Wells Fargo Gets Clocked in California

Why is Tim Sloan still CEO, asks California Treasurer.

In a letter so brutally scathing it’s practically funny, California Treasurer John Chiang skewers Wells Fargo, its Board of Directors, and its new CEO Tim Sloan. And he extended the sanctions on Wells Fargo, first imposed in September last year, by “at least” another year.

The Treasurer’s office oversees “nearly $2 trillion in annual banking transactions, manages a $75 billion investment pool, and is the nation’s largest issuer of municipal debt,” Chiang pointed out last year when he imposed the sanctions on Wells Fargo’s “most highly profitable business relationships with the State of California.” Those sanctions include:

  • Suspension of investments by the Treasurer’s Office in all Wells Fargo securities.
  • Suspension of the use of Wells Fargo as a broker-dealer for purchasing of investments by his office.
  • Suspension of Wells Fargo as a managing underwriter on negotiated sales of California state bonds where the Treasurer appoints the underwriter.

With these sanctions, Chiang sought “real accountability and lasting reforms.” But it’s a long and complex relationship that dates back to the Gold Rush era:

Wells Fargo has evolved to become the nation’s second largest bank by total assets. California is set to become the world’s fifth largest economy. What we each do, therefore, matters and effects the public interest.

The sanctions were first triggered by revelations last year that Wells Fargo “had fleeced its own customers by opening millions of bogus accounts” which “raised concerns about the bank’s culture, leadership, and loyalties.” The sanctions were aimed “to spur” the leadership to answer this question:

“Could Wells Fargo identify and eradicate the root causes of this widespread and recalcitrant culture of customer abuse and restore public trust?”

Wells Fargo did accomplish a few things Chiang had demanded, including:

  • Separating the CEO and the chairman into two positions
  • Three of the board members “at the helm” at the time of the “bogus accounts scam and other abuses” have departed or will soon.
  • Key executives were fired and “there have been claw-backs of executive compensation across the company.”
  • Incentives for cross-selling having been eliminated.



But now there has been “a string of new disclosures about bad practices at the bank,” a veritable “infestation of problems” that “have come scurrying out of dark corners within Wells Fargo,” among them:

  • The number of phony accounts has ballooned from an initial 2 million to now 3.5 million.
  • This past July, news broke that as many as 800,000 consumers were forced by the bank to buy “lender -based” car insurance they did not need, tipping a quarter of a million Wells Fargo customers into delinquency and triggering 25,000 vehicle repossessions.
  • In August, a new and different auto insurance fraud scandal broke in which the bank is being accused of failing to make refunds to consumers who paid off their loans early.
  • Also in August, Wells Fargo agreed to pay $108 million to settle a lawsuit claiming it overcharged military veterans under a federal mortgage refinancing program.

As revelations like these are recurring “with such regularity,” Americans could “become de-sensitized to the bank’s pervasive exploitation of the public’s trust.” He added, “It concerns me when systemic fraud and abusive banking practices are broadly viewed as the new normal.”

The bank’s “reluctance to hang a lantern over past and present mistakes undercuts claims of repentance and meaningful reform.” He listed three examples of what Wells Fargo failed to do:

  • Provide my office with evidence that it is complying with the terms and conditions of consent orders and settlements with the Comptroller of the Currency, the Consumer Financial Protection Bureau, and the Los Angeles City Attorney.
  • Deliver information I requested regarding the number of California consumers actually harmed, the concentration of those Californians by branch location, zip code, or city, and the status of your efforts to resolve their grievances and make them whole.
  • Permit victims to have their day in court, where an independent judge or jury could view evidence and hear testimony. Instead, [Wells Fargo chose to] re-route them to forced arbitration, a secretive process that tilts in favor of corporations.

Chiang had harsh words for forced arbitration: “Note that by silencing victims and allowing the bank’s abusive practices to fly below the public’s radar, this opaque process fostered a culture of exploitation and enable it to metastasize.”

In April, he’d called for the dismissal of seven board members who were “missing in action as the parade of scandals took form on their watch.” They include all five on the Corporate Responsibility Committee.

“Absent their neglect or – worse yet – willful encouragement, the systemic corruption and venal abuse of customers that has now become a part of Wells Fargo’s brand would not have occurred,” he said.

Those seven board members bear responsibility. But to date, “four remain.”

