Monthly Archives: September 2016

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


Wells Fargo executive departs as probe into scandal launches


Wells Fargo & Co. WFC, +0.49% said Tuesday afternoon that one executive has left the company and an investigation is being launched after a scandal that involved employees opening up accounts in unwitting customers’ names. The bank said that independent directors, working with law firm Shearman & Sterling LLP, will investigate the retail banking sales practices of the bank.

House Panel Questions Fed Chief on Wells Fargo Scandal

House lawmakers questioned Janet L. Yellen, the Federal Reservechairwoman, on Wednesday about the handling of the Wells Fargo accounts scandal, with some calling for tougher punishment of the biggest banks and their senior managers when they violate the law.

Ms. Yellen appeared before the House Financial Services Committee to discuss the agency’s supervision of the banking system, including revelations that thousands of employees at Wells Fargo had opened as many as two million unauthorized bank and credit card accounts to meet high-pressure sales goals. Ms. Yellen faced a number of tough questions during the hearing about how regulators are responding to the issue, with some lawmakers asking whether banks had simply grown too big.

Read on.


Part 7

Knight Capital made headlines around the world when one of its computers went on a shopping spree that ended up costing the company $440 million. So surely its secrets would come out now.

ON AUGUST 1, 2012, the Dow Jones Industrial Average opened the day at 13,007.47.

Business headlines that morning included conservative opponents of gay marriage celebrating “Chick-fil-A Appreciation Day,” the continued reluctance of Fannie Mae and Freddie Mac to offer debt relief to their borrowers, and profit declines at the video game company Electronic Arts.

And then the Glitch happened.

Knight Capital, the company Chris DiIorio had insisted to the SEC for a year was engaged in a monumental fraud, opened the day by inadvertently buying millions of shares in 154 different stocks. The company blamed an untested software installation that triggered the rapid-fire trades.

In an environment where milliseconds can mean millions, it took Knight Capital 45 minutes to turn the software off.

Stock values surged from the high demand, and when Knight sold back the shares it had bought by mistake, it was left with a net loss of around $468 million. The New York Stock Exchange canceled trades in six of the 154 stocks involved but deemed itself “hamstrung” by SEC rules that prevented it from breaking all of them.

Knight could have used the assets on its balance sheet to absorb the loss, but DiIorio had maintained for years that many of those assets were inflated or even fictional — ghost receivables intended to balance out the massive liabilities Knight had accrued by selling stocks it didn’t really have.

And DiIorio alleged that Knight’s immediate efforts to raise the full amount of its Glitch losses, instead of offsetting them with existing assets, proved that something was amiss on its balance sheet.

Read on.

Wells Fargo plans to eliminate sales goals sooner than planned

Embattled Wells Fargo & Co plans to eliminate sales goals for its retail banking business sooner than planned, according to prepared remarks its chief executive officer will deliver at a congressional hearing on Thursday.

Wells Fargo is under pressure to show it is holding top brass accountable after government investigators discovered that employees opened as many as 2 million accounts without customers’ knowledge in order to meet sales targets.

Read on.