You don’t be messin’ with Pocahontas

stumpf

Wells Fargo CEO John Stumpf defends himself from a scathing attack by U.S. Sen. Elizabeth Warren.

 

 

As covered here in the blog last week, executives at Wells Fargo Bank have — or at least ought to have — a major scandal on their hands. But so far they’re gliding through it pretty much unscathed.

A quick reminder of how the scam worked:

To drive up the number of bank accounts, credit cards, consumer loans and other accounts held by their customers, and thus drive up the amount of revenue the bank could squeeze from those customers, Wells Fargo management created and enforced an ambitious quota system for their lower-level employees.

If those employees didn’t “cross-sell” their customers hard enough to create additional accounts, they would not be eligible for bonuses or could even be fired. Wells Fargo CEO John Stumpf set a goal of creating eight accounts per customer, far above the industry average of three accounts, and he and his management team drove his people hard to meet that goal.

As Stumpf liked to spin it, the bank was “deepening its relationship” with its customers, but in fact it was merely reaching deeper into the customers’ pockets. And he and his top executives didn’t seem to care much about whether those customers actually needed or wanted those additional accounts. In fact, over a period of several years, to meet the numbers demanded by their bosses, Wells Fargo employees created almost 2 million false accounts, home equity lines and credit cards.

Bank regulators — led by the Consumer Finance Protection Bureau, which congressional Republicans continue to try to kill at the behest of Wall Street — eventually caught on to the problem. Wells Fargo recently agreed to pay $185 million in fines, which as I noted earlier, amounts to 3 percent of its second-quarter profit. In addition, more than 5,000 bank employees have been fired, but none of them have been top executives. In fact, the person who ran the division where most of the problems occurred was recently allowed to retire with glowing remarks from Stumpf, taking with her a $125 million golden parachute.

At a Senate Banking Committee meeting Tuesday, U.S. Sen. Elizabeth Warren finally got the chance to publicly question Stumpf about the scandal. And rather than try to describe it to you, I’ll let you watch it, because it is quite an evisceration:

 


As Warren later pointed out, though, a scathing public evisceration is a small and insufficient price for the $200 million that Stumpf received in stock options alone, a figure which doesn’t include Stumpf’s salary and other bonuses. She also pointed out that if Carrie Tolstedt, the head of the community banking division, had been fired instead of allowed to retire, she would have forfeited some $45 million of that golden parachute.

Instead, the bank arranged to announce her retirement two months before news broke of the scandal and settlement, ensuring that she left with her millions before public pressure could grow to fire her.

“Wall Street won’t change until we make it change,” Warren concluded. And in a political system where big money is allowed to speak very very loudly, we won’t make it change.

Reader Comments 0

3044 comments
bswain
bswain

Just wanted to let you know, I am increasingly pleased with the no-holds-barred exposure you have been doing, this piece (Warren v. Stumpf) included. In a time when journalists have forgotten to be investigators and truth-tellers, when newspapers are merely vessels for advertising, your column is tremendously important. I hope more of your blogs make it to the editorial page of the AJC and beyond.

MiltonD
MiltonD

Hillary gets $225k per speech from guys like this, don't see HRC changing anything. 

Infraredguy
Infraredguy

All of the Congress is complicit in Wall Street both Parties and the Clintons have been right there as their lap dogs Hillary will do nothing just as Obama said back in 2008 to change it

turnerben13
turnerben13

I find it deplorable that you had to get a dig into Congressman Republicans. A west coast newspaper reporter caught wind of this several years ago and reported as well as turned the story over to the Consumer Finance Protective Bureau. Another government bureaucracy that was slow to react . Wells Fargo and the key executives as well as Stumpf need to be held responsible and punished accordingly. Keep in mind this behavior and being caught cost 5300 employees their jobs and livelihood. Where is the follow up to that part of the story and not the glorification of "Pocahontas " with an obvious gesture of indignation at the GOP.

stogiefogey
stogiefogey

What Wells did was despicable. Stumph had to know what was going on.

The BOD should help him "deepen his relationship" with the jobless community, but probably won't happen since he's also chairman of the board.

StraightNoChaser
StraightNoChaser

Looks like that definitive lying evidence disappeared over night, just like I said it would last night when the narrative was we can't release the video because of an investigation.  What happened td, Dooms?  


Charlotte, N.C., police shooting video unclear on victim's gun, chief says
Video of police shooting a black man does not definitively show the man pointing a gun at anyone, the police chief said Thursday (Sept. 22). He said he plans to show the video to the dead man's family but will not immediately release it to the public.


http://www.nola.com/crime/index.ssf/2016/09/charlotte_nc_police_shooting_v.html

ByteMe
ByteMe

@Nick_Danger Broadcasters are crying because they aren't making enough money on this race with Trump being out-spent so much.

td1234
td1234

PM Netanyahu: "The UN has become a moral farce."

rimsky
rimsky

@td1234 I heard him in the UN. 

He praised Obama for backing Israel in the UN by vetoing the resolutions.

That got to sting.  Praising Obama.

honested
honested

@Nick_Danger @td1234 

Well, at least not since the UN started expecting them to follow the same rules as real, civilized countries.

