The long long screw of big banking continues to squeak deeper. Following the release of our big banking piece “Lights and Siren. Is that Wells Fargo?”
two of the largest states in the country have moved to curtail or end business with Wells Fargo. Calpers, the massive California pension plan announced a suspension of their business with Wells. New York intends to complete current engagements with the bank and then bring the relationship to an end.
Regardless of the full intention behind these moves, the pain for the bank will be real. Businesses churning through stacks of criminal charges have no need for more bad news. Nonetheless, on July 17 a Wells branch in Marietta Georgia was the site of a hostage standoff, ending in suicide by police.
Mother of Chaos is Wells. Late last week we learned that the fake accounts scandal at Wells Fargo spanned six years and now 3.5 million bogus accounts. Are they yet counting somewhere? Who knows and who could believe them now?
Have we the public grown used to the three-headed hydra of Wells Fargo? Fake savings, fake checking, and fake line of credit. But don’t worry. The bank promises to contact you concerning any fees owed–regardless of the authenticity of the account yo–it’s all good. It’s even better really.
Therein lies the trouble, one trouble, in lying, cheating, deceiving, and stealing. Once discovered, companies such as Wells Fargo, are damaged goods. Are companies like Wells worthy of our trust? What about Buffet?
Their home mortgage and retail banking businesses used to be attractive to both customers and investors.
Snake oil salesmen live yet, only they have branch offices and receive deposits from behind bullet-bouncing glass. Well, can we blame them? How hated should they be? Well, 3.5 million fake accounts means that 1 out of every 100 people in the United States could have had a fake account.
You want results? Plug the search machine with “wells fargo defrauds vets.” 471,000 results in 0.68 seconds. O.K., the bank was charged for cynically targeting vets. Back in 2006 Wells was operating in Georgia under an Administration of Veterans Affairs loan refinancing program. Oh boy. Such programs are proved fraud playpens to large financial institutions, and many along with Wells, were charged here.
This time Wells was accused of overcharging vets, concealing those charges from the feds, in order to qualify for guarantees on said loans. That’s called fraud. Wells agreed to pay $108 million–no wrong doing involved yo. Or was that, no wrong-doing you can afford to prove?
Does Wells view all this as a problem, or rather a wake-up call that the total addressable U.S. fraud market is 99% larger then their current penetration.
How does any genuine Board of Directors continue to justify Wells senior management?
Does Wells Fargo need to sink to the level of Enron before commercial and retail customers refuse to do business with the bank?
How about the car buyers pushed over the edge into default and repossession by charges for insurance never ordered? The last time Wells blew-up over this scandal they sent out the stage coach; brand-building earthy-toned ads no one could hate.
UPDATE; 1-17-18. New Wells Fargo ads feature the bank itself as fraud protector. The federal government has been investigating Wells Fargo for criminal action more-or-less nonstop for at least a decade. Now they are fixed?
Now they feature a lovely young woman proclaiming down her phone “I’m so glad you caught that.” Rjight. Wells now protects customers from fraud. TV always makes things better. Wells Fargo was and yet is in long-haul damage control. The bank is banking on you, again. They love you, again–and want your trust, again.
Go ahead. Open an account–no need to monitor your statements because “We’re all good, again.” Wells is appealing directly to the very retail customers they systematically targeted and victimized. Is this really any different from unloading a garbage truck on your customer’s front lawn at 3:00 am, then simply shrugging the whole thing off when discovered by saying “We’re committed to you now–and don’t ya forget it. We fired all those people.”
If trust is such an asset why do large financial institutions treat trust with flaming disdain?
Have we grown indifferent in the presence of such smash-mouth illegality? Banking crime, that’s what it is, effects real retail customers, real tax payers, real employees of nearly every kind. The study results remain the same. The higher the stakes, the more likely people are to behave unethically.
What did Wells do? Out of thin air Wells Fargo created 2 million fake accounts–fraud, systematic fraud; charged fees on said fraudulent accounts–theft, systematic theft, not to mention all applicable federal banking regulation violations. Even in sentence fragment form the brute fraud reads the same way; two million fake accounts. “Hey, free fees,” they must have thought.
When publicly exposed Wells shoved 5400 employees overboard. These now former employees were simply acceding to the heavy-handed directives of management. Next, the bank’s CEO John Stumpf strode up Capitol Hill and promptly blamed the entire fiasco on employees, while simultaneously claiming “the buck stops here.”
Yet the bank was not done. Wells Fargo proved so distraught over their systematic rip-off that they cleaned house by promoting a tenured senior Wells insider to replace Stumpf. If you enjoy this type of institutional behavior, then start following the antics of the International Olympic Committee.
As of writing Wells Fargo(WFC) was trading at $50.04. 52 week high/low $59.99–$43.55. Only Goldman Sachs is valued less by investors.
Images sourced from Pixabay.