Wells Fargo Closes Accounts if Firms Offer Loan Mod Services
Last week, when I learned that U.S. banks were systematically canceling the merchant accounts of firms offering loan modification services, thus preventing the firm from accepting payment by credit card, I was stunned. And I thought to myself… well, now I’ve heard everything.
I was wrong, however, I had not yet heard everything.
Today, I was informed that Wells Fargo Bank is unilaterally closing the business checking accounts of companies simply because they are offering loan modification services. Yes, you read that right. Business checking accounts. Because you offer to help people obtain loan modifications from banks… like Wells Fargo.
What’s next… you won’t be allowed to use the bathroom at B of A?
That is truly unbelievable. Can you imagine if that were happening to any other segment? Like coffee shops… banks don’t like coffee shops… so they can’t take credit cards anymore and we’ll cancel their checking account too. It would be on the news every single night. I’ve been all over the world and I can tell you that I’ve seen some sleazy, clip joint places… hey, I was in the service – so sue me… but they all accepted payment by credit card.
But help someone get their mortgage modified so I don’t lose my home to foreclosure and… Oh dear… I’m sorry, no… we simply could not allow that.
Well, you know what? At least that puts an end to the skeptics that thought to themselves: “I wonder if there’s a good reason the banks are canceling merchant accounts for loan mods. Maybe he’s not telling me something. Hmmm…” Sorry, no. It’s the banks and they’re doing this for a very obvious reason… they don’t want people to have help in their negotiations over a mortgage modification. They want loan mod service providers gone.
For the record, the individual that called me and told me about this situation yesterday was no start up, by the way. He’s been a mortgage broker for twenty years. And he’s had no problems with his account, it came as a total surprise. When he asked his banker, with whom he’s had a relationship why he had received such a letter he was told: “It wasn’t me… it come down from above… no business accounts if the firms offer loan modification services.” So, that’s pretty darn clear, wouldn’t you say?
They don’t like what you do for a living.
Or, is there some newfound risk in a business checking account, I’m not aware of? I’ve only had one since 1989. I’m probably not familiar enough with a business checking account to judge. And think about this: I’ve seen banks hesitate more over closing the account of a drug lord than this.
So, that’s Wells Fargo. And who knows who is next. I’m getting on the phone and calling some regional banks. I know the CEO of a couple of them. I’ll let everyone know what I find out. Until then…
Be careful out there.
Don’t play games with your money. When your merchant account gets terminated, they can hold your funds for six months. At the moment, I’m trying to help a firm in Las Vegas get their funds released. Their merchant account was terminated without cause on April 27th. And they keep getting charged a service fee of $600 every month… even though their account is closed!
I’m not kidding about this… don’t wait until it’s too late.