. Silverman said in an interview after the hearing that Wednesday marked the first time she had heard “a sense of remorse or responsibility” when Downey spoke. But Metro board leaders during the hearing also painted a more positive picture of the agency’s financial recovery.

Requa said the transit agency was “performing to budget with almost $300?million cash on hand, with the ability to make timely payments” to employees and contractors.

Requa described the agency’s success in securing the $75?million credit extension from Wells Fargo. “Financial institutions have confidence in WMATA’s financial capacity,” he said.

Lori Aratani and Robert McCartney contributed to this report.

Abigail Hauslohner covers transportation and development for The Washington Post. Previously, she served as the Post’s Cairo bureau chief.

Paul Duggan covers the Metro system and transportation issues for The Washington Post.


These loan officers took kickbacks



Federal and state authorities have ordered Wells Fargo and JPMorgan Chase to pay a combined $35.7 million for taking part in a mortgage kickback scheme.

The Consumer Financial Protection Bureau and the Maryland Attorney General said Thursday that loan officers at both banks took cash payments from a now-defunct title company in exchange for business referrals.

Regulators said more than 100 loan officers at Wells Fargo (WFC) locations in Maryland and Virginia steered thousands of loans to Genuine Title, which went out of business last year, in exchange for cash.

Related: Bank’s ‘repeated failures’ led to 2,000 foreclosures, feds say

Todd Cohen, a former Wells Fargo banker, allegedly had Genuine Title make “substantial cash payments” to his girlfriend at the time in order to avoid detection. The bureau has ordered Cohen and his now-wife, Elaine Cohen, to pay a $30,000 penalty.

Regulators said Wells Fargo failed to halt the scheme even though it was facing a federal lawsuit over the illegal activity.

“We have fully cooperated with the CFPB in this matter and have taken strong corrective action, including terminating team members,” Wells Fargo said in a statement.

The wrongdoing was less extensive at JPMorgan Chase (JPM). The bureau said at least six loan officers at Chase locations in Maryland, Virginia and New York helped steer 200 loans to Genuine Title. The bank has agreed to pay a total of $900,000 in penalties and compensation.

Related: U.S. Bank refunding $48 million to customers

“We are fully committed to ensuring that our mortgage bankers comply with all legal and regulatory requirements,” Chase said in a statement. “These former employees clearly violated our policies, procedures and training.”

The CFPB said a third bank also took kickbacks from Genuine Title. But the bureau said it did not bring an enforcement action against that bank because it “self-identified” and took steps to correct the illegal action.

“These banks allowed their loan officers to focus on their own illegal financial gain rather than on treating consumers fairly,” said CFPB Director Richard Cordray.

First Published: January 22, 2015: 4:37 PM ET


Wells Fargo, JPMorgan settle mortgage kickbacks probe

WASHINGTON (AP) — Wells Fargo and JPMorgan Chase have agreed to pay more than $35 million combined to resolve claims that loan officers at the two banks received kickbacks in exchange for steering mortgage borrowers to a Maryland title company.

The Consumer Financial Protection Bureau said Thursday that JPMorgan and Wells Fargo each agreed to consent orders filed in federal court to settle the claims.

Wells Fargo has agreed to pay $24 million in civil penalties and $10.8 million to consumers affected by the scheme. JPMorgan is to pay $600,000 in penalties and about $300,000 in redress.

The CFPB and the Maryland attorney general found that loan officers at the banks referred borrowers to a now-defunct title company, Genuine Title, in exchange for cash and marketing services.

Federal law prohibits giving anything of value in exchange for a referral of business related to a real estate settlement service.

According to the CFPB, loan officers at Wells Fargo and JPMorgan sent homebuyers financing a mortgage through the banks to Genuine Title, which provided real estate closing services.

In return, the title company, which went out of business last April, provided the loan officers with cash, as well as consumer information and marketing services aimed at helping them drum up more loan business, the CFPB said.

“These banks allowed their loan officers to focus on their own illegal financial gain rather than on treating consumers fairly,” said CFPB Director Richard Cordray.

The CFPB noted that more than 100 Wells Fargo loan officers in at least 18 branches, mainly in Maryland and Virginia, participated in the scheme, referring thousands of loans to Genuine Title.

The agency also contends that Wells Fargo failed to stop the scheme, even though it had multiple warnings of what was going on, including a federal lawsuit that alleged the bank’s loan officers had illegal arrangements with the title company.

