By the Lending Lies Team
It is now obvious that the major banks have gone rogue. The latest Wall Street scandal shows that 5,800 Wells Fargo employees engaged in identity theft by knowingly setting up ghost accounts not only to bolster their sales commissions but to improve Wells Fargo’s bottom line. Where is the outrage? All customers should close their accounts with Wells Fargo to demonstrate that consumers demand accountability from their banks.
A decade has passed since the general public became aware of the outrageous mortgage fraud- and to date, the government at the behest of the big banks, has not done anything of real consequence to instill accountability and lawfulness in the lending and servicing industry.
The banks have now been conditioned that they can break any law, commit fraud, and profit from their dirty deeds and that their only punishment will be a slap on the wrist and a small fine. The fines levied against the big banks are now computed as a “cost of doing business” and added into their profit and loss analysis. The executives can relax knowing that their white collar crimes will raise barely an eyebrow and low-level employees who participate in these schemes will simply be dismissed.
Wells Fargo is a perfect example of the Fraud-Profit banking business cycle. Wells Fargo paid a little under $190 million in fines and restitution after 5,300 employees were caught opening over 2 million unauthorized bank and credit card accounts- but made how many millions by doing so? Fraudulent practices are now mainstream procedures and if by chance a bank is caught participating in illegal behavior – an insignificant fee is paid and business goes on until the next scandal is revealed.
The large fines being assessed against the big banks are evidence that crimes have been committed and yet no criminal charges are filed. Executives appear to have plutonium shields that deflect any type of misconduct investigation or criminal charges being filed. Wells Fargo claims that the problems were systemic in nature but the general public, stakeholders and consumer advocates question why Wells Fargo is accomodated to act above the law.
The Wells Fargo modus operandi is to let low-level employees be scapegoated and take the fall. Temporary employees will likely not be eligible for unemployment benefits, but permanent employees will likely be able to claim unemployment if they weren’t fired for cause.
It is quite obvious that these profit schemes at Wells Fargo occur from the top down and yet no formal investigation of the ring leaders will be conducted. How could 5,300 Wells Fargo employees scattered across the United States all be engaging in the same fraudulent behavior unless this was a master-plan designed and implemented by upper management? What other scams are being perpetrated against Wells Fargo customers?
It is already established that Wells Fargo forecloses on homes that they don’t own, creates legal documents out of thin air and participates in other unsavory mortgage servicing activities. Wells Fargo has now been fined billions of dollars over the last decade for business improprieties by the Consumer Fraud Protection Bureau, Office of the Comptroller of the Currency, Attorney Generals at the state level, and has also paid homeowners millions of dollars in private litigation to settle servicing and foreclosure violations of law. Why has there not been a top to bottom investigation by regulators regarding these unscrupulous and illegal practices that undermine consumers and investors alike?
Regulators have failed the American people by failing to hold individual executives and bankers accountable. Until the system punishes the wrong doers and holds these individuals accountable, these institutions will continue to devise illegal and predatory schemes and destroy any remaining integrity in the banking system. The FBI and Department of Justice simply wag their fingers while doing nothing to enforce the rules, regulations and laws that govern banking practices.
Without enforcement and prosecution Wells Fargo and other banking organizations will continue to harm customers and investors. If you can’t trust the banks to safeguard investments, accounts and even consumer privacy- you are better off not doing business with such an organization. Your own mattress or coffee can buried in the back yard begin to look like safer places to put your money.
Representative Maxine Waters who is the top Democrat within the House Financial Services Committee commented that the Wells Fargo settlement mimics the same practices that occurred during the financial crisis noting that employee compensation protocols should not encourage employees to break the law. “It may be the case that some banks are simply too big and complex to manage effectively,” Waters commented.
At this point it is blatantly obvious that bank examiners must scrutinize the business practices of Wells Fargo. Wells Fargo’s behavior is damaging to the entire banking industry and has proven that in order to generate revenue they will engage in illegal and unethical business practices until forced to stop.
The CFPB and the OCC cannot criminally prosecute, but can refer cases to the Department of Justice, who has rarely taken meaningful action against bank executives. The OCC has the ability to remove officers and directors and bar particular individuals from working within the financial industry, but rarely does so and to date has not enacted any prohibitions against any Wells Fargo employees in this particular case.
Wells Fargo is already utilizing spin doctors for damage control. On Friday, Wells Fargo took out ads in every major newspaper as damage control and had the audacity to assure customers that Wells Fargo is committed to taking care of them. Obviously Wells Fargo’s customer care includes institutional customer identify theft, fraudulent foreclosure, and other unsavory business practices that may also undermine investors.
The bank executives at the mega banks have learned through the financial crisis and subsequent fallout that they can commit fraud, violate securities and bank laws, and be financially rewarded for their deliberate indiscretions and conduct. In fact Wells Fargo CEO Carrie Tolstedt, one of the masterminds of this fraud, announced her retirement in July, and is set to receive $124.6 million via stock for her fraudulent efforts. Congress may be holding inquiries and demand that some of Tolstedt’s compensation be clawed-back. See: http://www.foxnews.com/us/2016/09/13/wells-fargo-exec-who-headed-unit-involved-in-scandal-due-125-million-in-retirement.html
CEOs at the smaller and mid-sized banks will be prosecuted and heavily fined for the same practices the big banks engage in. There is something very wrong about the selective enforcement of law that allows the big banks to ravage economic stability with their misdeeds. The entire big banking system is a pathetic and unlawful sham.
Even Warren Buffett whose Berkshire-Hathaway applied to the SEC in July for special permission to purchase more Wells Fargo stock has gone silent: https://www.bloomberg.com/gadfly/articles/2016-09-13/warren-buffett-s-silence-on-wells-fargo-speaks-volumes. Truth is stranger than fiction.
For a list of Wells Fargo “misdeeds” see: https://en.wikipedia.org/wiki/Wells_Fargo