Thursday, September 22, 2016

Wells Fargo Bankster Hustle Shows Dodd-Frank Is Toothless To Protect Customers

Recall five months ago I referred to a  WSJ piece in which the author (Donna Borak)  made clear Bernie Sanders knew exactly what he was talking about re: reining in the banksters. Further,  it was the outside media and Neolib hacks (like Barney Frank)  that made a right mess of it.  Thus, to quote the article on  the authority the government could use to break up the big banks, we learned:

"Mr. Sanders said a bill he introduced in May, 2015 would give the Treasury Secretary authority to break up big banks but leave it to the institutions to figure out how to restructure"

Further details (ibid.):

"Under his plan, The Financial Stability Oversight Council, headed by the Treasury Secretary  - would have 90 days to compile a list of banks deemed too big to fail,  The list automatically would include institutions like Wells Fargo, JP Morgan Chase & Co., Goldman Sachs Group Inc, Citigroup Inc, Bank of America Corp. and Morgan Stanley

Now in retrospect we see how prescient Bernie was as the Wells Fargo bankster scam has unfolded. For those who have lived under a rock, or don't follow finance stories, let me summarize: Wells Fargo's banker honchos - including top bankster banana John Stumpf (recently grilled by the Senate Banking Committee) set ridiculous sales quotas for retail bank employees which led to millions of sham accounts set up (in customers' names)  that customers knew nothing about. In some cases, as many as 7-8 accounts per bank customer were set up which dinged the owners with multiple bank fees. It was only after going through statements they became aware of how they'd been played.

Former employees quoted in a recent (Sept. 17) NY Times Business piece affirmed the "biggest problem was Wells Fargo's aggressive sales culture which was nurtured and honed over decades at the bank's highest levels."

In other words the scam bank "buck" can be parked right at Stumpf's door.

According to one former bank employee, Sharif Kellogg, based at a Wells'  branch in Catonsville, MD:

"The branch managers were always asking: How many solutions did you sell today? They wanted three to four a day. In my mind that was crazy. That's not how people's financial lives work."

Which is exactly true. Indeed, wifey and I have been customers at a local Wells Fargo branch for over the past 13 years, and although offered "deals" we never at any time had more than a limited number of accounts, including CDs.   I'd estimate the  grand total over all that time would have been six at the most, and currently only three including a CD.  It's hard enough to keep track of a few accounts far less ten running at a time as some Wells cusstomers were faced with

For his part, Kellogg- referenced above - was constantly hounded by his branch supervisor to increase his sales or "solutions" as they were known. Quoted in the Times he said:

"I was always being written up for failing to bump up my soloutions numbers"

And this happened to a guy earning only $11.75 an hour. Yet it was these lower grade employees who bore the brunt of the 5,300 layoffs. This is while the honchos that engineered it  are still sitting pretty with their mammoth multi-million dollar bonuses, stock perks and paid vacations for getting employees to sell shit to those who don't need or want it.

Wells'  chief executive John Stumpf actually had the chutzpah to deny the misdeeds were  the result of an aggressive sales culture or flawed inncenitve structure. But that would carry about the same credibility as me - when I taught space physics - claiming that assigning 15 labs and  15 projects per week would not entice students to cheat. No one with half a brain would buy such flagrant BS and no one ought to buy Stumpf's either.

In fact, under corporate criminal law - all Stumpf's posturing aside-  Wells Fargo is strictly liable for the criminal behavior of its employees acting within the scope of its sales business.

The really ironic aspect of this whole shameful farce? The bank employees were given ethics training and it insisted they adhere to high standards. According to one Wells teller writing in a Reddit forum:

"We go through SO much training about ethics and how you CANNOT do that. I got threatened to be fired as a teller because I wasn't meeting my numbers. I told them I didn't believe in trying to convince someone to spend money they don't have to get what they don't need."

And yet this employee, with high ethical principles, was found expendable because she merely refused to play the bank's aggressive profiteering game.

Wells' fired workers, for their part, actually managed to get some digs in at these bankster assholes using creative (youtube) cartoon videos, e.g.

Most are spoofs of the banksters'  hard driving "gimme my profits" culture and the fact ordinary workers were hardly getting rich meeting their bosses' specious hyper-sales targets. In one video, a cartoon banker drones on: "If tellers and bankers make those sales numbers each day, at the end of the month everybody in the branch gets a $5 gift card to McDonald's and the district managers gets a $10,000 cash bonus."

If it wasn't so damned pathetic you'd have to laugh.

Incredibly, as federal prosecutors are considering bringing charges, you have the spectacle of assholes like Stumpf giving false apologies and accepting "accountability" for lower echelon workers "misinterpreting sales goals".

That's really generous of this profiteering renegade, but how about him foregoing all his pay for the next  five years and returning all bonuses? Then giving the monies to the discharged lower rung Wells' workers? Of course, that would never fly. Neither the existing shredded banking laws, nor the high status exec culprits have the capacity or the honor.

What has happened is that Wells  has been fined $185 m - which is chicken feed to these guys. The bank also agreed last week  to develop a "broad oversight program" for its sales practices in a settlement with the Consumer Financial Protection Bureau. According to Wells Fargo spokeswoman Mary Esher, the "bank had considered this step for quite some time before finally deciding to eliminate the sales goals".

Why Wells would have to take "quite some time" to even consider robbery incentives for sales goals is beyond me. But perhaps the honcho banksters live in a different moral universe from the one I and  millions of other Americans inhabit. We don't possess all copper- -lined bathtubs e.g.

But we do know right from wrong.

And we wouldn't need harsh lectures by Senate Banking firebrand Elizabeth Warren. Sen. Warren, had she'd been nominated as Veep (as most of us suggested), would have saved Hillary's bacon with millennial voters (now turning to the 3rd party candidates.)

The best part of the Banking Committee session with John Stumpf was Sen. Warren raking the sleazy bastard over the coals, saying in part:

"You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket...Your definition of accountable is to push the blame to your low level employees.... This is about accountability. You should resign. You should give back the money that you took while this scam was going on and you should be criminally investigated. This just isn't right!"

Spoken like a person who actually looks out for citizens. But again, that requires having a moral imperative as opposed to money grubbing über alles ethics.. Don't look for a rat-faced bastard like Stumpf to follow any of her injunctions. This is a character with the morals of a leech.

See also:


"the truth of the matter is that cross-selling isn't meant to be good for customers. It's meant to inflate stock prices, and consequently enrich investors and executives, like Wells Fargo CEO John Stumpf himself."

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