On the latest Planet Money podcast (MP3), a former San Francisco Wells Fargo banker describes the bullying and coercion she faced from senior management while working at the bank's head office, and how the bank forced her out when she blew the whistle on fraud and then blacklisted her with other banks, forcing her out of the sector altogether.
Besides stealing money from customers by creating fake accounts and then charging them fees, Wells Fargo is in trouble for repossessing 413 cars owned by US military service members. The bank did so without a court order, which violates federal law. — Read the rest
Here's two hours of Democratic and Republican congresspeople not taking any weaselly bullshit from disgraced Wells Fargo CEO John Stumpf.
In September 2016, Wells Fargo was issued a combined total of $185 million in fines for creating over 1.5 million checking and savings accounts and 500,000 credit cards that its customers never authorized.
Following from Wells Fargo's 2,000,000-account fraud against its own customers — part of a decade-old pattern — the state of California has imposed sanctions on the bank, freezing it out of bond issues, brokerage business, and suspending all investment in Wells Fargo-issued securities.
Wells Fargo's Board of Directors have finally exercised their right to claw back part of the hundreds of millions of dollars taken home by two senior executives who were compensated on the basis of the fraudulent earnings the bank took in while opening 2,000,000 secret accounts in their customers' names, taking money out of those customers' real accounts to pay for the fees and penalties accrued by the fake accounts, and trashing their customers' credit in the process.
When Wells Fargo fired 5,300 employees for opening 2,000,000 accounts in its customers name (stealing their cash and trashing their credit scores in the process), it wanted us all to know that it had cleaned house, because this was just 5,300 people who, without any help from senior management, all happened to coincidentally engage in the same fraud.
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).
Normally, companies that give "performance pay" to their execs can only write off the first $1M: but when Wells Fargo gave $125M to Carrie Tolstedt (shown above receiving American Banker's 2010 award for being "the most powerful woman in banking") as she "retired" after overseeing a 5-year period in which Wells Fargo's top brass were aware that their employees were opening 2 million fake accounts in their customers' names, Wells structured the payment as a "bonus," meaning that the company took a $78 million off its taxes, pocketing $27m in savings.
CNN Money has found multiple whistleblowers from Wells Fargo who were willing to go on the record and report that they were fired in retaliation for coming forward to report the massive fraud in which Wells Fargo employees opened up 2,000,000 fake accounts in their customers' names, raiding their real accounts to open them, then racking up fees and penalties, and trashing their customers' credit ratings.
After Wells Fargo CEO John Stumpf recited a drawn-out No True Scottsman Fallacy disguised as a hollow apology at the Senate Banking Committee's Wells Fargo hearing, senator Elizabeth Warren tore into him.
Warren slammed Stumpf for failing to fire any senior executives linked to the scandal, while Wells Fargo's aggressive sales tactics helped pump up the bank's stock price.
Carrie Tolstedt is the Wells Fargo executive who presided over a titanic, multi-year fraud through which at least 5,300 of the employees who reported to her opened up fake accounts in Wells' customers' names, racking up fees and fines, trashing the customers' credit ratings, and, incidentally, pulling in record revenues for Tolstedt's department, which Wells' management recognized by giving her a $125M parting gift when she left the company at the end of July, just weeks before the scandal broke.
5,300 Wells Fargo employees created 2 million phony bank accounts and racked up huge fees, raking in commissions from their employer for being such great salespeople for the bank's services; meanwhile, the fees associated with the 2 million fake accounts created the appearance of much greater earnings for the bank, which it trumpeted to its investors.
Wells Fargo has been widely criticized for its predatory, deceptive practice of targeting black mortgage borrowers with subprime mortgages (whose teaser rates ballooned into unsustainable long-term rates after a few years), rather than offering those borrowers much cheaper and better mortgages that would not have led to widespread bankruptcy, foreclosure, and the destruction of hardworking families' live savings.