Monthly Archives: September 2016

In Wells Fargo Case, News Really Did Happen To An Editor


Several years after I returned to New York from Oregon, I made a strange discovery. Bank accounts I was certain I had closed were inexplicably racking up service charges. It seemed bizarre, particularly because I had gone in person to a newly opened local branch of my West Coast bank to make sure the accounts were shut down.

The failure to pay these charges (bills were sent to my old address and never caught up with me) resulted in penalties and a report to a credit agency. After an increasingly frustrating series of exchanges at the local branch, the bank agreed to wipe out the charges but said I would have to deal with the credit agencies on my own.

It seemed outrageous, and as the editor in chief of an investigative news operation, I thought about asking Paul Kiel, ProPublica’s crack reporter on bank shenanigans, to take a look.

But then I stopped myself.

There’s an old saying in the journalism business for this sort of thinking: News is what happens to an editor.

As with so many newsroom aphorisms, it’s meant to be proclaimed with an eye roll and a tone of deep sarcasm. Reporters view editor-generated stories as the bane of their existence, and not without reason. Random events and pet peeves are not often a great starting point for serious stories.

Early in my career, I worked for a newspaper chain whose leadership was obsessed with the weather. Virtually every summer day, editors assigned stories on the heat or thunderstorms to some hapless reporter unfortunate to be sitting in direct sight of the city desk. (To be fair, Landmark Communications ended up creating the Weather Channel, an asset that eventually sold for $3.5 billion. Maybe they weren’t as dumb as we thought.)

Determined not to be the editor whose life events turn into assignments, I did not ask for a story on the refusal of Wells Fargo to set things right with the credit bureaus they had notified.

Read on.

Speaking Out Has a Price… Are You Willing to Pay the Cost?

This week I had the opportunity to speak to the University of Nebraska at Omaha for their fifth annual Accounting Speaker Series.  Close to two hundred accounting alumni as well as business school students taking ethics courses attended. Many of these young men and women would be auditing company books. Many would see red flags that would need to be looked at more closely.
I talked about the importance of speaking up about what they might find that is not up to standards and why this was so critical. And I used my own war story as an example. They had heard this critical message about speaking up two years ago when Helen Sharkey spoke to them of her experience. My message reinforced hers.
Newly hired by Dynegy, an up-and-coming energy trading company in Houston, Ms. Sharkey saw what she perceived as wrong doing, and did not speak up as a result of her newness to the role she was in and that the “mistake” was made by her boss. Her failure to speak up to authorities  branded her as complicit in securities fraud and Ms. Sharkey spent twenty-eight days in  a maximum security  prison, just two months after giving birth to twin boys. Her bosses got off scot-free.
I warned the audience that speaking up has a price – loss of a job, being black balled in your profession; yet not speaking up had penalties as well – as Ms. Sharkey’s experience could speak to. And if they didn’t speak up and still saw wrongdoing then it was time to polish up their resume and leave the company for one with higher ethical values.

U.S. Bank to pay L.A. $13.5-million over foreclosed homes that fell into disrepair

The Los Angeles city attorney has reached a $13.5-million settlement with U.S. Bank to resolve allegations that the nation’s fifth-largest bank operated as a slumlord and allowed hundreds of foreclosed properties to deteriorate, fostering crime and blight in L.A. neighborhoods slammed by the housing crisis.

The settlement, announced Thursday, requires the Minneapolis-based firm to maintain its foreclosed properties in “accordance with all applicable laws and standards for two years.” A full-time bank employee will work with city agencies to resolve code violations of foreclosed properties across Los Angeles, the city attorney’s office said.

 “Banks must be accountable for the condition of the properties they hold,” City AttyMike Feuer said in a statement. “This significant settlement underscores my commitment that all foreclosed and vacant properties be kept up to code, so they don’t become sources of blight or magnets for crime.”

U.S. Bank spokesman Dana E. Ripley said the bank would be working with the city as well as loan servicers to ensure foreclosed properties are maintained.

Read on.

Wells Fargo fined $4 mln for illegally repossessing servicemembers’ cars

Another example why the banksters will never be trustworthy. to the public…


Wells Fargo Bank WFC, -2.07% will pay $4.1 million to settle allegations that it illegally repossessed 413 vehicles owned by servicemembers without obtaining a court order, the Justice Department said Thursday. The settlement, which covers repossessions from Jan. 1, 2008 to July 1, 2015, requires the bank to pay $10,000 to each of the affected persons. Wells Fargo also agreed to change its policies as part of the agreement. The Justice Department launched its investigation into the bank’s practices following a complaint on behalf of Army National Guardsman Dennis Singleton, whose car was repossessed as he was preparing to deploy to Afghanistan. After the bank sold the vehicle at a public auction, it also attempted to collect $10,000 from Singleton. Wells Fargo’s latest legal trouble comes amid revelations of widespread illegal sales practices.

Ghosts of subprime: Germany plans Deutsche Bank rescue, or does it?

Since the subprime mortgage crisis melted the world economy, Germany became familiar with the financial investments made in America by Deutsche Bank.

Documentaries would air on evening television featuring German news anchors driving around parts of dilapidated neighborhoods in Florida, pointing to vacant home after vacant home and declaring “owned by Deutsche Bank,” sources repeatedly told HousingWire.

Things appear to be turning around as DB began to add staff in Florida in order to feed growing demand for its financial services. Besides, Deutsche Bank is hardly alone in the once-common charge of big banks allowing foreclosures to languish.

But now those bad mortgage bets from year’s past are said to be taking a final, devastating toll on the mighty German bank, according to news reports in Europe.

Or is it?

According to the BBC, Germany is preparing a bail-out of Deutsche Bank “in case it cannot pay fines in the US.”

Read on.