In a statement, Wells Fargo spokesman Tom Goyda said the bank has fully cooperated with the CFPB, fired the employees who were involved in the scheme and taken steps to enhance its procedures to provide greater oversight and monitoring of both the process and its employees.

The agency found that at least six Chase loan officers in three different branches in Maryland, Virginia and New York were involved in the scheme.

Jason Lobo, a spokesman for Chase Mortgage Banking, said the bank’s own investigation into the kickback scheme found six of its mortgage loan officers received marketing services, though not any cash, in return for steering borrowers on 191 loans to Genuine Title.

“We also found no evidence that borrowers incurred title fees in excess of the market rates,” he said.

Four of the Chase loan officers had left the bank when the scheme was uncovered. The bank fired the two others who remained, Lobo noted.

FinanceLoansJPMorgan Chase […]

Jumbo-loan challenges for retirees

A lifetime of saving and investing can make retirees feel secure, but showing that assets translate into income remains key when qualifying for a jumbo mortgage.

Debt-free retirement has its allure, but with interest rates so low for jumbo mortgages, some retirees are calculating bigger returns if they leave cash invested and borrow to buy their retirement home, says Brad Blackwell, executive vice president of Wells Fargo Home Mortgage. Jumbo mortgages have higher loan limits than government-backed loans, which top at $417,000 in most places but go up to $625,500 in some high-price areas. Average interest rates were 4.11% for the 30-year, fixed-rate jumbo and 3% for a five-year, adjustable-rate jumbo on the week ending Nov. 14, according to

A retiree, like any other borrower, generally must meet a 43% debt-to-income ratio (DTI), mandated by federal mortgage rules. This number reflects the borrower’s percentage of monthly debt payments relative to monthly income.

Retirees who plan ahead can qualify, and lenders have methods to translate investments into eligible income even if a borrower can’t produce a W-2, Mr. Blackwell says.

Today’s typical retiree will receive income from Social Security; distributions from IRAs, 401(k)s, annuities and other retirement accounts; and possibly a pension. Business owners may no longer get a salary but still receive profit shares and/or have significant wealth tied up in an enterprise, and many high-end retirees may draw revenue from commercial real-estate ownership, residential rental properties or other sources, says Tom Wind, executive vice president of home lending at EverBank.

High-net-worth individuals often will argue that they clearly have enough money in assets to pay off a loan at any time, says Bill Banfield, vice president at Quicken Loans. “They may be thinking that they have a big IRA and they could use that to take a distribution to make the loan payments,” he adds. “That’s all good and fine, but we’d like to see that all set up before they apply for the loan.”

The key to qualifying is to demonstrate that a retiree’s assets translate into income via tax returns, bank statements and other documents, he adds. “The lender is going to want to make sure you have receipts for distributions and a schedule for receiving them,” he adds.

Retirees also need to show proof that the payments will continue in the same amounts for at least three years into the future, Mr. Banfield says. If a borrower is an early retiree under 59½ years old, the threshold for taking withdrawals from IRAs without tax penalties, the lender will adjust income estimates accordingly, he adds.

For retirees who don’t want to increase their distributions, another possible option is a nonqualified jumbo mortgage, which offers flexibility on the federal DTI rule, Mr. Wind says. Lenders have to waive liability protection to issue nonqualified mortgages, but some lenders will take that risk with retirees who have substantial invested assets they don’t want to liquidate, he adds.

To calculate an income estimate in such cases, EverBank will assign a conservative earnings rate to the total dollar amount of the assets and amortize the amount to the loan’s term length, Mr. Wind says. Wells Fargo uses a similar method to calculate DTI for nonqualified mortgages for borrowers with multimillions of dollars in assets, Mr. Blackwell says.

The first step for any retiree or person approaching retirement is a financial adviser, Mr. Blackwell says. An adviser can look at a retiree’s overall financial picture and advise whether to pay cash or borrow when buying as home. The adviser can also calculate retirement-account distributions that will help the borrower qualify for a loan, he adds.

Here are some more considerations that retirees may want to weigh when deciding whether to apply for a jumbo mortgage:

• Credit scores. Retirees with a sufficient income stream but lower credit scores still may not qualify for a mortgage or will receive a higher interest rate from a lender.

• Trusts. Retirees who want to buy a home and hold it in a revocable trust as part of their estate plan still have to demonstrate their ability to repay the loan, Mr. Blackwell says. Still, assets in the trust are considered in the ability-to-repay debt calculation, he adds.

