New scandal: another 570,000 (800,000?) customers become victims.
Wells Fargo — “a community-based financial services company,” as it says — revealed late Thursday, after it learned that The New Times would blow its cover, that it had wrongfully charged 570,000 of its auto-loan customers for comprehensive and physical damage insurance (CPI) since 2012 though they already had their own insurance.
“In response to customer concerns,” Wells Fargo became aware of this issue in July 2016. It initiated a review of the “CPI program” — as it calls this profit center — “and related third-party vendor practices,” namely those of the insurance supplier National General. In September 2016, “based on the initial findings,” it scuttled its “CPI program.” It then hired a consulting firm to figure out what was going on.
The consequences were profound. The added insurance premium raised the car payment. If the increase was $50 per month on a particular vehicle, the total amount of additional money extracted from that customer over the duration of a six-year loan would be $3,600. Since many of these auto loans were set up on automatic payment on the customers’ accounts at Wells Fargo, these additional monthly amounts eventually drained the bank accounts and caused them to be overdrawn.
Victims who checked their accounts and found the larger payments and raised a ruckus were refunded the money. But many people didn’t check.
These wrongful CPI premiums “contributed to a default that led to their vehicle’s repossession,” the bank said. Their credit was ruined and “approximately 20,000 customers” might have lost their vehicle.
To drive the nail into the flesh more deeply, the bank then extracted insufficient funds fees, late fees, and other fees from its victims’ accounts which pushed them into default even faster. With this strategy, Wells Fargo caused all kinds of other mayhem in their lives as these folks lost their transportation to get to work, pick up their kids, or go to the grocery store.
The bank said that it is “extremely sorry for any harm this caused our customers….”
Wells Fargo said it already began issuing reimbursements to “some customers” as a disaster mitigation strategy before this blows up any further, as the other Wells Fargo scandals have. The rest of the victims will get letters and checks starting in August. In total, Wells Fargo will issue $80 million in reimbursements.
This is how the press release revealed the numbers (the numbers revealed by the New York Times, based on the leaked report by the consultants, are much worse – more on that in a moment):
Approximately 490,000 customers had CPI placed for some or all of the time they had adequate vehicle insurance coverage of their own. We refunded the premium and interest for the duplicative coverage at the time the customer made us aware of their other insurance. These customers will receive additional refunds of certain fees and some additional interest. Refunds for this group total approximately $25 million.
In five states that have specific notification and disclosure requirements, approximately 60,000 customers did not receive complete disclosures from our vendor as required prior to CPI placement. In these cases, even if CPI was required, customers will receive a refund including premiums, fees and interest. Refunds for this group total approximately $39 million.
For approximately 20,000 customers, the additional costs of the CPI could have contributed to a default that resulted in the repossession of their vehicle. Those customers will receive additional payments as compensation for the loss of their vehicle. The payment amount will depend on each customer’s situation and also will include payment above and beyond the actual financial harm as an expression of our regret for the situation. Refunds for this group total approximately $16 million.
For each of these categories, Wells Fargo will also work with the credit bureaus to correct customers’ credit records, if applicable.
These Well Fargo victims come on top of the victims of the 2.1 million fake accounts that bank employees had opened in their customers’ names. The bank paid $185 million in fines last September. It settled a class-action suit for $142 million. Chairman and CEO John Stumpf was deposed. A slew of low-level order-followers were fired. Some mid-level managers got axed. A number of federal and state investigations are still pending.
And in June, a class-action lawsuit and other lawsuits were filed against Wells Fargo, claiming that officials in its mortgage unit had made unauthorized changes to mortgages held by customers in bankruptcy. These changes extended the terms of the loans by many years. Borrowers would have to make payments for far longer and would ultimately pay a lot more interest to the bank. Any such changes would have required the approval of the court and the other parties in the bankruptcy. But according to the allegations, Wells Fargo made those changes without approval.
This time, Wells Fargo issued the press release when it figured out that the New York Times had obtained the 60-page report put together by consulting firm Oliver Wyman and would go public with it.
The Times, citing the report, put the number of victims at 800,000 (instead of 570,000), and said, also citing the report, that “some of them are still paying for” the insurance premiums.
