VALLEY FORGE, PA (ABNS 1/24/14)—American Baptist Home Mission Societies (ABHMS) is among members of the Interfaith Center on Corporate Responsibility (ICCR) to commend Wells Fargo for ending its Direct Deposit Advance program. Wells Fargo recently announced that it will discontinue the product, effective Feb. 1.
The Direct Deposit Advance program targeted cash-strapped customers in need of quick credit solutions; similar to pay-day loans, Wells Fargo’s Direct Deposit Advance carried hefty fees. As advances and fees are repaid automatically, in full, when the customer’s account next receives a direct deposit, these loans carry a great risk of trapping borrowers in cycles of long-term debt.
“The curtailment of Wells Fargo’s Direct Deposit Advance Program—or pay-day lending—exemplifies the impact of ICCR corporate issue advocacy on bank ethical lending practices. It is a significant step in re-orienting our large financial institutions to serve our communities fairly,” says David L. Moore Jr., CFA, ABHMS Director of Investments and a member of ICCR’s Financial Practices and Risk Team.
ICCR members have been in dialogue with Wells Fargo since 2009, urging the bank to provide affordable and sustainable credit products for financially insecure customers. As a result of this engagement, the company adopted anti-predatory lending guidelines for its subprime mortgage business. But Wells Fargo continued to offer the cash advance product and was one of only a few major banks to do so.
The Wells Fargo announcement came on Jan. 17—the same day that US Bank declared that it would be “winding down” its Checking Account Advance program. Regions Bank recently pulled a similar program. Fifth Third Bank is now the only major bank still offering the product.
Currently celebrating its 43rd year, ICCR is the pioneer coalition of active shareholders who view management of their investments as a catalyst for change. Its 300 member organizations with more than $100 billion in assets under management have an enduring record of corporate engagement that has demonstrated influence on policies promoting justice and sustainability in the world.
ABHMS is a founding member of ICCR.
American Baptist Home Mission Societies—the domestic mission arm of American Baptist Churches USA—ministers as the caring heart and serving hands of Jesus Christ across the United States and Puerto Rico through a multitude of initiatives that focus on discipleship, community and justice.
American Baptist Churches is one of the most diverse Christian denominations today, with over 5,200 local congregations comprised of 1.3 million members, across the United States and Puerto Rico, all engaged in God’s mission around the world.