“The bunker mentality in defending negligent leaders, the opaque manner with which the bank continues to do business, and the frequency of new disclosures of wanton greed and lack of institutional control have made this decision so clear that there really was no choice,” he said. Hence, thee extension of the sanctions for “at least” one more year.

Then he went after his ultimate scalp, CEO Tim Sloan, a Wells Fargo lifer, who was promoted to CEO after John Stumpf was forced out a year ago. Chiang mused “whether Mr. Sloan’s three-decade tenure within Wells Fargo would allow him to be the change-agent leader Wells Fargo so desperately needs.”

The Treasurer of California has limited tools to deal with the bank: He can choose not to do business with it, and he can get on the bully pulpit. That’s about it. Chiang is now running for governor. So these Wells Fargo scandals came at a perfect time. But ultimately, it’s irrelevant why he’s hounding Wells Fargo. What matters is that he is hounding it with the limited tools he has since the bank regulators – particularly the Fed, under whose watch all this has been going on for years – have barely wagged a finger.

Oh the irony! Read…  Wells Fargo’s Artificial Intelligence Defies Analysts, Slaps “Sell” on Google and Facebook




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  65 comments for “Wells Fargo Gets Clocked in California

  1. JungleJim
    Oct 17, 2017 at 9:03 pm

    Nu, what am I gonna say, the Fed was too busy looking for inflation……

    Seriously, the problem isn’t just Wells, it is the Fed itself. Any analysis of the banks relationship with the Fed would be pornographic. The Fed needs to be reconstituted from top to bottom. They should be public servants not shills in a Three Card Monte set up which IS what they are now

    • Oct 18, 2017 at 11:38 am

      I don’t believe WF is a Charter Bank, but they certainly deserve that status

    • chip javert
      Oct 18, 2017 at 4:11 pm

      JungleJim

      Good rant, but Wells Fargo’s primary Federal regulator is the OCC.

      However, all US banks have at least some relationship with the Fed.

      Buffet (I own BRK stock) has been disturbingly silent on this major BRK investment.

  2. IdahoPotato
    Oct 17, 2017 at 9:28 pm

    And goes Wells Fargo again. Again.

    http://money.cnn.com/2017/10/16/investing/wells-fargo-advisors-fined-volatility-finra/index.html

    Also, did you know they have the crappiest brokerage platform? I have several accounts with them. The only reason I have them is that the branch is close to my house and allows me a free safe deposit box. Time to close my accounts. I’ll forfeit the deposit box.

    • Frederick
      Oct 18, 2017 at 11:10 am

      The question you have to ask yourself is who in their right mind would entrust their valuables to a safe deposit box with this criminal bank? Or even who would do any business with them at all

  3. Mike G
    Oct 17, 2017 at 9:30 pm

    Good to see at least one branch of government going after corporate criminal garbage.

  4. Panamabob
    Oct 17, 2017 at 10:13 pm

    A great story that probably some Californians know about, the rest are too busy “Making California Great”. The rest of the Nation for sure is clueless.
    After ten years efforts of people like Bill Black, Elizabeth Warren, etc, the folks residing in America are in a coma.
    The natives are restless, both Political Parties are very challenged but the electorate are operating on gut instincts, and mostly in the dark with the details. Wake up Americans

    • Oct 18, 2017 at 12:44 pm

      I don’t get it either. Americans are too lazy even to complain. Even moving your WF account to a credit union is too hard, too confusing, insert excuse here.

      I’m not sure if it’s a matter of having been systematically cheapened since 1980, or some deeper American quality. Not sure it matters now.

  5. Mugsy
    Oct 17, 2017 at 11:20 pm

    I read that in Mexico if you desperately write a bad check , get arrested, you go to jail…..probably for months because you can’t make bail…hey, can’t take the time, don’t do the crime….unless you’re a banker stealing millions and paying lobbyists to bribe politicians…..then you not only keep your job, but get millions in bonuses to pay your lawyers and stash the rest in Panama….oh wait a minute….that’s in the U.S. I get all the third world countries confused these days….Berkshire-Hathaway knows swamp value when he sees it.

    • David G LA
      Oct 18, 2017 at 9:58 am

      Right on. Hilarious – “I get all the third world counties confused”

    • john
      Oct 18, 2017 at 10:16 am

      Very funny!!!

