New Orleans News reports, partially attributable to banking giant, Wells Fargo, indicate that they are about to face an additional fine of $1 billion dollars from a variety of governmental agencies including the largely de-fanged Consumer Financial Protection Bureau for their high crimes and misdeeds. As everyone should be ceaselessly reminded in the case of this criminal enterprise, they were found to have opened accounts without permission for consumers and in other cases, jacked up interest rates for different consumers on auto loans, and a handful of other practices called mildly “customer abuse,” but really plain stealing from their customers. This one billion is on top of more than four billion that they have also been fined by the Federal Reserve in addition to a public slap down administered by Janet Yellin, former head of the Federal Reserve, as she dropped the microphone in one of her final acts before surrendering the post to Trump’s appointed successor.
In my view Wells Fargo has long been a criminal and near criminal conspiracy that has permanently damaged countless neighborhoods and millions of families. All of these penalties are past due recognition of the outrageous, litigate and coverup, money first before all things culture that has characterized the bank for years. The fact that none of the executives were criminally charged is a testament to the coziness of class in America and the huge corporate legal shield built around banks and other businesses. Real regulators would have seized the bank, taken away their charter, put them on permanent supervision, or any number of other steps that would have forced change rather than allowing them to pay some and charge off the rest of these billions of dollars’ worth of fines on their books and taxes.
Amazingly, a columnist in the New York Times, James Stewart, has summoned a bunch of business school professors for statements that maybe Wells Fargo has been “punished too much.” He mentions that no executive was criminally charged. I would have been all for that as well, but they were shielded by the corporation itself. Liability exists for the corporation when the practices are systemic, which is why it is just that the corporation be fined for its front-to-back rip-off culture.
Stewart, with the professors, tries to plead for the poor shareholders, mainly big timers and institutions which dominate all of these markets, as being the ones punished. Incredible! Where were the shareholders, as they rubber stamped board and management practices annually while all of this abuse was happening? Did the shareholders demand board changes and board resignations? No, that was the Federal Reserve, not the shareholders.
Stewart and other bank apologists want to argue that the bank is taking great steps to change. Another billion dollars fine seems like a good way to make them move even faster and more forcefully to change their culture. Maybe even permanently.
The shareholders looked the other way when Wells Fargo was padding its books with these practices and enjoyed the good times. There’s some justice in the shareholders having to also pay a price for the bank’s grand larceny in these times.
The business school professors might want to take some of the ethics classes at their colleges. They can invite Stewart to audit those classes as well.