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Sunday, February 05, 2017


Mark E Budnitz

Why consumers don't close their accounts at Wells & go to other banks: The following sources do not specifically focus on Wells Fargo, but the findings likely apply to Wells as well as others. Some banks refuse to close accounts because transactions are pending or the consumer must first pay overdrafts. Letter from national consumer organizations to prudential regulators, Sept. 29, 2014. A Consumers Union study found that closing an account at one bank and opening one at a new bank can be complicated and confusing and can take months. "Trapped at the Bank: Removing Obstacles to Consumer Choice in Banking" (2012). Many consumers have complained to the CFPB about errors in their credit reports that made it difficult to open a new account. Monthly Complaint Report, August 2016. In some rural areas and low income neighborhoods, there few, if any banks. Bass & Anderlik, "The Future of Banking in America: Rurual Depopulation...." FDIC, Jan. 2005. Bass & Campbell, "Predator Targets Hit as Banks Shut Amid Profits," Bloomberg, May 2, 2013 (banks shut 1,826 branches between late 2008 and 2013, 93% in low income postal zones).

Matthew Bruckner

Regarding switching costs. see Haiyan Shui & Lawrence M. Ausubel, Time Inconsistency in the Credit Market, available at (attributing limiting switching to costs estimated at ~$150).

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