Courtesy of Aaron Krowne of ML-Implode
ML-Implode.com discovered yesterday (2012-06-12) in the course of its normal banking activities that Wells Fargo had frozen its bank account with no warning. Upon inquiring at the local branch (which had no direct knowledge of the incident), it was discovered the account had been flagged “credit risk”, and slated to be immediately closed.
These actions are more than slightly unusual because ML-Implode’s account was a plain checking account and was not an underwritten account. In fact, ML-Implode paid a monthly fee for the account, so Wells Fargo was certainly doing it no favors.
While the site is effectively insolvent (due to the impact of multiple frivolous libel suits, e.g. by the outlawed Grant America scheme) and thus typically had a minimal balance, there had been no problems with overdrafts and all charges and obligations were always dutifully covered.
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Other arrangements are being made; however, the actions are shocking due to their intrinsic lack of due process and harshness — no advance notice was given and no real reason was given for the action (as “credit risk” does not actually apply to the type of account in question).
Were the actions taken in retaliation for a recent series of articles by ML-Implode blogger Martin Andelman? Martin pulled no punches in criticizing Wells Fargo over its foreclosure practices — in particular the tragic and horrific case of Norm Rousseau who was driven to suicide after Wells Fargo lost a mortgage payment and mistakenly foreclosed on the family’s home, despite a lengthy back-and-forth process which gave the bank ample opportunity to correct the mistake.
Andelman is not paid by ML-Implode and blogs wholly independently (as many others have done in the past). ML-Implode does not dictate or control what he writes. As such, if Wells’ actions are truly in retaliation for the articles, they are apparently violating federal law. USC 47 USC § 230 forbids holding an internet “common carrier” (such as an ISP, forum, or any sort of hosting outfit) liable for the content users independently post or transmit.
The prior week, ML-Implode affiliate REST Report Matters (http://www.restreportmatters.com/), inspired and promoted by Andelman to give homeowners at risk of foreclosure access to the same loan analysis tools the banks have, also had its account shuttered by Wells Fargo. It appears the bank first followed Andelman’s references to REST Report Matters, targeted that company, then connected REST Report Matters back to ML-Implode’s business account (via affiliate transactions) and marked that account for “summary execution” as well.
Martin Andelman has no ongoing financial relationship with REST Report Matters, which suggests that Wells’ shuttering of their accounts may amount to tortious interference with a legitimate, independent business.
Of course, since that business constitutes giving homeowners tools to force Wells and other banks to modify loans when compelled to do so by the HAMP and other programs, one can easily imagine that they believe they are killing two birds with one stone by trying to shut down them and ML-Implode (which supports just and equitable treatment of homeowners facing foreclosure).
The bank seems to have “covered” itself for its actions by effectively giving no reason for them, so there is nothing to appeal or argue against. However, our sources inside the bank tell us the critical blog posts were the motivating factor.
There is little precedent for such authoritarian, if not illegal actions by a bank, which effectively amount to domestic economic sanctions.
In one case last October, Goldman Sachs pulled its support from the credit union that was merely honoring the Occupy Wall Street group.
Meanwhile, Wachovia in 2011 (by that point a subsidiary of Wells Fargo) paid a less-than-.1% fine for knowingly allowing nearly $400 billion in drug money to be laundered through it — a fact which is essentially not discussed in the media at all; the outcome constitutes essentially a free pass.
In a May 2010 landmark decision, the New Hampshire Supreme court ruled in the case of The Mortgage Specialists vs. Implode-Explode Heavy Industries, Inc. (ML-Implode’s owner/operator) that the site constituted the “news media” and should be afforded all the journalistic protections provided by the law and our general tradition of free speech jurisprudence.