How can we stop banksters from robbing us?

by Jim Hightower

In an insightful song about outlaws, Woody Guthrie wrote this verse: “As through this world I travel/ I see lots of funny men/ Some’ll rob you with a 6-gun/ Some with a fountain pen.”

The fountain pens are doing the serious stealing these days. For example, while you would get hard time in prison for robbing a bank at gunpoint, bankers who rob customers with a flick of their fountain pens (or a click of their computer mouse) get multimillion-dollar payouts. They usually escape their crimes unpunished… but not unscathed. After all, it’s their constant, egregious, gluttonous thievery that has made “banker” a four-letter word in America, synonymous with immoral, self-serving behavior.

For example, Wells Fargo, our country’s biggest consumer bank, has gotten away with paying some fines for stealing millions of dollars from customers in its notorious “fake accounts” scheme – but it has not escaped the wrath of the Sisters of St. Francis of Philadelphia. This feisty order of nuns, which holds a block of Wells Fargo stock, has been embarrassed and are infuriated by the rank immorality of their bank’s executives. They are pushing a shareholders’ proposal demanding a full accounting of the “root causes” of the malicious fraud perpetuated on vulnerable depositors. Unsurprisingly, the bank’s aloof and arrogant board of directors, which had silently presided over the fraud for years, opposes any such meaningful probe.

Such recalcitrance only intensifies the public’s outrage and cynicism toward out-of-control banksters. But the giant worries less about its public image than it does about the reality an in-depth investigation would expose – namely that our nation’s dominant banks have not only become too big to fail and too big to jail, but too big to manage and control. To stop that thievery, they must be broken up.

“Top Leaders Got Big Pay As Crisis Hit Wells Fargo,” The New York Times, March 17, 2017.

 

The sad saga of John Stumpf

Poor John Stumpf. The preening, silver-haired CEO of Wells Fargo sat self-assuredly atop the pecking order of the financial establishment, and he was hailed as a paragon of big-banker virtue… until he suddenly fell off his lofty perch.

It turns out that being “a paragon of big-banker virtue” is not at all the same as being a virtuous human being. Banker elites don’t get paid the big bucks by “doing what’s right,” but by doing what’s most profitable – and that means cutting corners on ethics, common decency, and the golden rule. Stumpf didn’t just cut corners, he crashed through them, devising a business plan that effectively encouraged Wells Fargo branches to steal from millions of their poorest and most easily deceived customers.

The courtly chief executive coldly fostered a high-pressure sales culture, pushing elderly pensioners, non-English-speaking workers, and other vulnerable depositors into accounts they didn’t understand or need, extracting high fees for the bank. One shameful (and illegal) profit-boosting ploy was having bank employees secretly set up fake, high-fee accounts for some two million customers without their knowledge, much less their consent.

Running such rackets for more than a decade, Wells Fargo prospered and the chief amassed a fabulous personal fortune. Then, as the scandal went public last year, the “paragon of virtue” tried to save himself by firing 5,300 lower-level employees. But, it wasn’t enough – Stumpf was shoved out and forced to surrender $41 million in stock awards he had stashed away.

But don’t weep for Poor John – he grabbed $83 million in stock payments on his way out last year, and he still holds another $147 million in Wells Fargo stock he was awarded by the board. It’s said that virtue is its own reward, but big banker virtue is rewarded in cash.

“Top Leaders Got Big Pay As Crisis Hit Wells Fargo,” The New York Times, March 17, 2017.