    • Bruce Adlam
      Oct 18, 2017 at 4:01 pm

      Its not just the US it’s every where you look .The fed and central bankers are all in it together they go to there lavish retreats at the tax payers expense and plan how they can line the pockets of the elite few and screw everyone else and make the crime legal and get away with it

  6. Si
    Oct 18, 2017 at 1:36 am

    I think WF are pushing the customer abuse model like Ryanair are doing over here in the UK. I think the premise is that ‘no matter how much we mistreat our customers to increase the amount we can skim they keep coming back for more’.

    You know what? Its working too. A few bad press headlines here and there but no mass customer exodus. Classic abusive relationship where the victim doesnt believe they have any power.

    • MC
      Oct 18, 2017 at 11:27 am

      A quick glance at FlightRadar24 or similar websites will reveal at any given moment scores of low-cost carriers operative over Europe, from the wholly owned subsdiaries of big airline groups (HOP!, Brit Air, Transavia etc) to the startups created by the present low-interest environment (SunExpress, SmartWings, Vueling etc). Ryanair benefited from deregulation of the airline industry (as did passengers), but they have to pay a price in form of extremely stiff competition: their own name and size does not protect them from competition, as those shopping for a budget airline ticket tend to only have final price in mind and have no brand loyalty.
      Budget airline customers generally know the maxim “you get what you pay for” holds true and know they aren’t flying First Class with Cathay Pacific or KLM.

      Differently from Ryanair, Wells-Fargo didn’t have to pay for the benefits they received from deregulation in form of stiffer competition. There are no startups trying to take their customers, just the same old banking cartel.
      While airlines have to walk a thin path (too many incidents and their licenses get suspended), banks such as Wells-Fargo can get away with pretty much everything: they just pay a fine (see the servicemen mortgage lawsuit) and off they go. Their licenses never get suspended and definetely nobody is subpoena’d in front of a court to be asked very embarrassing questions such as “Who gave this order?”.

      • chip javert
        Oct 18, 2017 at 4:23 pm

        Wells Fargo corporate culture did not used to be like what we’re seeing today.

        NorWest Bank bought the old Wells Fargo bank in 1998, ditched the “NorWest” name to assume the Wells Fargo name, moved corporate HQ from Min/Wis (some place cold) to San Francisco, and then proceeded to fire most of the legacy Wells Fargo managers.

        I worked at WFB in San Francisco in the late 1970’s; it’s painful to see this new & corrupt culture.

  7. michael Engel
    Oct 18, 2017 at 2:07 am

    The so crooked west coast. Even their high rise buildings are crooked.
    Some people, west of the west coast, claim that the top 1% own
    90% of all assets. Is it true ?
    Further west, they claim that since interest rates are zero, the Fed
    and the BOJ helped the pension funds, by boosting stock prices + bonds assets value, despite the zero rates complains. That enabled the pension funds grow by an annual rates of 7% to 8%, so they can pay the baby boomers when they retire.
    ==> these two statements contradict each other. If the pension
    funds hold a lot of assets that belong to the middle class, the top 1%
    don’t own 90% of all assets.
    And one more fallacy, or fantasy : when the economy will turn down and enter a recession, the baby boomers will be naked of assets, just like day they had been born.

  8. Rates
    Oct 18, 2017 at 2:35 am

    Isn’t it obvious?

    Because Buffett says so.

    When a “True American Capitalist” speaks, you pay attention.

    Maybe Buffett is just waiting to be called in to clean up the place just like his stint with Salomon Brothers. No doubt, before that he will enter into some kind of warrants deal (special available to Buffett) which will rocket in value once he becomes CEO.

    Capitalism at work everyone. It’s so good, you can’t have it.

    • chip javert
      Oct 18, 2017 at 4:44 pm

      Rates

      Hard to understand all your wimping & sniffing about Buffet,

      If he could be “called in to clean up the place”, he’d be worth what ever financial deal he strikes.

      BTW, proceeds of these deals (Solomon, BofA, etc) go to BRK (not Buffet), and you can, indeed, share it: just buy some BRK stock. I strongly support Buffet driving highly lucrative deals to fix other people’s mess.

      For the time-being, I’ll assume you have not offered to donate your management services to Wells Fargo to clean up the mess…

      • Kraig
        Oct 21, 2017 at 2:14 am

        Hey chip.
        Odd, I read rates’ post as a positive hope that buffet is positioning himself for a hostile (to toxic management) takeover and clean out of the current wf to add value to the current shareholders based on historical observations of buffet.

        Odd how the same statement can seem wimping and sniffing. Makes me wonder if I can buy BRK stock over this side of the pond.

