TD Bank, and How They Fucked Me.
I bank at Commerce bank, which was recently eaten by TD Banknorth. The new owners are some of the biggest assholes around, and I will explain why.
Earlier this year, Christina and I discovered our oil tank was about to die, and after surveying our options decided to convert to natural gas. This is a $5,000 expense, and in order to make the purchase affordable, we decided to apply for a PHIL Loan, which is administered by the city. Essentially, this loan is available to everyone, but with special provisions and programs for low and moderate income families, many of who do not have the best credit in the world. We decided to apply for the Mini-PHIL, which has explicit provisions for existing debt:
Philadelphia homeowners with less-than-perfect credit may be eligible for the Mini-PHIL Loan. Your property must be an owner-occupied residence located in Philadelphia. Buildings may contain between one and four residential units (single-family, duplex, triplex, quadraplex). Condominiums are not eligible.
Residents with less-than-perfect credit may qualify for one of the three loan products introduced on this site.
Participating banks offer flexible home improvement loans that are underwritten and priced to allow low- and moderate- income homeowners to improve their homes, make energy-related improvements and even consolidate some high cost debt – without having to resort to expensive predatory lenders.
My income is moderate (almost low), my credit isn’t perfect due to an outstanding balance with the rapacious scumbags at capital One, and I had a necessary home improvement, so I filled out the paperwork in mid-September. I also spoke to Philly’s Redevelopment Authority, which administers this program, and they confirmed that the loan is also for emergency situations, like mine when a four-year-old child is moving in and there’s no heat.
In early October, the loan was denied because I had forgotten about some back taxes I owed to the state of New York due to a Folgers commercial I’d acted in in 2002.
As we all know, the economy is cratering and taking down out retirement accounts with it, so I decided to cash in an old 401K that was leftover from my time at Penn, and steadily losing value. I paid off the taxes due to New York and set aside the rest for Capital One. I’d been speaking personally with the underwriter, Hamp Colzie, throughout the process, and he assured me that when this was taken care of, I could re-apply. When I applied a second time in early October, I included the following letter:
October 30, 2008
Dear Mr. Colzie:
Earlier this year, I applied for a mini-PHIL loan and was unfortunately rejected due to credit issues, notably a debt owed to the New York State Department of Revenue in the amount of [redacted], and an amount owed to the Capital One credit card company. In order to pay these two entities, I cashed in an old 401K
Attached you’ll find a second application for a mini-PHIL: as you’ll see via the confirmation sheet, I paid the New York State Department of Revenue the full amount on October 30, 2008: however, the payment will take up to ten days to post, and the state can’t issue an official letter confirming my zero balance for 60-90 days. I hope the confirmation page will suffice.
I am applying for the mini-PHIL because I am in an emergency situation. My 4-year-old son is moving in on November 20 and our home’s oil heat system is no longer operational. We need to install a gas furnace and reline the chimney as soon as possible in order to make the house a safe environment for a young child.
I also hope to take care of the remainder of my high interest debt, as permitted by the mini-PHIL guideline. Thus, included in the application is the amount for the new gas furnace, the amount for the chimney relining, and the remainder owed to Capital One. I understand that the mini-PHIL contains a recommendation for credit counseling, which I am happy to undertake, but given the emergency nature of the home improvement I would prefer to schedule such counseling until after the furnace has been installed. Also, please note I have a co-signer for this loan, namely my father.
If you have any questions for me, or if I’m missing any information, you can reach me at [redacted]. I look forward to working with Commerce Bank and the City of Philadelphia to repair and maintain my dwelling.
Sincerely,
Brendan Skwire
My father and I set some time aside to re-apply in person at my local branch (the underwriter is offsite, and works from home), where I explained to the woman the urgency of the repair. My dad, who has excellent credit and no debt at all, co-signed. The woman said that she saw the need for the loan, that it was clearly an emergency and she would expedite the loan directly to the underwriter. “Call back in a week,” she told me. Seven days later I called, only to learn I’d been declined again. As you might imagine, I was surprised and distressed: after all, the underwriter had promised me that if I straightened this stuff out, he’d work with me to obtain the loan. When I asked why I’d been declined a second time, my bank told me to call the underwriter directly.
I dialed Hamp’s number and when he picked up, I lit into him. “Why did you decline me a second time?” I asked. “I met all your requirements, and I included not only receipts but my payment plan! You know there’s a little kid moving in, so what’s the deal?”
“Wait a minute, wait a minute,” Colzie begins. “Mr. Skwire, I haven’t even seen your loan.”
“That’s not true,” I replied flatly. “I just spoke to the bank and they said that YOU had declined me and that YOU could tell me why. So tell me sir, WHY?”
Colzie sighed, and then told me something I had never heard in this entire two-month process: it seems the bank has an automated system that pre-approves and pre-declines all loans before they reach the underwriter’s desk. Think about that for a minute: you have a loan program specifically set up for low- and moderate-income families with imperfect credit. But the bank treats those applications just like any other loan application, and subjects the very people who are supposed to benefit from a special program geared to their specific circumstances to the exact same credit scoring process as someone with pristine credit.
I began to get really angry, not just for myself but for all the other families that may have been denied unfairly by this system. I began to think about the single mom who works two jobs and doesn’t have the time to call the bank over and over and plead her case. I began to think about the immigrant family that doesn’t speak English well, and didn’t know to ask. I thought about families in which the parents don’t even have a high school diploma and may not be as aggressive, tenacious, or as informed as I am.