• Capital-gains taxes. When deciding whether to cash out investments to buy real estate, remember to calculate not just lost returns but also the potential capital-gains-tax hit, Mr. Banfield says.

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Wells Fargo is lending its mountain of cash



Mortgage lending is back.

In its second quarter earnings report Friday, Wells Fargo (WFC)showed a solid jump in loan and deposit growth, a sign that it continues to function more like a main street local bank than an investment banking powerhouse.

The firm’s loan ramp up is good news because it signals that the bank has confidence in the economy and that the housing market might be more robust than previously thought.

As the largest mortgage lender in the country, economists often look to Wells Fargo’s data as a bellwether for the real estate market.

Related: Should you raid your retirement savings to slash debt?

The bank has benefited heavily from increased activity in mortgage banking since the financial crisis. The Federal Reserve has kept mortgage rates at historic lows, spurring many Americans to refinance or buy new homes. Some analysts had feared that mortgage activity was slowing, but with rates still low, Wells Fargo is still churning out mortgages at a fast clip.

Commercial mortgages, often viewed as a gauge on business spending and investment, also got a bounce.

Wells Fargo reported second quarter revenue of $21.1 billion, which was down from a year earlier but better than analyst predictions. It booked a profit of $5.7 billion $1.01 per share, exactly in line with Wall Street expectations. Profit was up from the same quarter last year.

Andrew Martquardt, a bank analyst at Evercore Partners, pointed out that while Wells’ earnings were an improvement from the second quarter of 2013, it was the first time in recent memory that the company declined from the prior quarter. Still, he said the uptick in loan activity was promising.

The firm’s wealth brokerage division, which advises individuals on their investments, also experienced a nice boost last quarter. Investors typically like that kind of business because it’s considered more stable than cyclical areas such as investment banking.

“That’s been a quiet area of strength for wells now for a while,” said Martquardt,.

Related: IPO market achieves liftoff

Of all the major banks, Wells Fargo has been the most beloved by investors as of late. Its stock is up 14% this year, while rivals Bank of America (BAC), JPMorgan (JPM), Citigroup (C), and Goldman Sachs (GS) are all in the red. Morgan Stanley (MS) is the only other large bank in positive territory, but it’s only up about a percentage point.

Part of that has to do with the way Wells does business. Unlike its competitors, the firm doesn’t generate a large amount of revenue from trading, which is expected to take a hard hit in second quarter earnings due to low volumes and stricter regulation.

Famed investor Warren Buffett is a big fan of Wells Fargo’s approach to banking and has been a large stakeholder in the company.

The stock was down slightly in trading Friday.

First Published: July 11, 2014: 9:19 AM ET


ARC Document Solutions Announces Closing of Tender Offer and Replacement of 10.5% Senior Notes With New 6.25% Term B …

WALNUT CREEK, CA–(Marketwired – Dec 20, 2013) – ARC Document Solutions, Inc. (NYSE: ARC) announced today that it has closed its previously disclosed cash tender offer and consent solicitation relating to its outstanding 10.5% Senior Notes due 2016 (the “Notes”), and that it has provided notice for the redemption of all remaining outstanding Notes. The company also announced that it has entered into a new Term Loan Credit Agreement that consists of a term loan facility in the amount of $200 million, the proceeds of which will be used to fund the closing of the tender offer and the subsequent redemption of the Notes. The new term loan facility bears an initial annual interest rate of 6.25% (LIBOR plus 525 basis points with a 1.0% LIBOR floor). The company expects to save more than $7 million in annual cash interest payments relative to the Notes, which equates to approximately nine cents earnings per share.

Pursuant to the terms of the previously disclosed cash tender offer and consent solicitation relating to the Notes, the company has accepted for payment approximately $127.5 million in aggregate principal amount of the Notes that were validly tendered on or prior to the consent payment deadline of 5:00 pm New York Time on December 16, 2013. Holders who tendered such Notes will receive $1,060 per $1,000 in principal amount of the Notes validly tendered, plus accrued and unpaid interest.

The consents received in the consent solicitation exceeded the number needed to approve the proposed amendments to the indenture under which the Notes were issued. The terms of the tender offer and consent solicitation for the Notes are detailed in the company’s Offer to Purchase and Consent Solicitation Statement dated December 3, 2013. Based on the consents received, the company and the trustee under the indenture governing the Notes have entered into a supplemental indenture that eliminates substantially all affirmative and restrictive covenants and certain events of default under the indenture governing the Notes, and provides for a shorter three business day notice period required in connection with an optional redemption.

