On September 20, before Senator Elizabeth Warren called on embattled Wells Fargo CEO John Stumpf in a Senate Committee on Banking, Housing and Urban Affairs hearing to resign, the Consumer Financial Protection Bureau (CFPB), the watchdog which rode into town on the aftermath of the financial markets crisis, announced that the bank would "pony up" $185 million for its massive fraud scheme perpetrated on its customers.
After the hearing, the WF Board finally took action, stripping the Chairman/CEO of millions of dollars in pay, bonuses, etc. Yesterday, the corporation announced Stumpf's resignation. After punishing thousands of depositors, Stumpf finally received his own capital punishment. But it's not enough.
This sad saga is far from over; Senator Warren and others have called for criminal investigations into the fraud. In 1999, the AFL-CIO launched a boycott of the bank for backing a union-busting company. WF lost millions of dollars from customers withdrawing deposits and pension funds divesting. Now, it's clear that, for many years, WF held up its own customers and then, when busted, unfairly fired over 5,300 low-level employees.
In our posts featured this week, Emily Peck and Ben Walsh of the Huffington Post assert that the Wells Fargo theft just made the case for Elizabeth Warren's bank agency. The CFPB provides critical protections from financial cons and thugs to millions of Americans, and it has already proven itself, saving billions of dollars. [READ ARTICLE]
Also, Justin Miller of The American Prospect explains why, first and foremost, the Wells Fargo scandal is about workers. With Stumpf and the "bosses" claiming that the massive fraud and theft was handled entirely by 5,300 low-level tellers and employees (who were fired, en masse), the US Department of Labor has pledged to investigate the scandal. [READ ARTICLE]
In a June 2016 report, "Banking on the Hard Sell," from the National Employment Law Project (NELP), based in part on interviews with dozens of workers from numerous big banks, the authors found that "many suffered harassment and threats over meeting extreme sales quotas, and that low base wages created pressures to put their own financial interests above those of customers." So, this sad saga is far from over; and Senator Warren and others have called for criminal investigations into the fraud. As we say in the Responsible Investor Handbook, it's time to hold the "boss" accountable.
Alana Semuels of The Atlantic compares the thriving banking town of Greenwich, Connecticut, home to billionaire hedge fund managers, to hard-hit Bridgeport, just a few exits down the highway. She asks the question: Is high finance ruining America? Financialization is another variety of capital punishment, it just takes longer. [READ ARTICLE]
We also mourn the passing of Thomas James Mackell, Jr., who passed away on Oct. 9. With his passing we have lost a great spokesman for reform of the pension and health care systems, and the author of When the Good Pensions Go Away: Why America Needs a New Deal for Pension and Healthcare Reform.
Tom was senior consultant for political, legislative and public affairs to the International Longshoreman's Association, AFL-CIO. He had a long career in the management, administration and investment management of employee benefit funds. In addition, he was a White House appointee to the ERISA Advisory Council to the Secretary of Labor from 1997 through 1999.
He also served as the chairman of the Richmond Federal Reserve Bank from 2005 to 2008. Tom spoke and wrote extensively about the roll of the big banks in looting the citizens of the US while attacking pension and health benefits. Tom was the "Town Crier" who called for an end to the rot on Wall Street, and the urgent need for American workers to take back our country. Tom would have joyfully ridden the Wells Fargo goat rodeo to its final, bitter end.
While I didn't know him well, I was fortunate to meet Tom a number of times on the road. He was the quintessential "road warrior" for working people. I spoke with Tom a few weeks ago and he happily reported that he had received an advance copy of the Handbook, and invited me to speak to his ABA group in New York City. When I last opened his book to write this intro, I noticed he signed it with three short words. It said, simply, "Tom, protect our future. Tom."