Other numbers in the report were also higher. For example, the costs of the unneeded insurance pushed about 274,000 Wells Fargo customers into delinquency and caused nearly 25,000 wrongful vehicle repossessions.
The leaked report also found:
- The extra insurance was more expensive than the insurance customers had already bought on their own. Ka-ching.
- Wells Fargo received part of the commissions from those insurance sales until February 2013. Ka-ching.
- The way the car payment is structured, the additional insurance initially decreased the amount of principal paid with each payment, and thus increased the amount of interest the bank earned on the loan, the Oliver Wyman report found. Ka-ching.
- Wells Fargo was aggressive in repossessing the vehicles, and according to The Times, some victims “endured multiple repossessions, the report said.”
On Friday, now in full disaster-mitigation mode, the bank’s head of consumer lending, Franklin Codel, told Reuters that they’d been planning to disclose the problems eventually but not until they were ready to issue reimbursement checks. “The problem with disclosing to the marketplace today or several months ago is customers start calling and asking when they’re going to get their money,” he said.
Not to speak of the hit to the stock price, which fell 2.6% on Friday.
Dawn Martin Harp, Wells Fargo’s head of auto lending during the time this occurred, “retired” in April. Her deputy, Bill Katafias, also cleaned out his desk and left. They “were held accountable for their actions,” Codel said, including “from a compensation perspective.”
Wall Street sells “more financial products and generates more profits when investors are bullish.” Read… Risk has been Abolished, According to Institutional Investors
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– And the banksters are still wondering why they have such a bad reputation …………………………….
– It’s the “cost of doing business” right ? Because shareholders are demanding rising profits, rising dividend payments, rising stock prices right ?
– And those rising stockprices allow CEOs to play the “share buy back” game to boost their own “compensation”, right ?
Actually, I’m thinking of a different theory that’s fragmented at this point.
Economic Fraud is regional, with the region being subjective. ECB monetary fraud is regional to the Eurozone. The wealth effect was regional to Fed theories put into practice. Globalism is regional to countries with rising labor costs and cheap money. California has a form of consumer fraud that’s been regionalized.
California is weirdsville to all who don’t live there. Liberal to the point of bankruptcy and spend some more. You’re evil and worse if you’re not on Team Liberal, which is defined in ways beyond my comprehension as I try to define it.
I’m wondering if Wells Fargo perceived some vulnerability that was culture based and the culture was oriented to something particular to California that nobody outside of California would pick up on. Then they exploited it until somebody finally said “hey … wait a minute” loud enough for someone to finally notice.
A symptom of a bubble burst? Just spitballing.
Berkshire owns a lot of this, and Buffett also owns Quicken Loans, and we have had a lot of shark sightings off the coast this year. Just putting the two together.
Don’t forget the Californian Humboldt squid. Considered the most vicious of its species…
California would be richer if it didn’t pay as much welfare to the poorer red states in federal taxes. It’s one of the 14 states that gets back less in taxes than it pays. Some state residents are welfare queens and suck up other states’ productivity. Check it out.
https://www.theatlantic.com/business/archive/2014/05/which-states-are-givers-and-which-are-takers/361668/
I’ve lived in California and I’ve lived in flyover. California is normal compared to the Twilight Zone weirdness of flyover. And the sheep are a lot less nervous out here.
“And the sheep are a lot less nervous out here.”
I suppose if you are used to paying $1million or more for real estate that would cost $100,000 to $150,000 everywhere else, feeling content with California is normal. Kind of like being in a cult.
Sorry – another idea to support above …
The elites hate the concept of populism. They are openly contemptuous of it. Effort is expended discussing populism and how it might be defeated.
Fraud awareness coincides with populism. An aware population is one that is hard to control. One that blindly follows is preferred.
Perhaps Wells Fargo was engaging in something California would see as an adaptation of California elitism and now the goalpost has been moved? A California version of populism, lame as it is by finally complaining about blatant fraud, has reared it’s head?
What I don’t understand….how Wells Fargo still has 800,000 customers to screw. Do they like the pain?
Don’t you just love the California lifestyle. Everyone thinks they’re talking about someone else. Suckerville, USA.