Infraredguy
Infraredguy

Israel will look out for itself as well it should while anti Semites like you cozy up to Arab terrorists

ByteMe
ByteMe

 Donald Trump’s temperament is so great, you see, that he doesn’t even have to say it’s the best. Except when he does, which is often.

In fact, he’s been saying it for almost the entire year. Only recently did he start citing other people who thought the same — people whom he apparently convinced of it simply by saying it so much himself.

Lots of people say Trump really does bring out the best in comedy writers.

JamVet
JamVet

Blood & Guts td, have you replaced any novel servers lately?

td1234
td1234

@JamVet Have you gotten your meds from your VA psychiatrist? 

StraightNoChaser
StraightNoChaser

@td1234  Election update


The middle and end of the story is always the best and that's why MORE THAN LIKELY, you did not touch on it with your post.


Some previous versions of these polls were taken during the height of Clinton’s post-convention bounce, so while they show her lead shrinking, she’s still out in front.


If the bulk of the polling data begins to show Clinton doing better than she was previously, her odds of winning the election will go up.

~~~~fivethirtyeight

ByteMe
ByteMe

@StraightNoChaser  Their model tends to lag because it favors confirmation data over just a single data point.

JamVet
JamVet

At least td could follow the lead of gutless Lee and admit that he was to smart to serve in the US Armed Force.

Sheesh, he could learn something form the Gwinnett twerp if he would just pay attention...)

td1234
td1234

@JamVet Please, please get to the VA psychiatrist and get back on your meds.  

JamVet
JamVet

@td1234 @JamVet 

BTW, how much are you paying for your anti-psychotic drugs these days? And are they covered under your Obamacare, service avoider?

Or did you actually serve in the US Armed Forces and are just too shy to admit it?

LOLOL at Blood & Guts td...

td1234
td1234

Election Update: Reports Of A Clinton Rebound Have Been Greatly Exaggerated

Hillary Clinton’s chances of winning the White House are still near an all-time low in the FiveThirtyEight forecasts, although they’re up a smidge from earlier in the week. Our polls-only forecast gives her a 59 percent chance of beating Donald Trump, while our polls-plus model shows her with a 58 percent chance. Some interested parties are pointing to individual polls as evidence of a Clinton rebound, but a closer look at all the data released over the past three days suggests that those people are stretching.

Yes, Clinton has gotten some good polls. A new Monmouth Universitysurvey showing her ahead by 9 percentage points in New Hampshire is a strong result. A SurveyMonkey poll finding her leading Trump by 5 points nationally is good. The NBC News/Wall Street Journal poll putting her up 6 points among likely voters will also warm the hearts of Clinton fans.

But the trend lines are more mixed. Here are the polls released over the past three days and finished within the last week compared to the most recent poll in the same contest from the same pollster.1


http://fivethirtyeight.com/features/election-update-reports-of-a-clinton-rebound-have-been-greatly-exaggerated/

honested
honested

@td1234 

Things must be getting desperate, we're down to cut&paste!


Again, chump has moved up to 4th among African Americans but still struggles for 5th among Latinos.

Hedley_Lammar
Hedley_Lammar

@td1234 You know its bad when they claim her having basically a 60% chance is a win

FIGMO2
FIGMO2

@OriginalProf 

I am getting REAL tired of the snobbery shown by the somewhat-to-highly educated towards the high-school-or-less educated voters. Really offensive.

Think nothing of it.

I'd speculate that a cardiologist who can do bypass can't rebuild a carburetor. A vascular surgeon couldn't wire his own house. An engineer couldn't be an ambassador to the U.N. A lawyer couldn't roof his own house, much less build it.

honested
honested

@YouLibs @FIGMO2 @OriginalProf 

Inefficient device for atomizing fuel in a somewhat stochiometric ratio. Made obsolete in most cases by inexpensive electronic fuel injection.

td1234
td1234

"Donald Trump is leading Hillary Clinton nationally by five points, according to the latest Rasmussen poll.

The results found Trump has 44 percent support, while Clinton has 39 percent.

Libertarian candidate Gary Johnson took eight percent in the poll, while Green Party candidate Jill Green raked in two percent.

Trump’s lead increased three points from the previous poll, which had him up two points over Clinton.

The poll questioned 1,000 likely voters Sept. 20-21 and has a margin of error of plus or minus three points.

StraightNoChaser
StraightNoChaser

@td1234 Yet based on your favorite projection, Nate Silvers now, if the election was held today he would still lose. 

JamVet
JamVet

@StraightNoChaser @Hedley_Lammar @td1234

td


November 6th, 2012

10:59 pm


Rove’s 321 prediction is very close to coming true. 3(FL, VA and NC), 2 (OH and IN) and 1 (From IA, CO or NV).


Going to be a long night and it appears the lawyers could get involved at this point.


To all you who have been concerned, I have been lurking all night and will be here tomorrow and the days hence under my same screen name.


I still believe Romney is going to pull the inside straight and be the next President. If I am wrong then I have to tell Jamvet that he knows more about politics then I do