Emily Rose Thorne
Wells Fargo, the bank that provides optional financial services to Mercer students through a partnership bringing the university nearly $40,000 each year, may charge students higher fees than other banks with similar college programs. The information was released in a report by the Consumer Financial Protection Bureau (CFPB) in late 2018.
U.S. Senator Elizabeth Warren (D-Mass.) sent the details of the report in a letter to 31 college presidents involved in such programs, including Mercer President Bill Underwood, on Jan. 15.
She asked that the presidents refer to the report “as your institution considers future agreements with banks to provide services to your students.”
In the current agreement between Mercer and the bank, students can link their Bear Card with a Wells Fargo checking account and are allowed to waive the $10 monthly service fee that usually applies. Between July 2017 and June 2018, there were 425 students with linked accounts, according to Auxiliary Services.
Warren’s letter stated that the report revealed Wells Fargo charged students an average of $46.99 annually, while the largest provider of student accounts in the U.S., BankMobile, charged just $12.12.
The 425 Mercer students in the program paid an average of $50.44 in fees to Wells Fargo between June 2017 and July 2018, according to Auxiliary Services — exceeding the average amount that students paid Wells Fargo nationally.
Director of Media Relations Kyle Sears confirmed Jan. 21 that Underwood received Warren’s letter. In a later statement on Jan. 29, he said the University would need to evaluate the situation further.
Sears said that “this is going to take some more looking into.” Further information was not available at press time.
Students who link their Bear Cards to Wells Fargo accounts have 45 days to waive the monthly fee that would otherwise apply, according to the checking account disclosure available online through Auxiliary Services. However, the bank warns that it “charges 14 other types of fees” in the disclosure.
Wells Fargo “may provide financial support to Mercer University for services associated with the Mercer Bear Card,” according to the disclosure form.
Auxiliary Services reported that Mercer received a total of $39,608 from Wells Fargo as a result of the partnership between 2017 and 2018, with the bulk ($30,000) in royalties and the remainder in “operational support” and marketing ($2,608 and $7,000 respectively).
Warren Spokesperson Ashley Woolheater said in an email to The Cluster that while it wasn’t unusual for involvement in these programs to result in fees, students at schools that partnered with Wells Fargo paid more than their fair share.
“Fees charged to college students by Wells Fargo for debit cards and other financial products were more than three times higher than the average charged by other financial institutions and the highest of the banks examined,” Woolheater said.
Ken Boyer, associate vice president of Auxiliary Services, said Warren’s letter doesn’t tell the whole the story.
He told The Cluster that because banks’ college programs differ in what they provide, there were limits to how accurate comparisons between them could be.
“We believe there are relevant differences in the range of services provided by reporting financial institutions, as well as variation in data submission methodologies, which can make program comparisons challenging,” he said.
Boyer said no Mercer student has ever been obligated to create an account with Wells Fargo or any bank.
“Our banking relationship began back in 1997 with Wachovia Bank, which was later acquired by Wells Fargo. Twenty plus years ago, students and campuses were looking for options to manage their money and help pay for everyday expenses without the need for carrying cash,” Boyer said. “I again must stress Wells Fargo accounts are optional and are in no way required.”