Banks put themselves in these positions by pressuring their employees with their high sales and cross-sales performance standards. Pressuring to out perform every month or quarter. It’s not a healthy environment when you put their job is at stake.
Unless and until they are perp walked and/or have their Armani suits traded for the color orange, this bullshit will never cease.
I absolutely agree. I mean really repossessing 25000 cars and the amount they are willing to pay is less than $1000 per car… That amount should be at least triple that amount. After all, think of the values of the cars, they would have to be at least 5 grand per and would have been maintained etc…. These people are unbelievably GREEDY and will not stop until somebody hits them over the head with the Bedpan……
I bet Ol’ Warren wishes he had taken the cufflinks instead, but then where would he be able to get all that free Fed window money to buy stuff.
While your criticism is warranted, no pun intended, Warren doesn’t need any money to buy stuff. He’s got plenty. And even with it, he still lives in that same Omaha house and gets McDonalds for breakfast each morning.
Warren just likes winning the game and amassing the enormous gains.
And getting bail outs when his bets go wrong.
No need to lick his ass, dudea, it is not like he is going to read this and hire you.
I said that the criticism is warranted and stated the obvious fact that he doesn’t need money.
You interpret that as kissing up and job hunting. (Sigh)
And that he pays NO INCOME TAX on his wealth UNTIL the capital gains are realized… I figure he has paid less than 1 billion dollars over his life time on his wealth of over 50 billion dollars….. Of course he will whine that the corporations pay corporate taxes, but that is true for anybody with a 401k…
The real crime is that we dummies pay 1% EACH and EVERY YEAR for our homes…Over 20 years, that is 20%….. WE little people are so lucky to be able to pay for taxes that Warren and his buddies would never pay….
He also has a multimillion-dollar oceanfront vacation house in Laguna Beach that somehow gets left out of all those “just a folksy, down-home Midwestern regular guy” stories.
His personal financial situation is irrelevant. He’s the prime mover in a bank that has engaged in repeated criminal fraud.
“He’s the prime mover in a bank that has engaged in repeated criminal fraud.”
Amen to that Mike G! He’s a true a hypocrite.
Buffet has called for tax reform to penalize people like himself who make their money through capital gains rather than salary.
He publicly pointed out that his secretary is taxed at a higher rate than he is.
But he’s not in government so meanwhile he plays by the rules.
Thank you Mike,
Warren Buffet, despite his image, is among the most corrupt of the American titans. I don’t care how he spends his money, or chooses to live, but I do care about him manipulating the system to his own benefit.
…and he bought mobile “homes” manufacturer Clayton,
a while back. Translation, great vehicle to prey on the poor with a double whammy: first he sells them a depreciating POS “asset” aka “hurricane bait”, then he traps the hapless Joe Blow in a lifetime of debt slavery at usurious interest rates. What’s not to like about him being such a folksy grandpa living in the same ranch house for 50 years?
You’re completely brainwashed if you think Warren is “just like us” and eating and living like us….He may still reside in the farm house, but still has his pads all over the world and uses private jets to get there…MSM just keep this “he’s just one of us” storylines to keep the cucks from rising up and taking their money back…He’s been ripping you off if youre a WF customer, plain and simple…..You want to know where your money is, Warren’s bank account…..
——-Thats why Warren is busy bailing out insolvent lenders of last resort in Canada, because his boys arent quite done stealing everyones money….Youre right, he doesnt need the money, he needs the power which is why he acts the way he does….Wolf in sheeps clothing, stop with your stockholm syndome please…
@Nick Kelly
Yes, Buffett criticizes the current tax scenario, but BRK shareholders get no dividends – citing “tax efficiency”.
I find that a bit hypocritical.
+1.
If Warren cared so much about his unfair rate of taxation, he could buy Congress to fix it. He doesn’t.
The laziness of the average American consumer shines forth again…Wells may have “criminal minds” as management, but ultimately if one does not read and understand a contract before signing…If one does not review bank/credit card statements…If one CHOOSES irresponsible behavior as a lifestyle, there is no sympathy or empathy coming your way…Caveat Emptor…
Bank and credit card companies count on this consumer behavior.