  9. raxadian
    Oct 18, 2017 at 2:46 am

    Well, any in deep article that summarises all the scams Wells Fargo has done to it’s customers?

  10. unit472
    Oct 18, 2017 at 3:20 am

    I remember when Barclay’s Bob Diamond was able to plead ignorance when his bank was caught up in the Libor fixing scandal. That seems to be the standard excuse for all these mega bank CEO’s when their companies are caught up in some nefarious activity. They just didn’t know ( or want to know) what was going on on the 8th floor of their 50 floor skyscraper.

    Well if their bank is too goddamned big for them to know what is going isn’t that evidence they should be broken up into smaller entities where the CEO can know what his underlings are doing?

    • James Levy
      Oct 18, 2017 at 10:12 am

      Worse, it undermines their claims to vast compensation yet no one points this out. If they don’t know what their bank is doing, then why the hell should they be paid millions? And if they do, why aren’t they in jail? Seems pretty obvious to me, but no one dares mention it.

  11. d
    Oct 18, 2017 at 3:32 am

    This is one of these deals that can only continue in the land of legalised corporate fraud in most other countries outside russia and china wells would have been placed in statutory management as a criminal enterprise. Long ago.

    • chip javert
      Oct 18, 2017 at 4:48 pm

      d

      Like, for example, what country has a history of doing what you call “statutory management as a criminal enterprise”?

      • d
        Oct 18, 2017 at 8:12 pm

        New Zealand and to some extent Australia among others, it is a provision in their asset forfeiture and anti organized crime laws.

        Other nations have similar. I Belize Japan has a Provision for this in its anti organized crime statutes.

        They dont however get used enough.

        Most nations can, if they want to, replace a board and senior management, by court order.

        Few use the legislation available to do so.

        Low life in High places Etc.

        • chip javert
          Oct 19, 2017 at 10:25 pm

          Saying some countries have laws is very different than saying they actually use them (USA has laws) , which is explicitly what you claimed (“…Wells would have been placed in statutory management as a criminal enterprise. Long ago…). US regulators also have ability to replace bank board & senior management.

        • d
          Oct 19, 2017 at 11:41 pm

          Unlike teh US other countries do us ethri laws just not often enough.

          There again our banks arent like many US ones criminal enterprises masquerading as bank’s.

  12. marco
    Oct 18, 2017 at 5:51 am

    Banks, Wall Street (and the rich that own them) are not subject to the “laws” the rest of us have to obey.

    Our country is a totalitarian oligarchy. We do not have free markets, or capitalism. We are ruled by The War Party of The Rich- the Pelosis and McCains and their multi-millionaire friends.

    Chiang is straight War Party too … just wait till he’s governor… you’ll see.

    • John
      Oct 18, 2017 at 8:13 am

      Exactly. Until the handcuffs go on some CEO’s its all talk. And the way its rigged that would take a total economic collapse beforehand.

    • two beers
      Oct 18, 2017 at 12:19 pm

      I agree we don’t have free markets. But then, “free markets” is a theoretical concept, like zero-point energy, that doesn’t actually exist in the real world. _All_ markets are subject to various explicit and implicit conditions, rendering “free” both a definition-less misnomer and a chimera.

      And how can you say we don’t have capitalism? This is exactly what capitalism, unless you have created your own definition for your own purposes. What we have is exactly the predicted end result of unrestrained capitalism — the concentration of capital in fewer hands, the increasing frequency and level of volatility, the immiseration of workers.

      We live in capitalism unbounded. I’m sorry if the results don’t please you, but this is where we are. If you hold the Austrian faith in unrestrained capitalism as the savior of economics, then embrace it and own it, for this is what you get.

      • chip javert
        Oct 18, 2017 at 4:57 pm

        two beers

        You’re nuts if you think capitalism is the only financial system to suffer from the all-too-human conditions of greed & corruption.

        Where does this fantasy Island of “unrestrained capitalism”, or any unrestrained financial system exist? No where & never has.

        • two beers
          Oct 18, 2017 at 5:59 pm

          That “fantasy island” of unrestrained capital is an obscure place called the United States, where oligopolies and monopolies do whatever they want with impunity.

          Or are you of a mind with the hedgies who think the US is full of commies, and the problem is that we don’t have _enough_ concentration of wealth already?