In addition, the company intends today to discharge its remaining obligations under the indenture governing the Notes by causing a notice of redemption to be delivered to holders of the remaining outstanding Notes and depositing funds sufficient to pay and discharge all remaining indebtedness on the remaining outstanding Notes, including accrued and unpaid interest.

As noted above, the company also announced today that it has entered into a new Term Loan Credit Agreement. The Term Loan Credit Agreement consists of a term loan facility in the initial aggregate principal amount of $200 million, the entirety of which was disbursed today in order to pay a portion of the price associated with the purchase of the Notes that were accepted under the tender offer and the subsequent redemption of the remaining outstanding Notes, and to pay associated fees and expenses in connection with the tender offer and redemption.

J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are acting as Dealer Managers for the Tender Offer. Questions concerning the Tender Offer may be directed to either J.P. Morgan Securities LLC at (212) 270-3153 or Wells Fargo Securities, LLC at (866) 309-6316. Wells Fargo Bank, National Association has been appointed to act as the Depositary for the Tender Offer.

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, any security. No offer, solicitation, or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful.

About ARC Document Solutions (NYSE: ARC)
ARC Document Solutions is a leading document solutions company serving businesses of all types, with an emphasis on the non-residential segment of the architecture, engineering and construction industries. The company helps customers all over the world reduce costs and increase efficiency in the use of their documents, improve document access and control, and offers a wide variety of ways to print, produce, and store documents. ARC provides its solutions onsite in more than 7,000 of its customers’ offices, offsite in service centers around the world, and digitally in the form of proprietary software and web applications. For more information please visit

Forward-Looking Statements
This press release contains forward-looking statements that are based on current opinions, estimates and assumptions of management regarding future events and the future financial performance of the company. Words such as “expected,” “consider,” “intended,” and similar expressions identify forward-looking statements and all statements other than statements of historical fact, including, but not limited to, any projections regarding earnings, revenues and financial performance of the company, could be deemed forward-looking statements. We caution you that such statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. In addition to matters affecting the construction, managed print services, document management or reprographics industries, or the economy generally, factors that could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the caption entitled “Risk Factors” in ARC Document Solution’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Mergers, Acquisitions & TakeoversInvestment & Company Informationtender offer Contact:

Contact Information:
David Stickney
VP of Investor Relations & Corporate Communications


Better policing needed for payday lending | Star Tribune

Debt and debtors have been a concern of the faith community since the days of Moses. That manifested itself anew this week at the State Capitol, as the Joint Religious Legislative Coalition (JRLC) and Holy Trinity Lutheran Church of Minneapolis called on lawmakers to crack down on payday lending.

Payday loans are short-term, small-amount, high-interest loans that some banks have offered since the Great Depression but that began to proliferate in storefront operations about 20 years ago and online more recently. Many, though not all, such loans require payment in full when the borrower’s next paycheck arrives, often via the borrower providing the lender with a postdated check. They are targeted at low-income consumers who have little or no access to conventional sources of credit. Twelve million Americans used payday loans in 2012, according to the Pew Charitable Trust, including 39,000 in Minnesota.

The reason such loans have come under fire from religious groups is revealed by some additional numbers: Those 39,000 Minnesotans took out 371,000 separate loans last year, for an average of nearly 10 per borrower. Those repeat borrowers carried loan balances at an annualized interest rate that routinely exceeds 400 percent, according to a new JRLC report. Clearly, this high-cost borrowing has become routine for some people who can ill-afford its high costs.

“People get trapped,” charged Brian Rusche of JRLC. He painted a grim picture of borrowers so financially desperate and/or poorly informed that they take on debt burdens that exceed their ability to promptly repay. They frequently refinance their original loans, each time racking up additional fees that, industrywide, average $17 for every $100 extended. Repeat borrowers can wind up spending substantially more on interest than on the original principal, Rusche said.

That’s not a fair or complete picture, Minnesota industry sources counter. Payday lending services satisfy a genuine need for emergency financial assistance within a population that has few other alternatives in the financial marketplace. Further, they said, reputable lenders strive to help borrowers make informed decisions.