Ever read the contract? Even the average banker reviewing it can’t explain what half of it means, let alone the average consumer.
I don’t understand why the bank is allowed to continue to maintain its charter and why Americans should provide FDIC insurance to this company. Surely it is a very high risk? Many people and companies have been prosecuted as an ongoing criminal organization for much less egregious and less harmful behavior. The failure to take significant action against this bank must be taken as a strong indication that the entire banking system is rife with criminal behavior with some of the profits flowing into the political system.
This would be a great swamp for President Trump to drain. It is such a shame that he could do so much good for the country if he actually wanted to.
Trump is one of the chief residents of that swamp, he’s never going to drain it.
Good comment….But waiting for SEC of the FBI to act is not going to happen because they have both been infiltrated by the same criminal mafia…The only way I see them getting theirs is by pulling all money out of these offender banks and even more specifically moving my assets to NON FIAT…
—————-Zerohedge released an article (7/27/17) the other day stating that the average American Household is 329,961.34 in debt according to the 41 trillion US national Debt…I dont believe that includes unfunded liabilities….Anyway, the second you change your money from FED DEBT Dollars, because each dollar is actually an IOU from them, to precious metals or something else with intrinsic value, you instantly shed that 329,000 debt…..The debt is only attached to the suckers using that specific mode of currency….Since US dollars are property of the FED, just give their mode of currency BACK to them along with all that debt that THEY MADE..
Oh they make silver and gold illegal? So what, these guys are a bunch of criminals…Are you going to take orders from a gangster???? I could care less if they make gold and solver illegal, its lasted at least 6000 years and it will continue even after these last gangster are laid to rest….
The $41 trillion in Gross National Debt must be a typo: US gross national debt is $19.8 trillion at the moment, which is near the debt ceiling Congress imposed:
https://www.treasurydirect.gov/NP/debt/current
So the gross national debt per person in the US (324 million people) = $61,000 per person.
The gross national debt per household (117 million households) = $169,000 per household.
As soon as Congress lifts the debt ceiling, the Treasury will issue a ton of new debt to pay back all the departments from which it has borrowed temporarily to stay afloat. My guess is that within a couple of days after the debt ceiling issue has been resolved, the gross national debt will jump by about $400 billion to $20.2 trillion. Just a guess.
None of these numbers include the “unfunded liabilities,” which are far,far larger.
The US debt clock.org shows debt per citizen at 208 thousand and debt per family over 800 thousand It also shows the debt to be 19 . 96 trillion
The debt clock is just an algorithm that tries to estimate the debt level on a constant basis (it moves up every second by the same amount). It gets adjusted occasionally to bring it back to reality (it was recently adjusted in a big way).
But “gross national debt” is well defined: it’s the total US Treasury securities outstanding. But it doesn’t change in a constant way every second. It goes down when the Treasury redeems bonds that mature, and it goes up when it issues new bonds.
The linked page from the Treasury department gives you three figures: the gross national debt (“Total public debt outstanding” = $19.8 trillion), less Intragovernmental Holdings (Treasuries held by government pension funds, Social Security Trust Fund, etc.) = $5.5 trillion; with the remainder being Treasuries traded in the bond market (“Debt Held by the Public”) = $14.4 trillion.
In terms of per-person or per-family, you can do your own calculations with the most current population data provided by the Census:
https://www.census.gov/quickfacts/fact/table/US/PST045216
pretty sure the $41M referred to federal, state municipal and personal debt. didn’t include corporate, for what it’s worth.
You may be on the right track: there are about $40 trillion in total bonds (not including loans, leases, and other debts) outstanding in the US but by ALL entities: Treasury, municipal, mortgage-backed securities, corporate, Federal Agency Securities (Fannie Mae, Freddie Mac, etc.), Money Markets, and asset-backed bonds.
All of them together amount to $39.6 trillion. Details (including a data spreadsheet) are here:
http://www.sifma.org/research/statistics.aspx
It’s good to read that you appear more level headed about what to expect when the debt ceiling limit is reached.
Stockman ( i like some of what he writes) has been doing a lot of arm waving on TV and elsewhere on the impending ceiling debacle.
