<a href="https://x.com/pitdesi/status/1802337976623755701" rel="nofollow">https://x.com/pitdesi/status/1802337976623755701</a><p>There was a good thread about this on Twitter which the CEO of Bilt responded to.<p>Summarizing the WSJ article it sounds like Wells Fargo made some bad assumptions when underwriting the card, specifically:<p>- 65% of the spend on the card would be non-rent (in reality less than 30%)<p>- 50-75% of the balances would be revolving (in reality 15-25%)<p>Here's a direct link to the CEO's response:<p><a href="https://x.com/ankurjain_2/status/1802370451714281930" rel="nofollow">https://x.com/ankurjain_2/status/1802370451714281930</a><p>The main points seem to be:<p>- Bilt is helping Well Fargo acquire high value customers.<p>- It's still early on in their partnership and the numbers can change.
As one of the "systemically important" (too-big-to-fail) banks, Wells-Fargo can make many bets that, when they lose, will ultimately be covered by taxpayers in the next round of bailouts, but if they win, will reward insiders & shareholders in the periods between bailouts.
Wells Fargo color scheme works for me. Red = danger, yellow = warning - the signal colors for Stay Away.<p>ref:<a href="https://duckduckgo.com/?q=wells+fargo+"fined"" rel="nofollow">https://duckduckgo.com/?q=wells+fargo+"fined"</a>
Something I never entirely get about the credit card business is how they can offer deals without it being obvious they only make money if you make mistakes?<p>If it was a good deal for me, surely the bank loses some money on that?
It’s not really the main point of the article so it gets glossed over, but it sounds like Bilt was deterministically generating card numbers and expiry dates? That’s wild.
This whole deal is very confusing.<p>What exactly was Bilt Technologies providing? My expectation is they would used AI/BigData/TheForce to identity which renters are likely to be balance carriers. How did they not hold any risk for the leads/users they generated?<p>So Wells eats the HUGE interchange fee from the rent, and then divides the piddling remaining fees with BILT and pays them $200 for each customers?<p>The use case, is give landlord this card alone, set for auto pay, and earn “points” but then do all other spending on a higher reward card it seems like? What were the points? Cards are routinely paying 2% cash back…
Bilt is shit. My apartment complex megacorp changed to them about 2 months ago.<p>On signup, the have an <i>opt-out</i> credit card application where they try to force a credit card on you, they failed to disclose they charged a 3% fee for paying with a credit card until after signup is completed. They send unsolicited ads for random products and services as push notifications with no opt-out.<p>I'm also not renewing my lease, and this is one of my reasons.
"Costing the bank dearly" = losing $10 million a month, which is trifling for Wells Fargo.<p>The Bilt card is a no brainer for any renter who qualifies. There is zero opportunity cost to the points earned on rent.
Color me shocked that customers who float their monthly rent on a credit card are not the solid foundation that one can build a banking business on top of.<p>"We will make up for it in volume!"