But they acknowledge that their industry includes some bad actors who are escaping regulation and overcharging borrowers. They said they would welcome a leveling of the regulatory playing field. That plea should be heeded by state and federal officials.

Payday lending has doubled in size in Minnesota in the last five years. That explosive growth alone warrants scrutiny from the Legislature. Payday lending is already on the regulatory radar of the new federal Consumer Financial Protection Bureau; the Office of the Comptroller of the Currency, which regulates U.S.-chartered banks, and the state Commerce Department. Commerce Commissioner Michael Rothman says that on his watch, his department has stepped up its efforts to police payday lenders.

Government’s goal should not be to eliminate payday lending. Not even the JRLC critics would go that far. Rather, JRLC urges that limits on fees and other regulations that now apply to banks be extended to storefront and online payday lenders as well. The difference can be seen in Wells Fargo’s Direct Deposit Advance program. It charges a fee of $7.50 per $100 extended, $10 below the industry average, a spokesperson said.

Minnesota should also consider following the lead of Colorado, whose 2010 payday lending statute won praise from the Pew Charitable Trust last month. The law requires lenders to offer payday borrowers a six-month installment repayment plan in addition to the standard lump-sum repayment.

Pew recommended capping the size of installments at 5 percent of gross periodic income. JRLC also endorsed converting recurring payday loans to installment loans, something the Wells Fargo program does after a customer uses the service for three consecutive statement cycles.

While those regulations are worth pursuing, a key defense against predatory payday lenders is a financially literate public. That’s why we applaud the involvement of churches like Holy Trinity and other community organizations in efforts to spread the word about the true cost of short-term borrowing, and to help borrowers pursue less costly options. The state Commerce Department’s recent emphasis on educating young people about financial matters is also welcome.

Such efforts have become more important as the ranks of the near-poor have grown in recent years to include people unaccustomed to coping with scarce resources. Before there were storefronts and websites luring those people with lending come-ons, there were employers, faith communities, charities, unions and other neighborhood sources to which households in financial trouble could turn. In an economy that has not been kind to low-wage workers, those local resources are still needed, perhaps more than ever.


Are You Getting the Most Bank for Your Buck?


Banking Smart

If you’re like most people, you’ve probably picked a bank because of its convenient locations, or maybe you got a “special offer” of cash back if you opened an account there. Both compelling reasons, to be sure. But there are plenty of other considerations too; and with more than 10,000 FDIC-insured financial institutions now vying for your money, you can afford to be picky. So it’s worth checking in with yourself regularly to make sure you’re getting all you need from your current bank. (There’s a reason why one in 10 consumers changed banks last year.)

Of course, everyone wants the best service for the lowest fees. But maybe a (relatively) high-interest savings account, or a low-interest loan or credit card is also a top priority. You might be a one-stop-shopping type who wants someplace that offers everything from accounts to credit cards to mortgage loans. Or maybe you’re a high-balance account holder who wants a bank that will reward you for that with red-carpet service. Or you prefer to do your banking online and seek a bank with the best web and mobile services.

No matter what you want, there’s bound to be a bank or credit union that can provide it. But it can take a little research to help you find the right choice. To get you started, we’ve highlighted seven common criteria and how to find the best financial institutions for each.

So, you’re a people person.

If you prefer to do your banking in person and enjoy feeling like a member of the family when you visit your local branch, you might want to go with a regional bank or local credit union, which is a nonprofit organization designed to serve its members. Credit unions typically score higher on customer service than banks and are more likely to have a real person answer the phone when you call with a question. However, big banks typically have more to offer in terms of products and services, ATM access and locations. If you travel frequently, you are probably better off choosing a national bank with branches throughout the country, but if you are someone who tends to stay close to home, you might opt for a more local option that can offer a friendlier and more personalized approach.

Test out a bank’s style by visiting a branch in person and also calling their customer service number. Observe how the representatives greet and interact with you. Did they make you feel special or like you were just a number? The site also provides more information on credit unions and how to find one in your area.

Technology, not tellers please.

Tellers, shmellers. You do most or all of your banking on your laptop, tablet or smartphone, so you prefer a bank with the latest web and mobile technology. Some of the institutions offering the best mobile apps right now include American Express, BBVA Compass, Bank of America, Capital One, City Bank Texas, Mercantile Bank of Michigan, USAA and U.S. Bank, according to a recent report by American Banker, the leading information resource serving the banking community. Among the best features that these apps offer are the ability to easily transfer money between accounts, temporarily turn off cards that are lost or stolen, deposit checks remotely, bump money between phones, and partnerships with PayPal, Mint and other money management entities. The report also highlights a new alternative to traditional banking called Simple that boasts super low fees, convenience–including free access to 50,000 ATMs and photo check deposits–and an innovative budgeting tool (FYI, you need to have an Apple or Android phone and request an invitation to join that can take a few weeks to receive).