        • chip Javert
          Oct 18, 2017 at 10:01 pm

          two beers

          You must be using a standard of perfection, which of course the USA (and everybody else) fails to meet. This comparison is naive at best.

          Compare the USA financial system to others in the real world – which, in your opinion, comes out better? Where is this mythical “better financial system”?

          China?
          Russia?
          India?
          Spain?
          Italy?
          Egypt?
          Anybody in Africa?
          Anybody in central/South America?
          Iran?

        • two beers
          Oct 18, 2017 at 11:08 pm

          What are you talking about, chip? I responded to Marco that I thought he was correct we don’t have a free market economy (but that, in fact, _nobody_ has a free market economy), but that he was incorrect about us not being a capitalist economy, because we are in fact a hyper-capitalist economy. Capitalism has inherent predicted problems when the wielders of capital are not kept in check.

          You respond with basic logical fallacy 101 that because there are other economies worse than ours,people shouldn’t complain.

      • d
        Oct 18, 2017 at 7:57 pm

        “We live in capitalism unbounded. I’m sorry if the results don’t please you, but this is where we are. If you hold the Austrian faith in unrestrained capitalism as the savior of economics, then embrace it and own it, for this is what you get.”

        NO we dont.

        What we have is Corrupt crony capitalism aided by inconsistent beggar they Neighbour regulations in different Nation States.

        Abused by china and its globalised vampire corporate allies. For their gain at everybody elses expense.

        Globalised Capitalism can not work, for any but the crony abusers, and nations like china, with out 1 globalised rule book.

        TPP. Was/Is the beginning of that, which is why the US walked, as it violated the US principle of “1 rule for us, and more stringent rules for them.”

        The US is, and will continue to, pay for that.

        • two beers
          Oct 19, 2017 at 11:20 am

          You’re contradicting yourself. Crony and global capitalism flourish in unregulated capitalism, but your answer is to deregulate them even more? In what magic world does letting criminals act with impunity result in less crime?

          I suggest you play the boardgame Monopoly if you want to learn how the world works.

  13. marco
    Oct 18, 2017 at 5:59 am

    P.S. Elizabeth Warren is also War Party Of The Rich. She and her AMA hubbie are above $10,000,000 in net worth. I believe they own four, or maybe five luxury homes.

    Bernie Sanders, and his wife who’s under real estate fraud investigation,
    just inherited their third or fourth home, about $600,000 in value. Bernie had over $1,000,000 declared income in 2016.

    All War Party, whether they’re Demopublican or Republicrat.

    • Lindsay Berge
      Oct 18, 2017 at 6:27 am

      “The popular Independent who was further catapulted into the spotlight during his 2016 bid for the Democratic presidential nomination made more than $1 million last year, according to his most recent U.S. Senate financial disclosure released Sunday. The majority of his income came from book royalties, most notably a $795,000 advance for his recently published “Our Revolution.” Released a week after President Donald Trump was elected in November, the book quickly became a best-seller.”

      “His 2014 tax returns revealed that he and Jane made $205,617 that year, the bulk of which came from Sanders’s $174,000 Senate salary. (Jane, who previously made about $160,000 a year as the president of Burlington College, retired in 2011.) ”

      So he wrote a successful book and made money. And bought a $600,000 summer home after working into his 70’s as a Federal Senator. Other houses also in Vermont (where he resides and which he represents) and Washington DC (where he works). Prosperous but hardly a plutocrat.

      • Terry
        Oct 18, 2017 at 2:36 pm

        Keep telling yourself that. i know he just cares about (what he can get from) the little people.

  14. Mike R.
    Oct 18, 2017 at 7:51 am

    I suspect this guy running for governor has something to do with his public condemnation.

    The big banks are just a sliver of the host of large businesses that have lost their ethics and customer focus. It is pervasive across the board. Much of it “legal” but very slimy.

    • Dan Romig
      Oct 18, 2017 at 10:29 am

      Case in point is Allergen, which unfortunately, I have a few shares of.

      On Monday, a federal judge, William Bryson, invalidated Allergan’s Restasis patents. Restasis is a $1.5 billion dry-eye medicine.

      “In a deal announced last month, Allergen transferred the Restasis patents to New York state’s Saint Regis Mohawk Tribe, claiming the group’s status as a sovereign nation meant the patent could not be reviewed the U.S. patent office. Bryson expressed concerns about the legitimacy of the tribal transfer, calling it a ploy by Allergen to “rent” the tribe’s sovereign immunity.”

