More questions continue to be raised about the Wells Fargo scandal. When did it really start- 2013, 2011 or as far back as 2005? What did execs know and when did they know it? How many frontline employees were fired because they complained as whistleblowers? Does setting up a fake account constitute criminal identity theft?
Should deposed chairman and CEO John Stumpf go to jail? Should he pay back some more bonus compensation? If the culture was so pure, how did a frontline worker get “addicted to (drinking) hand sanitizer?”
Here’s a flyaround of some of this week’s news (we didn’t want to make the blog too long!) you can use about the still-growing Wells Fargo scandal that has seen highly-paid execs firing a few thousand low-level workers, paying a few million dollars in fines and hoping it goes away. It did not.
BBB “Discredits” Wells Fargo: Did you know that even the Better Business Bureau (consumer groups do not usually consider BBB membership a high bar) has “unaccredited” Wells? Screen shot at right courtesy The Consumerist blog and story.
California Attorney General Kamala Harris Says Fraudulent Accounts May Be Identity Theft: The San Francisco Chronicle says her investigation is into “identity theft on an industrial scale”. The paper goes on to say: “It remains unclear who might be targeted if the charges materialize: bank executives who pushed unreasonable sales goals or underlings who carried out the identity thefts, one customer at a time.”
New Running Tally of Investigations, Lawsuits and Other Actions: Compiled by the Charlotte Observer, the list includes the CFPB (still investigating), the U.S. Department of Labor, the Securities and Exchange Commission, several U.S. Attorneys (criminal investigations) and myriad Congressional Committees, plus it includes actions to remove Wells business by the Treasurers of Massachusetts, California, Illinois, Ohio and cities including San Francisco, Chicago and Los Angeles.
“Lions Hunting Zebras:” Stacy Cowley in the New York Times interviews a number of former Wells Fargo staff about the high-pressure sales culture and some of the tactics used, including to convince consumers that they “needed separate accounts for such purposes as traveling, grocery shopping and saving for an emergency. “They would deposit their money and get hit with fees like crazy, because they got confused about what account they were using.”
“Addicted To (Drinking) Hand Sanitizer”: In a separate story, Voices From Wells Fargo, with excerpts from those interviews, Stacy Cowley reports on actual anxiety and stress-related problems faced by those workers: “One morning, before meeting with a customer, in which I knew I was going to have to sell unneeded services, I had a severe panic attack. I went to the bathroom and took a drink of some hand sanitizer. This immediately reduced my anxiety. From that point, I began drinking the hand sanitizer all over the bank. In late November 2012, I was completely addicted to hand sanitizer and drinking at least a bottle a day during my workday.”
Frontline Bank Workers: “Wells Fargo Is the Tip of the Iceberg:” I first went to Capitol Hill with some fired and current Wachovia (now part of Wells) bank employees over six years ago to talk about unattainable sales goals harming consumers. Those employees, organized as the Committee for Better Banks, continue to provide important information to journalists and others. This blog from their partner, the National Employment Law Project, is called: “Wells Fargo Is Only The Tip of the Iceberg.“
Where Is OCC’s Latest CRA Rating for Wells?: U.S. Rep. Maxine Waters of Los Angeles, ranking member of the House Financial Services Committee, has demanded that the primary prudential regulator for Wells Fargo, the OCC, release an updated Community Reinvestment Act (CRA) rating for Wells. “Despite these very recent and serious abuses of consumers, the OCC has continued to approve transactions and branch expansions for Wells Fargo—as recently as last year—based on the bank’s 2009 CRA rating of outstanding,” the letter states. “That is unacceptable.”
San Francisco (WF’s Home City) Is Severing Ties: Here’s an excerpt from a blog from CALPIRG director Emily Rusch from earlier this week, Taking on Wells Fargo in their Hometown: “Today I stood on the steps of San Francisco City Hall with Treasurer Jose Cisneros and Supervisors John Avalos and David Campos to support the introduction of a resolution ending any formal financial ties the city has with the hometown banking giant Wells Fargo.”
Opponents of CFPB (Incredibly!) Double Down on Attacks: Despite the CFPB’s yeoman work in coordinating a three agency consent decree and continuing a national investigation of misconduct by Wells, the bureau’s opponents in Congress and at powerful banks and trade associations somehow are seeking to use the scandal to attack the CFPB. We’re fighting back. In response to Rep. Sean Duffy’s (WI) unfounded claims in the Chippewa Herald that the CFPB was “asleep at the wheel,” Wisconsin PIRG director Peter Skopec’s reply letter states: “The congressman claims that despite the CFPB, Wells Fargo still broke the law, so the CFPB doesn’t work and should be replaced. Some companies will cheat, with or without tough banking laws. But thanks to the CFPB, cheating now comes with serious consequences. The agency has already returned over $11.7 billion directly to more than 27 million consumers victimized by credit card companies, payday lenders, banks and debt collectors. In the case of Wells Fargo, it issued its biggest fine to date — a whopping $100 million.”
Why Not Jail? If you’re fed up with Wells Fargo, and bankers who look at big fines as simply a cost of doing business, then sign U.S. PIRG’s new petition asking the U.S. Department of Justice to “Please investigate Wells Fargo to determine whether criminal misconduct was condoned or covered-up by senior officials.”
Remember, this is only a one week snapshot of some recent actions around the fallout from a major bank fiasco. The Wells Fargo scandal raises major questions about how massive federally-insured and chartered institutions make money. Do they fairly take into account the interests of their customers, let alone their frontline workers? We encourage reporters, the public, bank accountholders, bank workers and government agencies to keep asking questions. We do not yet have all the answers. Some changes have been made. While they appear to be necessary, they are not sufficient. But one thing remains clear: the idea of the CFPB needs no defense, only more defenders. Thanks to the CFPB, cheating now comes with serious consequences.
Senior Director, Federal Consumer Program, PIRG
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.