Photo by Erol Ahmed.
Underscoring the critical need for public bank alternatives to hold the public’s money, Kevin Wack reports in American Banker that indictments are expected as soon as this month for former Wells Fargo executives under criminal investigation in connection with the bank’s fake-accounts scandal. Last week, the Office of the Comptroller of the Currency (OCC) brought the civil hammer down. Jeff Spross reports in The Week that Wells’ former CEO John Stumpf will pay a $17.5 million personal fine — the biggest penalty the OCC has leveled against an individual — and has agreed to a lifetime ban from the banking industry. Spross writes:
“The OCC released a massive 100-page legal brief detailing how Wells Fargo’s demands and sales goals, imposed by the higher-ups, turned the bank into a thunderdome for ‘hundreds of thousands’ of mid- and low-level employees. They basically had to either rip off customers, or be fired.”
The OCC found in a subsequent broad investigation of more than 40 banks that this was a system-wide problem — many other banks were creating fake accounts without customers’ consent — but chose to hide those results from the public.
Spross continues, quoting several former Wells Fargo employees:
“An employee wrote directly to Stumpf’s office, admitting that ‘I had less stress in the 1991 Gulf War than working for Wells Fargo.’ Workers at one Wells Fargo branch were told they would be ‘transferred to a store where someone had been shot and killed’ if they didn’t hit their sales targets. The OCC’s brief includes a cascade of emails and memos and other evidence showing Stumpf and the rest of Wells Fargo’s executive hierarchy either approved of what was going on, or were grossly negligent. The agency sensibly concluded that Stumpf should be held personally accountable for overseeing the ecosystem that created this whole mess; the buck, after all, stops with him.”
In a related article, Jack Kelly writes for Forbes:
“[Wells Fargo] bank branch staff were said to have used their own contact information on forms to prevent customers from discovering the fraud. Employees were accused of creating fraudulent checking and savings accounts by moving money out of existing accounts into the new ones. This was made possible by ‘pinning’— a process in which the customers PIN number was set to ‘0000,’ so that bankers could readily control their client’s accounts and keep them in the dark.”