Notably, he believes that the freedom caucus group of Republicans will hold the administration and congress over a barrel on this, thus causing the markets to tank – or as he says – “the markets are totally unprepared for this”.
Probably a storm in a tea cup, less harmful to financial markets than even the Brexit vote. We’ll see.
Anyway, markets are nosebleed and growth is anemic.. for, what feels like an eternity.
There is chance that Stockman is right. Republicans in Congress, as we see on a daily basis, can agree on very little. So they could really mess this up. But I seriously doubt it. I think they all know what a historic mess that would be. I don’t think they want to be blamed for it. I think they’ll come together at the last minute and raise the debt ceiling, as they have done every time so far.
but there are trillions in promises that previous presidents have made. maybe thats where they numbers came from. the debt will be rising faster soon enough. when is QE4?
The promises are the “unfunded liabilities,” mentioned in the last sentence above. The number is so huge, it’s better to avert your eyes — especially if you include state and municipal pension liabilities.
The $41 trillion figure was cited as both public and private debt total.
Wolf… “Debt Ceiling”… here pull my finger :)
The feds still prosecute people for violations of the 1930’s gold confiscation orders. If a financial event were severe enough and the feds determined that hoarding gold and silver was the only option for self-preservation, they would not hesitate to outlaw private ownership again then make violations of the confiscation orders a “threat to national security” (aka, terrorism). While gold and silver may last a long time outliving many governments, the average human will not.
Invest in yourself and your family first. Anything can serve as a means of exchange (aka money) so the only ‘store(s) of value’ one should ever rely upon are one’s knowledge, health, family and spirituality (if so inclined).
Taxpayers have no obligations towards FDIC payments. It’s funded by the premiums paid by banks and thrifts for insurance coverage on deposits.
So clients and shareholders of banks and thrifts bear the costs for contributing to the pool, but not taxpayers.
‘Scuse. The FDIC has pennies worth of coverage for the bank accounts it allegedly backs up. If the stuff hits the fan, it WILL be the taxpayers who make good. And as far as the TBTF banks go, well they aren’t called “banksters” for no reason.
JungleJim,
What you say may end up being true. It is true that the FDIC insurance fund only has about $80 billion in it which is about 1.2% of all insured deposits. However if any of the TBTF banks become insolvent, the FDIC has stated that they would resolve a big bank failure by creating a bridge bank, which will be solvent, and transfer all the insured deposits from the insolvent bank into the newly created bridge bank. This will protect insured depositors and allow customers to continue to do business as usual. Because the deposits are now in a solvent bank, the FDIC insurance fund will not even touched, at least not right away. The FDIC also has a line of credit with the Treasury and has other means to raise money if they need to.
As far as uninsured deposits they too will be transferred to the bridge bank but some may have to be used in a bail-in if needed to help capitalize the bridge bank.
I think you are correct however to say that the taxpayer may end up paying again for it. I believe that they will try to keep the TBTF banks from officially becoming insolvent and that a secret bailout could take place before any bail-in involving uninsured depositors would happen.
The stuff hit the fan big time during the Financial Crisis. And FDIC-insured depositors? Didn’t lose a dime.
Uh… Wolf, re: the stuff hitting the fan. It was prevented from hitting the fan. Wasn’t that what the Great Financial Bailout was all about, preventing the banking system from collapsing which would have obviously bankrupted the FDIC?
The stuff BEGAN to hit the fan with Lehman, then his economic advisers convinced Bush, in his words ‘that this sucker could go down’ and this began the unprecedented, massive injection of liquidity by the Fed.
A recurrent criticism of the Fed is that it should have let the chips fall where they might, but no one knows what the result would have been.
The best short look into the abyss I’ve read is Vanity Fair’s piece: The Week Goldman Almost Died, when banks stopped lending to each other, let alone to business.
Nick Kelly,
There’s a difference in my mind:
1. The Fed stepped in as lender of last resort and prevented credit from totally freezing up. It had numerous programs to do this. This was completely separate from QE. Most of the amounts are still secret. These were short-term loans that have been repaid long ago. GE, IBM, Deere… they all got these loans because they couldn’t borrow anymore in the markets to fill their short-term needs, such as payroll. The whole thing was massive but lasted only a relatively short time. This also kept the banks from collapsing.
