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.
Regards,
Richard

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…

Marketwatch:

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.