A few years ago the media made some ripples after investigating Wells Fargo’s sketchy practices. A few weeks ago regulators created waves when they fined WF $185 million for fraud. WTF. The bank’s response? They fired 5,000 workers. Why? For opening over two million unauthorized accounts under their customers’ names without their permission or knowledge, racking up millions in customer fees and damaging their credit scores. Spoiler alert: nobody’s very happy with Wells Fargo right now. So how did this happen? It seems workers were caught between a rock and unrealistic sales targets, with bonuses for good performance or the threat of unemployment for poor sales. This all comes after the 2008 near-collapse of the economy thanks to Wall Street’s greed and risky behavior. Wells Fargo’s CEO tried to pin the blame for the fraud on the workers, but when you have 5,000 bad apples, you have to wonder if someone poisoned the whole orchard.
This week the Senate Banking Committee hauled Wells Fargo's CEO John Stumpf up for a high-profile verbal spanking a la Senator Elizabeth Warren style, who basically told him to go directly to jail, do not pass go and do not collect his $200 million bonus. So how does this affect the election? Well one of the two most mistrusted candidates in history will inherit this mess and must somehow convince the nation to have faith in the most mistrusted industry in America. And not prioritizing financial reform and Wall Street regulation will be seen as condoning such reckless behavior. And Donald Trump is currently in the middle of his own fraudulent scandal. Good luck with that.
But if you’re in the process of switching bank accounts you should hold your horses since Wells Fargo may only be the tip of the shady iceberg – Citibank, PayPal and Santander were all fined within the last six years for fraudulent practices. And think the banks are the only bad guys? Mylan is still creating epi-panic. So basically Corporate America is in the firing line for losing public trust in a big way but since 2008 no executives have faced any serious consequences. And until tougher laws are put in place, it will continue to be business as usual on Wall Street. So how do you like them apples?
Just want to stick it to the big banks? Movie for your mood: The Bank Job