Daily Archives: September 10, 2016

Audit: $8M wasted instead of helping Nevadans avoid foreclosure

WASHINGTON — Nevada should repay more than $8 million in federal funds intended to help homeowners avoid foreclosure but instead was spent on parties, gifts and other improper expenses, a federal audit released Friday concludes.

The devastating audit says the money from the Hardest Hit Fund of the Treasury Department’s Troubled Asset Relief Program was used to cover these and other administrative expenses of the Nevada Affordable Housing Assistance Corporation, which administered the program on behalf of the Nevada Housing Division.

As the funds came in, however, the number of homeowners helped by the program plummeted from 2,111 in 2013 to 541 in 2014 and 117 in 2015.

Auditors argued that the Housing Assistance Corporation was using the TARP funds to pay most of its overhead including salaries and rent and therefore should repay $7.4 million.

Read on.

Workers and former employee tell Wells Fargo horror stories

wells fargo fake account employee

Charlotte Observer:

Julie Miller was working in Pennsylvania for Wachovia when Wells Fargo took over the Charlotte bank in 2008 and began changing more than the name on its branches.

Miller said she watched with dismay as Wells Fargo increased her branch’s sales goals and lowered bonuses for meeting the new targets. The changes took place around 2011, when her branch converted to the Wells Fargo name, she said.

“It became a living nightmare,” said Miller, 52, who no longer works for Wells Fargo. “They almost doubled our goals and decreased our incentive pay. It drove me to drink.”

Miller said her health began deteriorating as she tried to meet daily requirements that her branch sell 42 products, like mortgages and lines of credit, and open seven checking accounts.

That’s when she also started noticing Wells Fargo customers complaining they were being signed up for products they never asked for.

“I’d have seniors come in with their kids and say, ‘Why does my mom have five checking accounts?’” Miller recalled. “Because some banker needed the credit and opened up five checking accounts for them.”

Former employees tell CNNMoney that they felt incredible demands from managers to meet sales quotas. The same managers turned a blind eye when ethical and even legal lines were crossed.

“I had managers in my face yelling at me,” Sabrina Bertrand, who worked as a licensed personal banker for Wells Fargo in Houston in 2013, told CNNMoney. “They wanted you to open up dual checking accounts for people that couldn’t even manage their original checking account.”

Currently a middle school teacher, Bertrand said she believes the sales targets were set by managers who were higher up: “The sales pressure from management was unbearable.”

The pressure cooker environment is also described in a lawsuit filed by Los Angeles against Wells Fargo in May 2015. The lawsuit says that Wells Fargo’s district managers discussed daily sales for each branch and employee “four times a day, at 11 am, 1 pm, 3 pm and 5 pm.”

Anthony Try, who worked at Wells Fargo’s branches in San Francisco and San Diego as a personal banker and sales representative, told CNNMoney that he believes “management was fully aware of this,” but his bosses deliberately “turned a blind eye.”

Try, who quit in 2013 because he no longer believed in what he was doing, thinks the illegal activity was systemic.

“It was ingrained in the culture for a long time,” he said.

Try, currently a musician and manager, said he did not open unauthorized accounts. However, he did open accounts for friends and family — with their permission — in order to meet the incredible demands from managers.

“There would be days where we would open five checking accounts for friends and family just to go home early,” he said.

Consumer watchdog that fined bank proves its worth, she says Lender’s case shows Trump is wrong about regulation: Clinton

Democratic presidential candidate Hillary Clinton said the consumer watchdog created under the Dodd-Frank overhaul of U.S. financial rules proved its value by fining Wells Fargo & Co. over claims that bank employees opened more than 2 million accounts without the approval of customers.

Donald Trump, Clinton’s Republican rival in the November election, is seeking to dismantle the Consumer Financial Protection Bureau, she said Friday in a statement. Trump calls government oversight of U.S. business “excessive” and has called for a pause on new rules and a review of existing regulations. Clinton said she applauded the panel’s response to Wells Fargo’s “outrageous behavior.”

The case “is a stark reminder of why we need a strong consumer watchdog to safeguard against unfair and deceptive practices,” Clinton said in the statement. “It’s yet another example of how much is at stake in this election.”

Read on.

Sen. Warren calls Wells Fargo scheme ‘staggering fraud’

“We never take for granted the trust our customers have placed in us.”—-Prominent display text in the Wells Fargo 2015 annual report

Sen. Warren weighs in on the scheme involving former Wells Fargo employees who created bogus bank accounts.

Click the video. Click here.

 

More from CFPB website:

Violations covered in today’s CFPB order include:

  • Opening deposit accounts and transferring funds without authorization, sometimes resulting in insufficient funds fees.
  • Applying for credit-card accounts without consumers’ knowledge or consent, leading to annual fees, as well as associated finance or interest charges and other late fees for some consumers.
  • Issuing and activating debit cards, going so far as to create PINs, without consent.
  • Creating phony email addresses to enroll consumers in online-banking services.

 

Enforcement Action

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, we have the authority to take action against institutions that violate consumer financial laws. Today’s order goes back to Jan. 1, 2011. Among the things the CFPB’s order requires of Wells Fargo:

  • Pay full refunds to consumers.
  • Ensure proper sales practices.
  • Pay a $100 million fine.

Today’s penalty is the largest we have imposed. Other offices or agencies are also taking actions requiring Wells Fargo to pay an additional $85 million in penalties.

To read more about the details surrounding this enforcement action, read our press release.

Wells Fargo fake accounts fiasco proves big banks don’t learn

Banksters… Still the same repeated offenders of crime…

For many people, their trust in the country’s financial system was broken (perhaps irreparably so) by the financial crisis.

In the aftermath, the financial services industry needed to take steps to repair that broken trust. Steps were indeed taken by the financial industry, while other steps were taken upon it by federal and state regulators, all to ensure that a similar fate didn’t befall our economy again in the future.

First there was the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the agency it spawned, the Consumer Financial Protection Bureau, tasked with the mission of, as its name says, protecting consumers from being taken advantage of by the financial services industry.

Then came a raft of regulations and oversight on everything from consumer banking, mortgage lending, mortgage servicing, credit cards, credit reporting, debt collection, student loans, and a number of other financial products.

Those regulations and increased oversight were supposed to give consumers confidence that they could trust the financial services industry again.

There can’t be another financial crisis, not with these too-big-to-fail regulations…or so we were told. It can’t happen again. It won’t happen again…right? Right? Right!?!?!?!?

Read on.