In any event, Mr. Colzie promised to get a copy of the loan application itself and take a look at why I was declined. Meanwhile, I called the Redevelopment Authority. They were as surprised as me to hear about TD Bank’s automated system, and when I began to ask if they knew how many other families like mine were declined the woman’s voice grew serious. “There are 250,000 Philadelphians without a high school diploma,” I reminded her. “We have an exploding immigrant population. How many of those families got caught up in this, who didn’t even get a chance to discuss their specific situation with someone, and got declined due to a machine? How many just gave up?
“I have resources in my family I can go to if I can’t get this loan,” I continued. “I sure would hate to think that some little kid is going without heat or hot water because TD Bank’s computer decided they weren’t qualified, and subjected them to an unfair standard. Do you think this is fair?”
“No,” she replied. “It’s not fair at all. And as it happens, we have a conference call with TD Bank tomorrow, and I will make sure this is on the agenda.” I thanked her for her time and called Mr. Colzie the underwriter back. By this time he had obtained the loan application. The reason for the rejection had changed: whereas the first rejection was because of a bad debt to the state of New York, NOW the problem was the fact that I already have a home equity loan. This was a ridiculous reason, because I had never ever been late on the loan, and had never missed a payment: in short, my bank was holding a good loan against me. “This is what I want you to do,” Mr. Colzie said. “I want you to go through credit counseling. then we’ll see what we can do about this loan.”
“We’ll see” is never promising, but I agreed to go through the counseling, and signed up. Counseling means a one-hour session that examines my bills, two years worth of W2s, pay stubs, and then plugs everything into a budget worksheet. All of the paperwork is then submitted to the Greater Philadelphia Urban Affairs Commission, which takes about a week or two to process the information and decide if I’m qualified, then sends the application with their blessing (or not) to the bank to make the final decision. At this rate, the furnace wasn’t getting installed until well after Sam’s visit was over, but there was a chance my father could advance me the money and then I’d pay him back in a lump sum from the loan.
The next day I got a call from Mr. Colzie that can only be described as “panicked”. “Mr. Skwire, what’s going on? What exactly is going on here?”
“Hamp,” I said, “I’ve been applying for this loan now for almost two months. I’ve jumped through every hoop you and the bank have set up, and frankly I think you’re stalling. My kid’s moving in less than two weeks. I have all my contractors lined up. Now I have to do credit counseling, which I’ve signed up for, but that’s going to take a couple of weeks to process. To be honest, whether I get this loan or not, I don’t think I’m going to do further business with TD Bank anymore. I don’t think the bank is fair to customers. I think your business practices are unfair and I don’t want to reward that kind of behavior. In fact, as soon as my latest bills clear, I’m withdrawing everything except for the equity loan account and moving to the credit union…”
“What? OK, I want you to explain what’s unfair about TD Bank…”
So I explained, again, the automated system that had declined me. And how no one had ever told me anything about it. “You guys wasted my time when I could have been applying elsewhere.” And about how many other applicants may have been declined unfairly from a program meant to benefit low income families.
“OK, I let you vent,” Colzie began, using an interesting choice of words chosen to dismiss my completely valid concerns. “But you’re mistaken: the PHIL loans are meant for everyone.”
“Yes, I know,” I replied. “But I applied for a MINI-PHIL, wrote it in big letters right on the application, and that loan IS for low-income families with dented credit specifically, and I was declined like everyone else by the automated system.”
Colzie’s story then changed. “You were put into that system by accident.” Two days before, “every loan” went through the system: now it was an accident.
“You know,” he added, “I was going to give you the loan after the credit counseling.” This was also quite different from “we’ll see”, the previous response. I wasn’t a fly on the wall, but by his tone of voice it seemed fairly clear that the RDA had called and that the conversation hadn’t gone too well.
Later that day, the credit counselor called and asked to push the session forward a day or two. I told her I didn’t think i was going to get the loan and that my father had agreed to help out. “You’re probably better off this way,” she said. “I have some applicants with credit scores in the high 700s, and they’re getting the runaround too. The fact is the banks aren’t lending.”
“If I change my mind, I’ll give you a call,” I said. Over the weekend, my father suggested I sign up anyway, figuring it was better to obtain a loan from the bank than from a family member. I did so, and on Monday called the credit counselors to re-schedule. As requested, I called Mr. Colzie to tell him that I was scheduling the credit counseling, and that I was proceeding with the loan. I asked that he call me back asap so we could discuss any other issues.
I called on Monday: it’s Thursday, and I haven’t received any response whatsoever. I think that tells you all you need to know about whether my bank is actually serious about lending me money or whether they just want to play more games. My father has advanced me the money, which I’m paying back at a 5% interest rate, exactly the same rate offered by the PHIL loan program. My furnace was installed yesterday, the chimney got relined today, and tomorrow the gas goes on.
None of this was made possible by TD Bank, which took a look at an emergency situation that involved an individual who fit into an income group the bank has partnered with the city to help. TD Bank did not live up to its responsibilities, and as soon as the checks to the electric company, the water company, and the various contractors have cleared, I’m taking my money to my local credit union, which is a lot closer to my house, that pays a better interest rate, and actually looks out for the customers rather than treating them like some kind of trained poodle.
This post has been cc-ed to the upper management at TD Bank. Later this week, I’ll be bringing Sam into my branch to introduce him to the people who wanted him to be cold.
November 20th, 2008 at 3:35 pm
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