Penfed CU check by WF

[NoMoreE46]

So I closed my PF membership (card and savings) and got a check for the $5.00 I had in there for membership.

What caught my eye while depositing is that the PF check is issued thru Wells Fargo...

[TrapLine]

 "Oh, what a tangled web we weave, when first we practice to deceive" ...

Got'ta love it! A puppet of Wells Fargo Financial (or not). 

[FicoMike0]

That is odd.

[Patient957]

It's not that unusual.  My Schwab brokerage account takes deposits via a Chase account.

[Anonymous]

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@Patient957 wrote:

It's not that unusual.  My Schwab brokerage account takes deposits via a Chase account.

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Schwab (+ Fidelity, my Cash Mangement has a UMB routing number) aren't banks, so for certain things need to go through a bank.    But I would have assumed that a CU wouldn't need to!

[TrapLine]

One item that came to mind after reading on this post. Some financials partner with what is titled a "correspondent bank" and certain items are processed using the correspondent bank.

It was mentioned that Schwab and Fidelity Investments use banks since neither one holds a bank charter so, they "partner" with bank(s) that do.

Features of a "Correspondent Bank" may include:

• A correspondent bank is an authorized financial institution that provides services on behalf of another financial institution. 
• Correspondent bank's services may include funds transfer, settlement, check clearing, and wire transfers.
• The accounts held between correspondent banks and the banks to which they are providing services are referred to as nostro and vostro accounts.
• Domestic banks can serve their international clients and gain access to foreign financial markets by using correspondent banks, rather than setting up branches overseas.

[NoMoreE46]

Yes thank you  @Anonymous and @TrapLine .

I can see Schwab being in a Correspondant bank relationship

PenFed is a major CU 😆.  

[Matt9543]

Well to be fair, Charles Schwab does have a full bank subsidiary with an ACH routing number and FDIC insurance 

[UncleB]

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@Matt9543 wrote:

Well to be fair, Charles Schwab does have a full bank subsidiary with an ACH routing number and FDIC insurance 

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Yeah, Charles Schwab Bank is very much an actual bank.  This is one reason I went with their checking account over Fidelity's CMA; in the unlikely event there's a problem I want one-stop shopping for the resolution.

There's obvious separation between the brokerage side and the banking side... that said, I admit it's always been a head-scratcher why they'd use Chase on the brokerage side for ACH clearing over their own bank, but I'm sure there's a good reason. ¯\_(ツ)_/¯