Former Wells Fargo CEO says breaking up big banks would be a mistake

President Donald Trump said he is considering breaking up big banks, but former Wells Fargo chairman and CEO Richard Kovacevich thinks “it would be a mistake.”

Kovacevich said during CNBC’s “Closing Bell” on Monday that history and, more recently, the latest financial crisis, show that adding regulations on banks and limiting their lending ability has not helped the U.S. economy and the average American.

“The key to safe and sound banking is diversity,” Kovacevich added. “You can’t depend on any one sector, and when you become concentrated you have a very high possibility of failing sometime in the future.”

He added that “it’s the worst thing [Trump] can do,” and he hopes the president will reconsider.

Read on.

Meet the 61-year-old man who was dragged out of Wells Fargo’s annual meeting

Wells Fargo’s annual shareholders meeting started off peacefully Tuesday, until Bruce Marks spotted his moment.

Marks stood up to interrupt the meeting about half an hour in, yelling that board members individually should explain “what they knew” about the San Francisco-based bank’s sales scandal “and when they knew it.” His outburst, which immediately followed the roll call of all 15 board members in the room, led nine minutes later to security guards dragging him out the meeting held in a Florida hotel.

For Marks, CEO of a Boston nonprofit that helps homeowners struggling to make mortgage payments, it was his latest confrontation with a large U.S. bank. As head of Neighborhood Assistance Corporation of America, which he founded in the 1980s and has Charlotte offices, Marks has long been known as a flamethrower toward financial firms.

Over the years, the 61-year-old has taken on banks when, for example, he’s felt they weren’t lending enough to minority communities. During the financial crisis, NACA once scattered furniture on the lawn of a mortgage investor in Connecticut to protest the loss of homes to foreclosure. NACA also once attempted “an amphibious assault” with rafts on a waterfront home of JPMorgan Chase CEO Jamie Dimon during the crisis.

Read more here: http://www.charlotteobserver.com/news/business/banking/bank-watch-blog/article146982589.html#storylink=cpy

Suit: Wells Fargo targeted ‘undocumented immigrants’ for accounts

Wow, it gets worse and worse for Wells Fargo…

Wells Fargo branches across the country deliberately targeted “undocumented immigrants” to open savings and checking accounts in order to meet aggressive sales goals, according to court documents.

In sworn declarations obtained by Burlingame plaintiff’s attorney Joseph Cotchett, former employees describe a scheme in which Spanish-speaking colleagues would visit places they knew were frequented by immigrants (including construction sites and a 7-Eleven), drive them to a branch and persuade them to open an account. Some employees would give the immigrants $10 apiece to start an account. The events described in the declaration go back a decade.

“The conduct we have come up with is scandalous,” Cotchett said. “It’s outrageous to think that regulators let the bank get away with this.”

Read on.

N.J. Town Pulls Public Funds From Wells Fargo

The city of East Orange in northern New Jersey has pulled public funds from Wells Fargo & Co. after lawmakers accused the bank of engaging in predatory-lending practices and exacerbating the city’s foreclosure crisis.

City officials said Wells Fargo holds 13% of the 439 mortgages currently in foreclosure in East Orange. City councilman Chris James said the bank forced people from their homes and then let the vacant properties fall into disrepair.

“We can’t have the city’s money, that’s from hard working people’s taxes, in this system,” said Mr. James, a Democrat who led the divestment push. Mr. James also pointed to Wells Fargo’s investment in the controversial Dakota Access Pipeline and last year’s revelation that bank employees had opened more than 2 million unauthorized deposit and credit card accounts to meet ambitious sales goals as additional reasons for cutting ties with the company.

Read on.

Wells Fargo’s Board Investigation of Itself Amounts to a Farce

NEP’s Bill Black appears on The Real News and explains how the Wells Fargo scandal is emblematic of the bank’s corporate culture and that the fined executives are only scapegoats. You can view the video with a transcript here.

Source: New Economic Perspectives

New York City Pension Funds to Vote Against 10 of 15 Wells Fargo Directors

A number of public pension funds have come out against directors on Wells Fargo & Co.’s board, just days ahead of the what is shaping up to be a contentious annual shareholder meeting for the embattled bank.

New York City’s Office of the Comptroller, which oversees pension funds that own about 11.5 million shares or about 0.23% of Wells Fargo shares outstanding, said it would oppose re-election of 10 out of 15 of the San Francisco bank’s directors. That includes the bank’s nonexecutive chairman, Stephen Sanger, plus all but two members of the board’s risk, audit and human-resources committees.