      On 18 July, AGN hit $255 per share. As I type, it is under $190. Any chance there’ll be a shake-up on the Board, or with the CEO and/or COO? I doubt it, but if there is I would bet that these scheming Mother F-ers will walk away with a hell of a payout.

  15. Gershon
    Oct 18, 2017 at 8:02 am

    Regulators, enforcers, both political parties, and the judiciary have all been comprehensively captured by Wall Street and the investment banks. There is literally no one in any position of authority looking out for the public interest. Senators like Elizabeth Warren bloviate and posture, pretending to be champions of the middle class, but her rush to block a real audit of the Fed – the most corrupt and pernicious banking institution of all – showed her true colors.

    We the People are so screwed.

    • Oct 18, 2017 at 12:53 pm

      Bingo.

    • Enrique Bermudez
      Oct 18, 2017 at 7:31 pm

      All of these politicians are repulsive and 100% of what 100% of them say is merely branding. Warren’s brand is what it is but you can absolutely guarantee that a government headed by President Warren would offer up endless war and neoliberal “economics” just as all the rest of them did/do/will.

      I can’t remember the last time I actually believed in anything promised by any of them but it was a long time ago.

  16. Petunia
    Oct 18, 2017 at 8:31 am

    The SIFI designation of too big too fail is what has allowed all this criminality to go unpunished. The banks know they will not be closed down and any arrests will cause a run on the bank. The too big to fail and jail designation is the problem. Break them all up.

    BTW, who is California using now that they have withdrawn from WF. I hope it isn’t Bank of America or Citibank. I would wager that California has done nothing to help smaller community banks by giving them more business.

    • Anon1970
      Oct 18, 2017 at 8:36 am

      There aren’t many large banks left in the US. My guess is that they are now using Bank of America.

      • Petunia
        Oct 18, 2017 at 8:47 am

        CA doesn’t have to only use a large bank. They can split up their business and make some local banks larger by simply being a customer. This would have the added benefit of giving the state of CA more regulatory oversight over the banks they use.

        All the states should be doing this instead of complaining about the regulators. They could be the regulators.

    • Oct 18, 2017 at 8:45 am

      Yes, that’s exactly the problem. A state the size of California cannot use the local credit union to do its business. So it’ll use other megabanks and broker-dealers, and they might not be a lot better than Wells Fargo.

      The good thing is that it does take a (small) bite out of WF’s earnings.

      • steelhead
        Oct 18, 2017 at 11:44 am

        What about a state owned bank like North Dakota? I recall that Ellen Brown has been pushing that concept for a very long time.

        • Oct 18, 2017 at 1:16 pm

          State-owned banks are a breeding ground for corruption followed by taxpayer-funded bailouts, even in places like Austria and Germany (Landesbanken). They have a huge mess on their hands. You do NOT want politicians to decide how and to whom a bank lends its money.

        • Lee
          Oct 18, 2017 at 11:02 pm

          FYI the Bank of North Dakota is and has been one of the best run banks in the USA.

          It made the first Federally insured student loan way back in 1967 and last year made a profit of around US$136 million.

          http://www.motherjones.com/politics/2009/03/how-nations-only-state-owned-bank-became-envy-wall-street/

          Go Bison!!

          Go Fighting Sioux – PC BS be damned!!

      • Oct 18, 2017 at 12:55 pm

        Couldn’t they start a state bank, like North Dakota? I mean, if one state can do it, can’t the others? Seems like that would be a significant shot across the crooks’ bow.

      • George McDuffee
        Oct 18, 2017 at 1:22 pm

        While “banks,” even TBTF “banks.” may indeed now be necessary for the operation of our economy as it is presently structured [by the banksters], any particular bank and/or its banksters is not.

        A major part of the “problem” appears to be the fragmentation of “banking” supervision/oversight among at least three Federal agencies, namely the Federal Reserve, the Comptroller of the Currency, and the Federal Insurance Deposit Insurance Corporation. It should be noted that two of the three are nominally private, or at least non-governmental, corporations. There is also the problem of the largely unregulated “shadow banks.”

        And then there is the example of North Dakota, which established its vey own state chartered/owned/operated bank. https://en.wikipedia.org/wiki/Bank_of_North_Dakota
        One “improvement” would be to require all state governmental financial accounts [including bond payments/settlement] at all levels within the state, that is county, municipal;, and “authority” governments, to be with the state owned/operated bank to facilitate oversight, data collection, and to minimize the opportunities for graft, kickbacks, ghost employees, etc.

