Friday, August 7, 2020

Wells Fargo Ought to be Stepped on Like a Bug


In a conversation with a friend, who happens to be a retired international banker, I sounded off about my litany of banking complaints—and they are many—from mild forms of client abuse to outright scandalous conduct.

He smiled that smile a parent produces when a child is showing its naivety. Leaning back in his chair, he tented his fingers and grinned at me over the tent.

You don’t understand, Jim. That’s what banks do. They spend their waking hours devising new and creative ways of separating their customers from their money. It’s their defining purpose and should they falter, their stockholders will punish them severely.”

But surely there are laws,” I replied.

Indeed there areand very severe ones at that—but no banker has been convicted in this century and every major bank has a slush-fund of tens and sometimes hundreds of millions of dollars, as well as very skilled legal firms with which to defeat the law.”

Now a book could be written about the distance between consumer understanding and reality contained in that reply and no doubt a number have been published. But it is not in your interest, nor mine, to sift through the intricacies of modern banking.

Hence my suggestion that Wells Fargo simply be squashed like a bug.

I hereby lay out my case for squashing…

…(Where else but Wikipedia?) In July 2015, Wells Fargo became the world's largest bank by market capitalization, edging past ICBC, before slipping behind JPMorgan Chase in September 2016, in the wake of a scandal involving the creation of over 2 million fake bank accounts and illegal manipulation of other accounts by Wells Fargo employees.

I’m sorry, but I must break in here for a moment for a small dose of reality. Employees do not initiate illegal manipulations. Senior management initiates illegal manipulations. When push comes to shove (usually in a federal legal conference) employees will be accused, but the criminal is the CEO.

It’s so tidy that way and few corporations hold tidiness in such high regard as banks.

No one goes to jail.

No one admits having had the slightest lapse in judgement.

There is a multi-million (or billion) dollar fine paid, that’s charged off as a business expense (thank you, taxpayers) and the band plays on…

…how do I understand your immunity from law? Let me count the ways:

1) 1981 MAPS Wells Fargo embezzlement scandal

2) Higher costs charged to African-American and Hispanic borrowers

3) Failure to monitor suspected money laundering

4) Overdraft fees

5) Settlement and fines regarding mortgage servicing practices

6) SEC fine due to inadequate risk disclosures

7) Lawsuit by FHA over loan underwriting

8) Lawsuit due to premium inflation on forced place insurance

9) Lawsuit regarding excessive overdraft fees

10) 2015 Violation of New York credit card laws

11) Executive compensation

12) Tax avoidance and lobbying

13) Prison industry investment

14) SEC settlement for insider trading case

15) Wells Fargo fake accounts scandal

16) Racketeering lawsuit for mortgage appraisal overcharges

17) Dakota Access Pipeline investment

18) Failure to comply with document security requirements

19) Connections to the gun industry and NRA

20) Discrimination against female workers

21) Auto insurance

Squash it. Simply step on the fucker and walk away.

Or, take the Liz Warren solution and send a CEO (or two) off to the pokey. It needn’t be a long term—a year or two would get the message across big-time and all this bullshit abuse of reasonably honest, hard working holders of mortgages, car loans, credit cards and small business loans would disappear in a heartbeat.

It’s Freeman’s bug theory; if it doesn’t pollinate something or serve as part of the food-chain, step on it.

Particularly if it buzzes in your ear or stings.

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