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“Elizabeth Warren was not nearly as polite as I was…”
In February I posted an open letter to Timothy Sloan, the avowedly reformist CEO at Wells Fargo, regarding his company’s regrettable sales practices and its retrograde investments in fossil fuels, and our plan to divest ourselves of ties with his bank.
In April, Mr. Sloan himself published an open letter, listing the many ways in which Wells Fargo had been “ acting to regain its customers’ trust” after last year’s nasty scandals. No, of course he didn’t mention my letter, or many others he must have received. ( Nor did he mention his good works with the Boy Scouts of America, who have had their own image difficulties in recent years.)
My letter had circulated in the social media, while Mr. Sloan’s was a full-page ad in national newspapers. At the time, Mr. Sloan and the head of the Wells Fargo board purchased a total of $5 million of their company’s stock in a handsome display of good faith.
Meanwhile, lacking this good faith, my husband and I began laboriously to transfer our accounts out of Wells Fargo to more socially responsible banks. At least a few of my readers and friends said they were doing the same.
When the Wells Fargo fake- accounts scandal first erupted in 2016, it had mattered less to us than the bank’s short-sighted investments in oil pipelines and other destructive fossil fuel projects.
Later, in October 2016, the New York Times reported at some length how employees at various Wells Fargo branches had preyed upon the most vulnerable individuals—immigrants with little English, older adults with failing memories, students opening their first accounts.
According to Kevin Pham, a former Wells Fargo employee in San Jose, California, “It was like lions hunting zebras.” Pham mounted a Facebook campaign to hold Wells Fargo accountable. He scored 50,000 “shares”.
While there had reportedly been no systematic targeting of vulnerable groups, demographic patterns sometimes emerged, such as Native Americans near Phoenix, looking for a safe place to stow their quarterly distribution checks and being set up with several unnecessary accounts per capita. There were other cases, and dispiriting details.
The bank has been trying to channel new lawsuits away from the two million fake-accounts scandal, by moving them into private arbitration. We just received such a mediation offer and ignored it, having already closed the gratuitous account and shredded the card. Other customers, however, are indeed pursuing litigation.
Meanwhile, the revelations continue. Recently several plaintiffs have claimed that Wells Fargo changed the mortgage terms of bankrupt borrowers without their knowledge, much less their consent. Generally the changes meant smaller payments over longer time periods—but with immense finance charges accruing to the bank. As the New York Times reported in June, in its best imitation-tabloid style, “Wells Fargo, the $270 billion California- based lender, is driving its stagecoach further into the mud.”
Also in June, Senator Elizabeth Warren sent a letter, this one to Federal Reserve Board chair Janet Yellen, demanding the removal of twelve Wells Fargo board members who had been present and passive during the years when bank employees were setting up the infamous two million fake accounts. While 5300 lower-level employees were fired as a result of the scandal, $185 million fines had been paid, and the CEO sacked, the original Wells Fargo board members had remained in place, drawing their annual average base salary of $187,000— with bonus and additional compensation, $319,000. (An average Wells Fargo “personal banker” makes $37,000, a teller, $25,000. Why would one use “K” to signify all those thousands?)
Wells Fargo had been cited earlier for poor loan-servicing and foreclosure practices. In 2012 it was among the five lenders agreeing to a $25 billion settlement with the federal government and 49 states, to rectify these “poor” practices. In 2015 it settled $1.2 billion against claims of reckless lending under a Federal Housing Administration program.
Elizabeth Warren’s letter was not nearly as polite as mine, which may be why a super-pac has promised $10 million to “Deal Her Out” of re-election in 2018.
Meanwhile, it’s taken months to find what we hope are ethically (and fiscally) sound financial institutions, and to complete the tedious maneuvers of rerouting into new accounts our network of monthly payments to utilities, college funds, subscriptions, charities. Rerouting our monthly deposits was the easy part.
Why are we doing this, when we could be using more time to address climate change or health care, or at least to haranguing our legislators? Here’s the thing: our votes and our protests often seem more self-righteous than effective because they originate in the bright blue state of California. Our state is viewed quite negatively, it is clear, by the present Potus and his cronies—and with good reason, we hope.
Choosing not only where we spend our money, but where we keep it and who uses it, seems valuable leverage just now, in this thoroughly unhinged capitalist democracy.
To be continued, for better and for worse.