  17. DK
    Oct 18, 2017 at 9:05 am

    To paraphrase Chiang…The Public is getting so accustomed to corrupt banks that it’s becoming complacent. Well, Maybe there should be enforcement of the laws , Mr Chiang?

    • Gershon
      Oct 18, 2017 at 9:35 am

      “When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”
      ― Frédéric Bastiat

    • Oct 18, 2017 at 10:47 am

      The Treasurer of California has no law-enforcement powers. Other entities are responsible for that.

  18. Drango
    Oct 18, 2017 at 9:38 am

    Why hasn’t the Fed done anything about the corruption, and probable law breaking, of a bank it supposedly oversees? Because it’s average Americans getting cheated. The Fed is as corrupt as the banks it protects. It has distorted the economy to benefit the banks. Only when the banks themselves are in danger will the Fed take any action.

  19. Mike Earussi
    Oct 18, 2017 at 10:52 am

    Until the CEOs (and other executives) face hard jail time these practices will continue. Otherwise all the posturing in the world won’t stop them.

  20. Oct 18, 2017 at 11:48 am

    He could threaten (using Twitter?) to exclude them from doing business in California if he is elected governor. I would say the Fed is not a politically motivated agency, but the history of animosity between Republican presidents and blue state California is there to witness; Enron’s manipulation of the electricity markets, the recall of Gray Davis. DJT lost the lawsuit filed against Trump University. I call it Cold War 2, or government against the people.

  21. tony
    Oct 18, 2017 at 1:10 pm

    Sounds like bank profiling to me.It’s just a miss understanding if any state can straighten this out it’s california, they are forming a committee now nancy pelosi will head it,can’t ask for more then that.

  22. monday1929
    Oct 18, 2017 at 3:46 pm

    Wells Fargo also needs to reimburse owners of their shares who were cheated by misrepresentations regarding Wells’ “cross-selling” prowess- the true motive behind the multiple account portion of their criminal
    enterprise. And wasn’t Sarbanes Ox. supposed to take care of the “ignorance” defense?

    • chip javet
      Oct 19, 2017 at 10:39 pm

      So exactly how is Wells Fargo supposed to do that? All shareholders were cheated. Any money they spend on it is shareholder money.

      • monday1929
        Oct 20, 2017 at 6:50 am

        Obviously it should come from claw-backs, along with jail time for top executives. Are you opposed to that, or just expressing frustration because we all know this will not happen.
        And Elizabeth Warren at this point is doing more harm than good by assuring that the worst punishment the Criminal Set faces are a few minutes of tongue lashing and being forced to squirm in their seats.
        Excuse the language, but why aren’t these F**ks in JAIL?
        We need a “Broken Windows” policy for criminal bankers. Catch them early and prevent the bigger crimes.

        • George McDuffee
          Oct 20, 2017 at 10:12 am

          You appear largely correct. While there are many possible “solutions,” some suggestions are:

          (1) By law, all corporate fines are paid from the “executive bonus pool” FIRST, and only when this is exhausted from general revenues. Change the law such that corporate fines are not a “tax deductible” business expense, and the interest paid on any funds borrowed to pay a corporate fine is not tax deductible.

          (2) A “point system” for illegal corporate actions/activities, analogous to the drivers license “point system” used in many states, should be implemented.

          To avoid punishing the stockholders, who are generally powerless to control “executive” actions, the officers/directors of the corporation could be suspended without pay/benefits/perks for increasing periods of time, similar to the game suspension of misbehaving pro athletes.

          This will show the individuals involved that no one is indispensable, and will test the corporation’s succession/disaster recovery plans.

          If the corporate points continue to increase, the corporation should be placed in conservatorship and officers/directors replaced. [The “poster child” for this is GMC.] FWIW: “points” should still be assessed, even if the corporation makes an “Alford” plea [guilty but innocent.]

  23. QQQBall
    Oct 20, 2017 at 10:57 am

    I emailed Daryl Issa asking about WFC. Crickets – not even his usual boilerplate b.s. letter. I also asked if he would means test his own medical insurance and Congressional pension… got the boilerplate.

    He is done… he almost got beaten by a guy named Colonel Applegate – never even heard of him before, but he almost waxed Issa.

    Most of these jokers have no idea how pissed the ppes are.

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