Additionally, California State Teachers’ Retirement System, or Calstrs, said it voted its 11.6 million shares against nine board members, including Mr. Sanger.

Read on.

How many whistle-blowers did the Feds ignore? In the Wells Fargo case about 700.

Wow!

There were multiple red flags and missed signals at the OCC for years, the bank’s main regulator, the report said.

Most tellingly, bank examiners assigned to review Wells Fargo were aware of approximately 700 whistle-blower complaints related to “gaming of incentive plans” when they met with senior managers of the San Francisco-based bank in January 2010, the report said.

Carrie Tolstedt, who at the time headed the community banking division that was ground zero for the scandal was dismissive of the complaints, attributing them to a corporate culture that encouraged valid claims “which are then investigated and appropriately addressed,” the report said. Tolstedt also said the bank’s sales incentive programs were capped at 10% to 20% of bank workers’ total compensation “to keep motivation in check.” Tolstedt no longer works for the bank and has had to give back millions in compensation in connection with her role in the scandal.

According to the report, there was “no evidence that examiners required the bank to provide an analysis of the risks and controls, or investigated these issues further to identify the root cause and the appropriate supervisory actions needed.”

Additionally, Wells Fargo’s board of directors received regular reports dating back to 2005 indicating that the highest volume of internal ethics complaints at the bank involved “sales integrity violations.” The OCC’s Wells Fargo team received the same reports as early as 2010. However, the report said records don’t “indicate examiners investigated the root cause.”

Read on.

OCC blames itself for not investigating Wells Fargo sooner

A federal regulator on Wednesday criticized its oversight of Wells Fargo’s sales practices, saying it failed to act quickly enough once it learned of problems at the San Francisco bank.

In a report, the Office of the Comptroller of the Currency said it knew of issues with sales practices at Wells since at least 2010 – six years before the scandal would erupt in September with $185 million in fines from OCC and other authorities. Despite information OCC possessed, including complaints from the bank’s own ethics line, the regulator failed to investigate “root causes,” the report said.

The OCC “missed opportunities to address concerns with unsafe or unsound sales practices in the (Wells Fargo) community banking division earlier,” says the internal report, “Lessons Learned Review of Supervision of Sales Practices at Wells Fargo.”

Read more here: http://www.charlotteobserver.com/news/business/banking/bank-watch-blog/article145602069.html#storylink=cpy

Former Wells Fargo exec claims bank fired her for refusing to scam customers

Housingwire:

A former executive at Wells Fargo claims in a lawsuit that the bank fired her because she refused to participate in a scam like the bank’s well-publicized fake account scandal, which led to a $185 million fine after more than 5,000 of the bank’s former employees opened more than 2 million potentially unauthorized accounts to get sales bonuses.

NJ.com has the details:

Melinda Bini, a former assistant vice president and regional private banker at the Highland Park bank’s branch, says in a recent lawsuit that supervisors instructed her to manipulate accounts and sell banking products or investments that were not the customers’ best interest or without their knowledge. 

The lawsuit, filed in Middlesex County Superior Court on April 5, names Wells Fargo and three local bank supervisors.

The Franklin Park woman accuses her former superiors in the suit of running or knowing about alleged banking and investment fraud scheme at the local branch.

Nuns Take On Wells Fargo

In an insightful song about outlaws, Woody Guthrie wrote this verse: “As through this world I travel / I see lots of funny men / Some’ll rob you with a 6-gun / Some with a fountain pen.”

The fountain pens are doing the serious stealing these days.

For example, while you’d get hard time in prison for robbing a bank at gunpoint, bankers who rob customers with a flick of their fountain pens (or a click of their computer mouse) get multimillion-dollar payouts.

They usually escape their crimes unpunished — but not unscathed. After all, it’s their constant, egregious, gluttonous thievery that’s made “banker” a four-letter word in America, synonymous with immoral, self-serving behavior.

For example, Wells Fargo, our country’s biggest consumer bank, has gotten away with paying some fines for stealing millions of dollars from customers in its notorious “fake accounts” scheme.

But it hasn’t escaped the wrath of the Sisters of St. Francis of Philadelphia.

This feisty order of nuns, which holds a block of Wells Fargo stock, is infuriated by the rank immorality of its bank’s executives. The sisters are pushing a shareholders’ proposaldemanding a full accounting of the “root causes” of the malicious fraud perpetuated on vulnerable depositors.

Read on.