You prefer one-stop-shopping for your financial needs.

If you want the Target or Macy’s of banks, then you’ll likely want to lean towards a national bank. Big national banks tend to offer the most comprehensive products and services, including business banking, investments, financial planning, loans, credit and, in some cases annuities and insurance, so that you needn’t go anywhere else for your financial needs. This can be very helpful, especially for young families who might be planning to buy a home, save for their children’s education and retirement, and possibly finance a small business. In addition, the convenience of online banking that big banks offer is a big plus for those with hectic schedules. While the fees, minimums and rates might be higher than those at smaller banks, the one-stop-shopping capability of big banks might be worth it to you. Some of the top U.S. retail banks include Chase, Bank of America, Wells Fargo, PNC, TD Bank, U.S. Bank and Citibank.

To find out how much bank you can get for your buck, make an appointment to meet with a personal banker to learn about their bank’s offerings and incentives for bundled services. However, keep in mind that cheaper and better products might be available at other institutions if you are willing to shop around.

You want the red-carpet treatment.

Most banks will treat you like a queen, provided you have enough money to make it worth their while. Big banks, in particular, work hard to woo wealthy clients with a plethora of “private banking” incentives, just like casinos offer big gamblers the high-roller treatment of comped rooms and other perks. Both want to lure those kind of customers to stay and give them as much money as possible. Some banks, like Wells Fargo and Bank of America, focus on the “mass-affluent market” with investable assets of $250,000 to $1.5 million, while other banks, like Chase and Bank of New York Mellon, target those with $3 million to $10 million.

If you manage to qualify for private banking, you can count on concierge-style service for banking chores like opening and managing different checking and savings accounts as well as for comprehensive financial services including retirement and estate planning, wealth management, and business succession planning (if applicable). You can also expect higher rates on interest-bearing accounts and CDs and expedited service on loan and credit applications. Plus, there is typically more flexibility when it comes to negotiating bank fees, interest rates and closing costs for mortgages, lines of credit and other loans. Even if you don’t have $250,000 yet to invest, if you have at least $10,000 to put into a checking or savings account or can maintain a minimum monthly balance, you can usually qualify for better rates and waived fees. Bankrate’s checking section will let you compare current bank account deals.

You want a budget-minded bank.

If you’re struggling with debt or have a fluctuating bank balance, you probably want to find a bank with low fees and account minimums. Many banks tease consumers with ads for “free checking,” only to surprise them with the fact that they need to meet certain requirements to avoid fees. According to WalletHub’s 2013 Checking Account Transparency Report, the average checking account has around 30 different fees associated with it! For example, banks commonly require a minimum balance of $1,500 to qualify for free checking and customers who fall below this balance are charged a service fee. Overdraft fees are another major source of recurring income for banks in addition to other fees related to deposits, withdrawals, check-writing, direct deposit, online banking and paper statements.

You would think that bigger banks with more resources and larger scale would tend to charge lower fees than smaller banks, but in fact the opposite is true. Local credit unions typically offer better deals for the average consumer than other banks. Internet banks, which benefit from lower overhead expenses, also tend to be more budget-friendly than their brick-and-mortar counterparts. When shopping around, make sure you’re clear on all of the potential fees and restrictions, some of which may be well hidden on a bank’s website. Check out Top 10 Reviews’s online-only bank reviews, which ranks the top banks by several criteria.

You want a low-interest loan.

When you’re in the market for a loan–whether it’s to buy a home, a car or finance a business–shopping around is important. Some banks try to lure borrowers with various incentives while others want to avoid unnecessary risk by making it harder than ever to get approved (especially since 2008).

In general, smaller local banks and credit unions offer better rates and less stringent application requirements for loans. They also offer the added benefit of more personal service, reducing the chances of application information getting lost or miscommunicated, which is most common with Internet banks (though their rates are competitive too). The catch is that sometimes not all types of loans are available. Bigger banks are more likely to offer a wider variety of financing services and can offer a lot of savings if you have stellar credit (like 740+) and other assets invested with them.