2. The Fed also cut rates to near zero and started QE to create the wealth effect.
Imho, #1 was legitimate and necessary. The Fed acted as lender of last resort. That’s one of its primary roles. This includes bailing out the government if push comes to shove.
But #2 was not legitimate. It ruined the real economy. It transferred enormous amounts of wealth. It crushed the value of the dollar earned by labor to buy assets with – or pay for housing in whatever form … not to speak of the savers, etc.
So when I vituperate the Fed, it’s because of the second item (QE, ZIRP). It was unnecessary and destructive. The first item (lender of last resort) was necessary and legit.
Anyone who’s been paying attention since 2008 knows we’ve reached end-state rapacious capitalism. The banksters own the Republicrat duopoly as well as the regulators, enforcers, judiciary, and media, so who exactly is going to hold them accountable for their frauds and swindles?
One law for thee and one law for me.
The nobility only answers to its peers.
Lender of Last Resort… Right…. b/c the bondholders and creditors deserved to get bailed out and BTW, who needs prudent corporate governance? The Fed is stuck, it has been doubling down – again, just as LTCM did. The FED should not even exist let alone be praised for rigging markets.
It is curious that the 5 biggest criminal banks never get fingered in the any of the main-stream news or by the Courts or Congress yet anyone in the industry knows they are doing even worse things to their customers and the nation. I suspect there is a deliberate operation ongoing to take down Wells so the jackals can divy the carcass.
http://wallstreetonparade.com/2017/07/financial-system-of-u-s-rests-on-health-of-just-five-mega-banks/
According to data from the Office of the Comptroller of the Currency (OCC), those same bank holding companies as of March 31, 2017 were sitting on astronomical levels of derivatives: in notional (face amount) of derivatives, Citigroup held $54.8 trillion; JPMorgan Chase held $48.6 trillion; Goldman Sachs Group had $45.6 trillion; Bank of America held $35.8 trillion while Morgan Stanley sat on $30.8 trillion. Graphs in the OCC report show that the top 25 bank holding companies held a total of $242.3 trillion in notional derivatives at the end of the first quarter of 2017, of which these five bank holding companies accounted for 89 percent of that amount.
It started with LTCM ( Long Term Capital Management) and actually before with Solomon Brothers ( look up uncle Warrens employment history while you are at it). Once the Fed bailed out LTCM, every one who understood what that meant had there mouths open. Nothing would be allowed to fail again.
It opened the door to the 1999 Gramm Rudman act, which Bill Clinton signed into law, so the banks commercial and non commercial interests could combine. Remember all the banks consolidation about that time….yumm. The commercial banks even bought S&Ls, which are gone forever, and those assets are now ‘in-play’.
Wells will take down themselves, no additional help needed. But, who can take down Wells? Only the depositors and customers can do that, but they won’t….Warren knows human nature.
When I went to upgrade my data plan, the guy at the Verizon store asked me if I wanted to keep the $9 per month insurance policy I didn’t know I had, and never agreed to. If any enterprising lawyer is looking for a lucrative class action suit, he may want to look at Verizon’s billing practices too. From now on I’m going to check every utility bill – they’re all thieves in corporate clothing.
With all these companies, you have to count your fingers after you shake their hand.
Nicely put.
Shortly, I have to talk to my bank about something substantive. I expect to be hustled by a sales-sociopath. I was informed earlier that this person was impossible to offend, yet works in a position where sales was necessary for them to earn a decent living. I need info and support about the no-cost / no income to them part of their area. I explained the issues we may encounter to my wife – who will do the talking. Even so, I am dreading the talk. She has the tact and patience I apparently missed at birth.
The tellers at my credit union, are are decent enough people, are clearly under pressure to try to get customers to sign up for credit cards or have one of the credit union’s “financial advisors” go over their “investment strategy” with them. I am polite to the tellers – they’re only doing what they’re forced to do if they want to stay employed – but tell them in no uncertain terms that our financial system is so riddled with fraud and misrepresentation that I have no intention of turning my hard-earned money over to grifters who will try to fleece me.
ya know, i’m startin’ to feel that way. it’s like they chisel as a rule, and employees either go along or get along. and a class action is a 15% gratuity on the free lunch they ate while spraying it all over you.
because the alternative is AI.
try calling verizon on the phone……..
