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The North Wind

The North Wind

The North Wind

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The North Wind is an independent student publication serving the Northern Michigan University community. It is partially funded by the Student Activity Fee. The North Wind digital paper is published daily during the fall and winter semesters except on university holidays and during exam weeks. The North Wind Board of Directors is composed of representatives of the student body, faculty, administration and area media.

Students protest against Israel-Hamas war with campus encampment
Students protest against Israel-Hamas war with campus encampment
Dallas WiertellaApril 30, 2024

Student credit union should replace campus Wells Fargo

Corporate power is everywhere in America. From pervasive corporate advertising in the modern age to the corporate domination of U.S. political institutions through legal bribes called “financial campaign contributions,” it is in all parts of our everyday lives.

Northern Michigan University is not an exception to this rule.

The exclusive contract between NMU and Wells Fargo illustrates how corporate power has taken precedence over the primary purpose of higher education. According to a report by Richard Bawden, professor at the University of Western Sydney, higher education’s primary purpose is “intellectual and moral development.” The NMU-Wells Fargo contract doesn’t fulfill this purpose.

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Wells Fargo, like any other corporation, is designed in order to maximize profit and stock values for their stockowners. This is their purpose under corporate free market assumptions.

Section 17 of the exclusive contract states, “University agrees to cooperate with Bank exclusively in the expansion of financial services available to current and future Wildcat Express Card holders including but not limited to the above marketing efforts and ‘tabling’ on campus.”

Section 23 of the contract then states, “In addition … University will give Bank exclusive access to market financial services to Eligible University Members including the marketing efforts indicated in Section 17.”

Through the use of this exclusive contract, NMU has precluded the opportunity for students at this university to form their own credit union, even though a credit union would be better for students and more in line with actually “educating” students instead of exploiting them.

As Stacia Brooks, CEO of Kent (Ohio) State Student Credit Union says, “Students are new at financing, even at learning to balance a checkbook. If they bounce one check, banks are likely to charge them large fees. At the credit union, we do education on managing checking accounts and on the warning signs of being in trouble with credit cards. The bank we’re competing against doesn’t do that.”

Not only does Wells Fargo not make educating their members a priority, it also engages in many anti-consumer practices.

According to the Huffington Post in August 2010, Wells Fargo was ordered to pay back $203 million to its customers for what the federal judge in the case, William Alsup, called “unfair and deceptive business practices” for changing its business policies from processing debit card transactions in order of the actual transaction date to processing the transactions in order of highest value to lowest value.

This policy drained many customer bank accounts and drove up overdraft fees. Judge Alsup referred to this policy as “gouging and profiteering.”

According to The Wall Street Journal MarketWatch in July 2011, the Federal Reserve slapped Wells Fargo with an $85 million fine for allegedly tricking borrowers into “high-cost subprime mortgage loans,” even though the borrowers qualified for better loans. According to the Federal Reserve, employees of a Wells Fargo subsidiary “falsified information about borrowers’ incomes to make it appear they qualified for loans.”

During these two situations, Wells Fargo admitted to no wrongdoing. If corporations are legally people, and Wells Fargo is indeed a corporation, then Wells Fargo should legally be classified as a narcissist. The financial conglomerate has no respect for its customers or consumers in general.

In the past month, according to the Huffington Post, Wells Fargo was given one of the biggest mortgage servicing misconduct fines in U.S. history. After five years of litigation between Wells Fargo and Michael Jones, Wells Fargo was ordered by federal bankruptcy judge Elizabeth Magner to pay Jones $3.1 million in punitive damages for “highly reprehensible” conduct.

“Wells Fargo has taken advantage of borrowers who rely on it to accurately apply payments and calculate the amounts owed,” Magner wrote in her opinion. “But perhaps more disturbing is Wells Fargo’s refusal to voluntarily correct its errors.

It prefers to rely on the ignorance of borrowers or their inability to fund a challenge to its demands, rather than voluntarily relinquish gains obtained through improper accounting methods.”

Instead of Northern Michigan University creating a student credit union on campus for the betterment of the campus community and its students, NMU has decided to make a few dollars by bowing down to the corporate power of financial conglomerate Wells Fargo.

NMU received an annual $10,000 royalty from Wells Fargo in the first two years of the five-year contract.

Wells Fargo then pays NMU anywhere from $4,500 to $60,000 per year, depending on the number of NMU students who have linked their Wildcat Express Cards to a Wells Fargo checking account.

Instead of making money by giving exclusive rights to Wells Fargo on campus, NMU needs to form a student credit union.

The credit union would have lower loan rates and would educate its members instead of exploiting them like Wells Fargo.

Corporate power has grown too big. We need to counteract corporate power with democratic student power.

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