When it comes to small business lending, the total number of bank loans fell more than 10 percent from June 2007 to June 2011, according to FDIC data. However, while big banks have sharply cut their small business lending, community banks have really stepped up. Since 2007, small-business loan volume at small banks grew by $17 billion as of June 2011. According to the Small Business Administration (SBA), some of the top most active small business lenders as of mid-2013 include Wells Fargo, Live Oak Banking Company, U.S. Bank, JPMorgan Chase, and Huntington National Bank. allows you to search for and compare rates for most loans. Before signing anything, make sure you also research your potential lender’s credit rating through Bankrate’s “Safe & Sound” system.

You want your bank to do good.

What happens to your money once you put it in the bank? That’s a good question. The answer is usually murky and unsatisfying, involving complex investing strategies for big profits that help pad the wallets of bank execs. If that idea makes you uncomfortable, you might be interested in putting your money to work helping needy communities instead. These more karma-minded organizations are called Community Development Financial Institutions (CDFIs). The first CDFIs emerged as private organizations aiding federal efforts to alleviate poverty and racial discrimination in the 1960s and 70s, such as South Shore Bank in Chicago and the Santa Cruz Community Credit Union. Today, there are over 1,000 CDFIs in the U.S., thanks to funding from the government agency CDFI Fund and private investors.

There are six types of CDFIs, but for personal banking, look for Community Development Banks and Credit Unions. Besides the usual banking services, these CDFI options also offer a way for you to focus your money in a specific loan fund that provides you with a return on your investment and allows you to directly support communities across America that otherwise would not have access to traditional sources of financing. To find a CDFI bank or credit union in your area, you can try searching the CDFI Fund’s database. You can also find community banks that may not have necessarily applied for CDFI status from the federal government by searching here.

You want the best return. Period.

Granted, with interest rates still relatively low these days, it is nearly impossible to find a bank savings account return over 1.00 percent. However, if your primary banking goal is to earn as much interest as possible on your savings, then you probably want to go with an Internet bank that can trade a better return for low overhead expenses. Charles Schwab Bank, FBNO Direct and Capital One 360 offer interest-earning checking accounts with no minimum balance requirement and no monthly fee. In terms of savings accounts, SmartyPig, GE Capital Bank, Ally Bank and EverBank are currently offering the best deals. SmartyPig is an FDIC-insured Internet bank where you can set up and track savings goals and–get this–be rewarded for reaching them! SmartyPig account holders who meet their targets can (but don’t have to) use those funds to purchase gift cards that provide a cash-back reward of up to 14 percent. The reward can be deposited into a new savings account or added back onto the card. Now that’s a competitive return! Ally Bank by far leads the pack in terms of CD rates, but if you prefer the idea of banking in person, a community bank or credit union will likely offer better rates and lower fees than national banks. The exception is for higher net worth customers who have enough investable assets to entice the big banks to offer rate and fee deals to lure them as investors. Check to search for the best checking and savings accounts, and CD deals.

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Direct Deposit Loans Gaining Acceptance as a Short-Term Emergency Cash Solution

JACKSONVILLE, Fla., Aug. 12, 2013 /PRNewswire-iReach/ — Years ago, direct deposit loan matching websites, such as started a short-term lending trend that has now become commonplace even among larger national and regional banks. Wells Fargo, U.S.Bank and Regions Financial are now offering short-term cash advances or direct deposit loans to their account holders. This appears to be an indication that what was once thought of as a controversial form of short-term financing is now gaining popularity among consumers and acceptance among traditional banks.

The popularity of this financial vehicle, similar to so-called payday loans, seems to be connected to an increased number of account holders direct depositing their paychecks. A study in 2010 by NACHA — The Electronic Payments Association revealed that only 27 percent of employees were receiving paper paychecks. The other 73 percent were having their paychecks direct deposited.

A direct deposit loan basically works like this. A bank or lender offers a cash advance against your direct deposited paycheck. Typically the entire amount advanced is automatically withdrawn when your following paycheck is deposited or a partial amount is withdrawn through a series of smaller installments over the course of your next few direct deposits until the cash advance is paid back in full along with any additional fees or interest.

In a article, all the bank spokespersons echoed the benefits of direct deposit loans. Richele Messick Wells Fargo spokesperson explained how this product was necessary to help customers through an emergency situation. Teri Charest, spokesperson for U.S. banks said the product was created for “unexpected, short-term borrowing needs.” And Evelyn Mitchell of Regions noted that the product is intended to help Regions customers every once in awhile with urgent credit needs.