Don’t worry. Any issues will be bailed out by Uncle Warren.
It’s the new banking paradigm. Short term money is made on fees, commissions, financial products, add on’s and paper selling . Oh and don’t forget their prop desk . Holding long term paper to profit from credit spreads is passe.
Took me 30 minutes to close a BOA account . The teller directed me to the manager offices where i was held hostage and would only close the account after I heard a sales pitch on their product line offerings . Use a well capitalized credit union , much better value.
No worries J. Yellen is looking into it.
http://www.newsmax.com/TheWire/janet-yellen-wells-fargo-investigation-enforcement/2017/07/14/id/801616/
Maybe she is batman.
Totally agree. Switch to a credit union. Much lower fees and better loan rates.
Or to a small local or regional bank. The credit unions in my neck of the woods are trying to act as “big banklike” as they can. “Credit union” is not a magic word, unfortunately.
WFC employed about 268,000 people in 2016 and had over $1.2 trillion in customer deposits. I think the Feds learned from the Arthur Anderson debacle to avoid shutting down a major institution because of all the collateral damage it would cause. Most bank employees are not wealthy bankers. But I wouldn’t mind seeing a few senior bank executives convicted of something and sent to prison for a few years every time one of these scandals comes to light.
Sending Bank Exectuives to jail for crimes that would put the average Joe behind bars only happens in Iceland.
Iceland has jailed 29 bankers = http://www.huffingtonpost.com/stefan-simanowitz/iceland-has-jailed-29-bankers_b_8908536.html
Now that I think about it….they may execute a banker in China if caught.
http://www.businessinsider.com/chinese-white-collar-criminals-death-sentence-2013-7
But I wouldn’t mind seeing a few senior bank executives convicted of something and sent to prison for a few years every time one of these scandals comes to light.
Dream on. Got to open secrets dot org and see which financial firm(s) owns “your” elected officials, as well as the likes of Eric Holder, Loretta Lynch, and Jeff Sessions.
Just doing the math here: 20,000 people (the more conservative number from the WF press relaease) had their car repossesed in part due to the unauthorized CPI. And WF is allocating $16M to that group!? That’s it? 16,000,000/20,000 = $800! Did someone leave out a zero or two? $800 for losing your car and, presumably, having your credit seriously damaged, not to mention job loss/missed shifts, is a joke. Then WF had the audacity to say the payments are in excess of the financial harm “as an expression of our regret”! Worse, I suspect most of these repo victims are on the lower rungs of the economic ladder, since the CPI premiums were sufficient to push them off the fiscal cliff. This would imply a disproportionate number of them lacked benefits such as paid leave they could rely on while they worked out alternate means of transportation. This wasn’t rich people making a dirty buck off rich people: this was a reverse Robin Hood! 10:1 there won’t be a single prosecution for this, except maybe some low level managers or employees.
This can’t be the only bank fucking peoplease over like this. Still how much more bad press can they take without some kind of major shake up?
And not to out do itself to pee off its customers, WF recently gave me a roll of coin wrappers so I could count my own change after emptying the piggybank. Seems they’ve removed the public coin counters for customers and anyone entering the bank. They said they weren’t making any money off the machines, the machines were inaccurate and here are your wrappers.
Pieman – And on the other hand, they’ve got the occasional OCD type complaining and taking up a half-hour complaining because the machines are off by one coin, yadda yadda.
So now you have to count ’em yourself or use Coinstar.
Former CEO of Wells Fargo Richard Kovacevich to Hank Paulson (cca 2007): “I don’t want this money (TARP), I don’t need it”.
Paulson: Do you want your regulator to declare your bank non-compliant?
They had to get rid of this guy, probably too honest.
