Beth Jacobson was a Wells Fargo loan officer who blew the whistle on the bank's predatory, racist loan-fraud in the runup to the 2008 financial crisis, which tanked the world's economy and nearly wiped out Wells Fargo (they were rescued with a $36B taxpayer-funded bailout).
Eight years later, Wells Fargo has fired 5,300 employees for participating in a scam that involved opening 2,000,000 fake accounts in its customers' names, stealing their money and crashing their credit-ratings — the gave the exec who oversaw this a $125M taxpayer-subsidized bonus, and CEO John Stumpf, who took home $200M in bonuses based on profits from the fraud, will keep the money and his job, but the whistleblowers who reported the fraud starting in 2011 were all illegally fired.
Jacobson describes how Stumpf — now CEO, then a top exec — was complicit in the fraud that helped precipitate the crash and the worst recession since the Great Depression. She pins blame for the loan-fraud on the bank's aggressive sales targets — the same thing that caused the current fraud, suggesting that the bank hasn't learned a fucking thing since 2008, except that it can get away with crime, every time.
"One means of falsifying loan applications that I learned of involved cutting and pasting credit reports from one applicant to another. I was aware of A reps who would 'cut and paste' the credit report of a borrower who had already qualified for a loan into the file of an applicant who would not have qualified for a Wells Fargo subprime loan because of his or her credit history. I was also aware of subprime loan officers who would cut and paste W-2 forms. IDs deception by the subprime loan officer would artificially increase the creditworthiness of the applicant so that Wells Fargo's underwriters would approve the loan. I reported this conduct to management and was not aware of any action that was taken to correct the problem.
"High-ranking Wells Fargo managers knew that this practice was going on, because after about a year of these standby explanations being given, underwriters in the underwriting department were told to call the customers directly rather than contact the loan officer who was working with the customer. The loan officers quickly figured out how to work around this by warning customers that underwriters might call them and then coaching the customers about what to say. For example, customers were told that they should just tell the underwriter that they did not have much in the way of assets or documentation for their income, because otherwise the underwriter would deny their loan or force them to fill out additional paperwork to document their financials. The point was to get the customer to say whatever would allow them to qualify for a subprime loan, even if it was not true. The customers went along with this because they thought it would expedite the process of getting them the loan that they had been told was the right one for them."
Wells Fargo Whistleblower: "They Are All Riding the Stagecoach to Hell"
(via Naked Capitalism)
(Image: Apache Junction-Superstition Mountain Museum-Wells Fargo Bank, Marine 69-71, CC-BY-SA; Storm clouds, cjohnson7, CC-BY)