The Role of Whistleblowers in the Wells Fargo scandal
September 19, 2016
The Los Angeles Times reports that “The Senate Banking Committee will hold a hearing Tuesday on aggressive sales tactics employed by Wells Fargo employees that led to a $185-million settlement package with federal and state regulators. Five senators requested a committee investigation into the bank’s pressure-cooker sales practices that pushed thousands of Wells Fargo employees to open as many as 2 million accounts that customers never asked for. Scheduled to testify at the hearing are John Stumpf, chief executive of the San Francisco-based bank, and Richard Cordray, director of the Consumer Financial Protection Bureau.”
William K. Black is a former bank regulator who led investigations of the savings and loan crisis of the 1980s. He did an interview with The Real News, “Media Grossly Downplaying the Depths of the Wells Fargo Scandal”, in which he states:
“The hard work was done by the customers, by the employees, and by Los Angeles county, that brought the suit in 2015, building on these whistleblowers. You see almost no credit for that, in the coverage. Instead these federal agencies held absolutely not a single individual accountable, there were no admissions, there were absolutely no admissions in the settlement agreement. So this settlement agreement, principally negotiated by the CFPB, the Consumer Finance Protection Bureau, is disgustingly weak.”
In the interview, Black gets into the specifics of how “the workers [were] … actually the folks who blew the whistle on these frauds, along with Wells Fargo customers.” He adds:
“In fact, this is a place that has absolutely refused to clean up its house and, by the way, while it was firing over 5,000 of the employees, the people who were being coerced and not only encouraged but demanded and praised by Wells Fargo managers to cheat. The person who was in charge of the entire consumer banking division was allowed to retire. Praised as the model of what a banker should be, by the CEO and given millions of dollars with absolutely no claw-back for the abuses.”
See from 2013 in the Los Angeles Times: “Wells Fargo’s pressure-cooker sales culture comes at a cost” and from 2015 in Mother Jones: “Why Is My Bank Teller Trying to Sell Me a Credit Card I Don’t Want?” and in The Wall Street Journal “At Wells Fargo, How Far Did Bank’s Sales Culture Go?”.
Black is an associate professor of economics and law at the University of Missouri-Kansas City. He is the author of the book The Best Way to Rob a Bank is to Own One.
For more information, contact at the Institute for Public Accuracy:
Sam Husseini | (202) 347-0020
David Zupan | (541) 484-9167
William K. Black