“They had to get rid of this guy, probably too honest”
Max/Min,
I think you may have missed something. The Fed was not “giving” them anything…the banks had to pay interest on the money received from the Fed…something in excess of 3%, as I recall. The object of the banks being forced to take the money was that they would be forced to lend that money in the economy or eat the interest. Liquidity on main street was, at the time, the issue.
My memory might be stale, but TARP was meant to buy toxic securities off the banks to give them a cash cushion. It did not do the trick. In the second attempt, the government partly force-nationalized the banks by taking stakes in them. The goal was to revive inter-bank lending which ground to a halt.
Max,
Yes, that was the ostensible reason…and banks who needed the toxic assets gone did not refuse the money….
I was a customer at WF for about 18 years. I ended up there after they bought a regional bank where I had an account and I didn’t hassle to move my money. I moved my money out after the last scandal even though I was never personally affected and they seemed pretty decent for at least some of my time with them. It’s too bad they’ve done this to themselves since I’m not sure they’ve always been so bad.
I know of some others who’ve also moved their money, but unfortunately I suspect that the same people who don’t look at bills or understand the fees they’re bring charged probably don’t read or hear financial news, either. Maybe they’ll get a check but not understand much of what happened with that or why they got it, either.
Who is going to protect the little guys? Certainly not the bankers. Some of the government is being co-opted by the bankers and while there are some people in government who’d like to do more, they seem to have as much power as a kid carrying a bb gun to an automatic weapons fight. Oh, and they’ll probably downgraded to carrying a squirt gun if or eliminated if current trends continue.
In modern day America absolutely NOBODY in any position of power, wealth or influence is ever held accountable for anything or accountable to the Rule of Law. The Rule of Law and personal accountability only applies to everyone else. So, tell me, why should anyone have any respect for the law?
The banking gangsters are ALWAYS repeat offenders. Any fines levied on the rare occasions when they get caughtare merely considered to be the costs of doing business to be paid by the hapless shareholders.
My question is: When are the depositors going to wake up anow close their accounts and find another bank? Congress will only do a smoke and mirrors effort and then go backing to sucking off the Banksters for campaign contributions!!!
Your 100% right. Im moving my account this week. They are like a third world chop shop. I go to my local branch monthly to cash a check and its always, i see you have a large balance in your checking account would you like to talk to a investment professional. Screw them.
So, when the SEC or whichever alphabet federal agency says that Wells Fargo did wrong and fines them, we can be assured that the government not only condones the crimes, it encourages them.
You guys think California has it bad? Spain and Italy are rightly infamous for a lot of companies pulling up shit like this. It has got so bad they could be considered third world countries.
And this isn’t liberalism, this was an outright scam of charging people for services they didn’t sign for.
This calls for another slap-on-the-wrist fine and insincere show of contrition by the CEO, while “our” captured regulators and enforcers go back to watching porn and shopping their resumes around to the financial firms they’re supposed to be overseeing.
Wells Fargo was also in the news recently for not paying its corporate taxes. I think they have cultural problems that go way back.
Also, I did a search for the top 10 most profitable S&P companies. Three of the 10 were banks – JP Morgan, Wells, and Citi. JP Morgan is #2, just behind Apple. I find this astounding. What value do banks really add?
Time to rethink the role of banking.
sold my wells stock and let warren deal with it.
perhaps a better way will be found to aggregate and place savings, but not just yet.
I´m amazed at the lack of sophistication in Wolf´s commentariat. All this talk about “bailing out the government” and the like shows a complete ignorance of Modern Monetary Theory. Put simply, no government that issues its own currency CAN EVER GO BANKRUPT! You all have a lot of reading to do. Maybe take a look at Naked Capitalism – which, by the way, has the most sophisticated commentariat on the Internet.
Also, the obvious gold-bug spouting stuff about “intrinsic value” in reference to precious metals is just whistling the old PR campaign that gold and silver have been using forever. They have very little intrinsic value. The only REAL measure of their current value is found in the daily trading figures. That´s it! The gold standard, by the way, was in full force leading up to the GREAT DEPRESSION.
– Wells Fargo is embroiled in another (ripping off) scandal:
https://theintercept.com/2017/08/12/theres-a-new-wells-fargo-scandal-this-time-its-the-trucoat/