Banks finally want to originate mortgages again

A lot of banks took a long hard look at mortgage origination after the financial crisis and decided they want to clean their hands of the industry that fueled America’s collapse.

Andrea Riquier explained in an article in MarketWatch that banks were “scarred by the crisis and the new regulations put in place since then,” creating the question “why put up with all the uncertainty and risk involved with mortgages, which have always been a low-margin business?”

Read on.

Maxine Waters: I’m going to move forward to break up Wells Fargo

Throughout Wells Fargo CEO John Stumpf’s rough day in front of the House Financial Services Committee, multiple representatives called for the bank to be broken up, suggesting that the megabank is simply too big to manage effectively.

But as the five-hour hearing neared its conclusion, the ranking member of the committee, Rep. Maxine Waters, D-Calif., went beyond her fellow representatives’ calls to break up Wells Fargo, stating that she is going to actually move to break up the bank.

“I’ve come to the conclusion that Wells Fargo should be broken up,” Waters said. “It’s too big to manage and I’m moving forward to break up the bank.”

According to a represenative from Waters’ office, Waters told reporters after the hearing that she plans to pursue legislation to break up the bank.

Read on.

BB&T to pay $83 million for FHA lending violations

Branch, Banking & Trust Company (known more commonly as BB&T) will pay $83 million to settle allegations brought by the Department of Justice, which accused the lender of violating the False Claims Act by falsely certifying that it complied with “critical underwriting and quality control requirements” on mortgages insured by theFederal Housing Administration.

BB&T becomes the latest in a long string of lenders targeted by the DOJ for False Claims Act violations. The False Claims is designed to prosecute vendors the government feels fraudulently represented themselves while doing business with the nation.

Read on.

15 years ago: Pro-union worker fired by Wells Fargo, hired by union

Banks need to be unionized.”—-Blake Schneider, former and fired Oregon bank employee

Congressman Keith Ellison wrote an op-ed in The Daily Beast on how Wells Fargo fake account scam shows why bank employees need a union. What was not talked about and I remembered this article and class-action lawsuit several years ago by a fired Oregon pro-union bank employee against Wells Fargo. A union was in the development for Wells Fargo by a bank employee 15 years ago  Here is Blake Schneider’s story:

It’s what union representative Mike Richards likened to “a 21st-century sweatshop.”

At an air-conditioned office in Beaverton, hundreds of bank “back office” workers earn comfortable salaries, but face ever-present management monitoring of phone calls, and unending pressure to work faster.

Richards, a union rep and organizer at Portland-based Office and Professional Employees Local 11, got the call in March 2000 when discontent in the Wells Fargo home equity loan office bubbled up into interest in a union.

Wells Fargo loan officer Blake Schneider, 37, wanted to know if a union could help them. Salary wasn’t the issue, said Schneider, who with two years of college was earning $45,000 a year including overtime. Rather, it was lack of control over the work environment.

“The bank was always restructuring,” Schneider recalls. In the five years he worked there, Schneider says his 350-worker home equity loan department went through four floor managers. Meanwhile, no one in the unit ever got a pay raise.

“I didn’t necessarily believe in unions at first,” Schneider says. “But we had exhausted every avenue of expressing our concerns as diplomatically as possible.”

“Management would not listen to the employees,” he said.

Schneider processed home loans in Central and Southern California. He was expected to complete 10 loans a day, but it was difficult to do more than eight a day without working overtime or sacrificing customer service on the phones with borrowers. And, with managers listening into conversations and watching even his computer keystrokes, he and other loan officers were constantly graded on their performance. The voice mail box would fill up after 50 calls, and his desk drawer would fill up with files waiting to be processed.

“When you left there you were so physically and mentally drained that you couldn’t function at home,” Schneider said.

For Schneider, the work load meant long hours. A single father, he would work late into the evening in order to get caught up, instead of spending time with his son, now 14.

To top it off, the company wasn’t paying properly for overtime. Schneider and 117 others joined in a class action lawsuit to recover the unpaid overtime. The bank settled out of court in December 2001 by paying their claims.

Meanwhile, Richards helped Wells Fargo employees kick off a union campaign. Someone procured a list of the Beaverton home equity loan department’s employees and their home addresses. The union mailed out material touting the advantages of unionism, and followed up with a mailing to each employee at their workplace. When the home loan floor manager got wind of it, she went around collecting the envelopes, put them in a box and mailed them back to Richards at the Local 11 office. Still, some got through to their intended recipients.

By the standards of corporate America, Wells Fargo was poorly defended. The office, 18700 NW Walker Rd., is part of Capital Center, a complex shared with other employers. Employees eat lunch at a cafeteria in the adjacent Washington County Workforce Training Center, meaning Richards and pro-union workers had the ability to talk with other workers during their lunchbreaks, an advantage few union organizers enjoy. The union campaign even set up a booth in the cafeteria.

When management decided to hold an outdoor employee appreciation meeting, Schneider was able to alert locked-out Steelworkers from Oregon Steel, who crashed the party with picket signs and fliers. [Oregon Steel had its own beef with Wells Fargo at that time, as lead financier of their Pueblo, Colorado, employer.]

Schneider said the union idea spread. Employees in Wells Fargo credit card division wanted in. Collections workers wanted in.

But the employer countered with tactics of its own – barbecues, mandatory attendance anti-union meetings and one-on-one interrogations. Schneider said he was asked by management to name names of other union supporters. He refused.

The campaign went on for a year. A final push was planned, to woo workers to the union cause, but in April 2001, the union pulled out of the campaign, citing a lack of resources. In June 2002, over a year later, Schneider was called into the office of his manager and fired without explanation. He was escorted from the building. His personal belongings, left at his desk, arrived by express mail the following day.

Rep. Keith Ellison Questioning Wells Fargo CEO John Stumpf