A spokesperson described the direct deposit loan as a “temporary solution but one that is necessary at times.” He pointed to the home page of the company’s website where their process is explained clearly. “We call them the ABCs of a cash advance: A or Approval has to do with our commitment to get borrowers approved quickly for a loan that fits their situation, B or buying time describes how borrowers should view these loans as bubble gum on a leaky pipe not a permanent solution.” But he noted that used wisely the loans can minimize or save borrowers from further financial damage. “Our belief is borrowers do not have to be hindered by a bad credit score. In fact, they can actually improve their score by paying the loan back according to the terms and using an installment payment.” He concluded, “Is a cash advance a perfect solution? No. Is it a good solution for someone in a bad situation that needs quick cash to prevent further financial damage? Yes. And that’s what bothers me most about the critics. They point out the negatives, but never the positives.”

I guess in the end, what will silence the critics and drive the demand for and success of these products is customer satisfaction and positive feedback.

Visit for more information.

Media Contact: Mark Miller, Cash Advance USA Ltd, (512) 571-3828,

News distributed by PR Newswire iReach:


Big banks provide cash for payday loans

Fast cash is a few clicks away for Minnesotans at the popular CashNetUSA website, where a two-week loan for $100 carries an annual percentage rate of about 390 percent.

To many critics, the terms are outrageous and usurious. But they are typical in the world of high-cost short-term consumer loans, or payday lending, and legal in Minnesota.

In fact, the business is supported by some of the nation’s largest commercial banks. A syndicate including Wells Fargo & Co. and Minneapolis-based U.S. Bancorp provides CashNetUSA’s parent $330 million in financing, government documents show.

Commercial banks, including Wells Fargo in San Francisco and U.S. Bank, are a significant source of capital for the country’s $48 billion payday loan industry, extending more than $1 billion to companies such as CashNetUSA parent Cash America, Dollar Financial and First Cash Financial, according to research by Adam Rust, research director of Reinvestment Partners, a nonprofit consumer advocacy group in North Carolina.

The financing relationship is largely invisible to the public, although bank regulators are well aware of it, as are consumer advocates who view payday lenders as predatory and have criticized banks for helping fuel a controversial industry. Federal regulators moved in recent weeks to tighten their oversight of the payday loan industry, but the underlying financing of the industry has gotten less scrutiny.

“What I hear less about is how it actually works, what makes it possible for payday lending to exist,” said Rust, who writes the blog Bank Talk. “It could not exist on the scale that it exists right now if not for Wall Street investments. I just think it’s the other end of the story.”

The banks argue they’re just doing business.

In a prepared response, Wells Fargo said that the lending is a small percentage of the bank’s commercial loan portfolio, and that it exercises “strict due diligence” to ensure its customers “do business in a responsible way and meet the highest standards.”

“We put our payday lending customers through this process regularly, as often as every three months and at least annually,” Wells Fargo spokeswoman Peggy Gunn said. “In fact, we put our payday lender and check cashing clients through an additional level of scrutiny — a separate, distinct compliance and credit process that includes on-site visits in most cases and a review of their business practices.”

U.S. Bank said the money service companies it deals with have to meet the bank’s strict underwriting standards. It’s diligent in reviewing them to make sure they comply with regulations, a bank spokesman said.

Fort Worth, Texas-based Cash America International Inc. declined to comment.

Via term loans and lines of credits, commercial banks provide low-cost capital to payday lenders, typically charging about 4 percent to 5 percent, said Robert Ramsey, senior analyst at FBR Capital Markets & Co. who covers publicly traded payday companies.

Payday lenders in turn can use the money to lend to consumers at triple-digit rates. They also use it for such things as acquisitions and financing periods of rapid growth.

“It’s the primary source of debt and financing that the companies use,” Ramsey said.

The “credit facilities,” as they are called, are buried in Securities and Exchange Commission documents of publicly traded payday lenders and the terms are subject to frequent changes.

If publicly held pawnshops, rent-to-own retailers, buy here-pay here lenders, tax preparers offering refund anticipation loans and debt collectors are added in, the banks have extended more than $4.5 billion in lines of credit and term loans to fringe consumer finance companies, according to Rust, who is working on a report about the financing.

Wells Fargo is the leading provider, according to Rust’s research.