financial instability

Rose Marie Berger 10-25-2016
Northfoto / Shutterstock.com

Northfoto / Shutterstock.com

I OPENED MY first savings account at Wells Fargo in Sacramento, Calif., when I was 8 years old. I remember the bronze stagecoach penny bank they gave me to help me practice saving. When I moved to Washington, D.C., I put my money into a D.C.-based bank, soon bought out by Wells Fargo. But it wasn’t the same Wells Fargo I’d grown up with.

In 2012, the Justice Department found Wells Fargo guilty of discriminating against both African-American and Latino borrowers during the subprime mortgage heist. It’s one of the top two banks invested in the Corrections Corporation of America, which is one of the largest for-profit prison companies in the U.S. In 2015, Wells Fargo was the world’s largest bank.

This fall, Wells Fargo CEO John Stumpf, who abruptly resigned in October, was called before a congressional investigative committee to answer accusations that thousands of Wells Fargo employees secretly opened 2 million fraudulent accounts without customers’ permission or knowledge, and were incentivized by the company to do so. Employees opened false banking and credit card accounts, transferred funds, and created phony access codes and email addresses. “The frauds violate federal and state statutes against bank fraud and identity theft,” William K. Black Jr., white-collar criminologist and cofounder of Bank Whistleblowers United, told Sojourners. Customers incurred charges and fines; in some cases, their credit ratings were damaged.

CEO Stumpf accepted “full responsibility for all unethical sales practices in our retail banking business.” (John Steinbeck once called this kind of thing a successful combination of “piracy and puritanism.”)

Wells Fargo claims that it has fired 5,300 people since 2011 related to these practices, but details are vague; the fraud investigators were hired by Wells Fargo. We don’t know how many were fired because they couldn’t fulfill the extortionate sales quotas.

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