Hit 'em where it hurts

Wells Fargo CEO John Stumpf testifying before Congress
  *interesting sympathy ploy*

So Wells Fargo Bank, considered to be the most trustworthy of the mega-banks (a rather low bar), was caught opening millions of extra-services customer accounts that had not been requested, for which the bank received fees.  The Federales fined WF $185M for investor fraud as the upshot of their sleaze was to drive the stock price up, benefiting the bank management team.

But thanks to public pressure, 'da bank will not allow CEO Stumpf to keep his stock bonus for those years, nor any bonus he would otherwise be due this year.  They will be "clawing back" from him  $41,000,000.  THAT'S how you hurt a crooked banker!  A $185M hickey to a bank netting $5.7 BILLION a year (a 25.08% profit margin) is chump change.  $41M to a banker personally is an attention grabber.

Also, retiring WF executive Carrie Tolstedt, the banker who oversaw the community banking division where the fraud took place, is having $53M of her "happy retirement" money clawed back, too.  (Don't feel too sorry for her, though.  She'll still walk away with $77M for her previous 27 years of "servicing" *snicker*  WF customers.)

And now for the piece de resistance, several terminated former managers have filed a class-action lawsuit in the amount of $2.6 BILLION on behalf of themselves and roughly 5,000 other line workers who couldn't meet their quota of pushing customers into opening new extra-service accounts and were shown the door.

We're half way there.  Personally hitting their pocket books is a pleasant start.  Seeing a few of them behind bars would be Karma done right!  :)

S  

He who has the gold....needs to be watched carefully

Just kidding.  Not really.

If there was an Academy Award for "Most Despicable Way To Screw The Public" it would have to go to the big mega-banks.  This was in the weekend newspaper:

The FDIC and the Consumer Financial Protection Bureau are investigating the big banks for their role in helping the internet payday lenders rip off consumers.  The big banks don't loan money directly to ignorant/desperate borrowers (too much bad press), but they do enable the offshore-based payday loan sharks to withdraw money directly from borrowers accounts, even in those states (15 of them) where payday loans are illegal.

So what's in it for the banks?  People desperate enough to go to payday lenders generally have next-to-nothing in their bank accounts at any given time.  So the payday lenders withdraw money from borrowers accounts whenever they find a few dollars there, which means many of the customer's other checks are likely to bounce later.  

That triggers overdraft fees, bringing in hundreds of millions of dollars (soon billions as the internet payday lenders expand) to the banks.  Cha-Ching!

Even when consumers instruct their banks to NOT allow further withdrawals from their accounts (which by law they can do), the banks often take months before they begin following their customer's orders, charging their fees in the interim.

These payday lenders are being pursued by state attorney's generals for charging 500-1,500% interest, so they're moving away from their traditional brick-and-mortar storefronts to places such as Grenada, Belize, Malta, and the West Indies where they operate online out of reach of regulators, plus they get "lawsuit protection and tax reduction."  Nice folks, huh?  And the banks play an instrumental role in this ripoff.  Without their complicity the whole scam is pretty much straitjacketed.

Yeah, yeah, I know....nobody puts a gun to people's head and makes them borrow from these crooks.  And nobody makes addicts buy drugs from pushers, either.  Some people are just desperate, ignorant, easy marks.  These people aren't being served, they're being preyed upon.

And this very minute the banks are lobbying feverishly, asking us to trust them and relax the regulations that keep them in line.  They say they can "self regulate".

So big banks....you want us to trust you?  Then quit pulling crap stunts like this.

S

Do we dare hope?

I'm almost scared to say this out loud...er...put this in writing, but it looks like maybe our economy has turned the corner.  Job creations have been getting much better lately, unemployment is inching down, even state budgets are on more solid ground.  I realize a lot can still blow up in our face, but I'm genuinely feeling optimistic.  I read this morning that lowly Michigan...basket case Michigan!...has a $450M state budget surplus.  Texas has a $1.6B surplus, plus still has $7.3B is its Rainy Day Fund.  Par-tay!


So where's mine?  I read this morning that a settlement is near between state Attorneys Generals and the Axis of Evil II...that would be Bank of America, JP Morgan Chase, Wells Fargo, Citi, and Ally Financial.  It's gonna cost them $26B to settle mortgage abuse claims against them.  Some $$$ will go to the "victims", but who's looking out for those who kept their payments current and then saw their property values (their life savings?) fall through the floor?  Actually I'm not due anything as I saw this coming and bailed before it hit the fan.  I just feel better knowing the bastards (A of E II) got hit where it hurts, and not just a few measly million bucks, either.  Twenty Six BILLION dollars.  Shame it couldn't be a hundred and twenty six billion dollars.


I'm working from home today (if you call this work), waiting for it to rain.  It's been cloudy for several days now here in Dallas.  I'm almost feeling like a Seattlite.  So does that make me an astronaut?  (And here comes the big hook  :)


S

I'm not sure what to think of this....

Rinspeed, an aftermarket car customizer in Europe, proposes to make an add-on pod for a Smart car, making it capable of carrying more stuff.   Isn't the whole idea of a Smart car to travel light?  When it's hooked up it sorta looks like a  WWII German troop carrier.  Maybe a fake machine gun on top for effect?  Make the Highway Patrol think twice before stopping you, for sure.  

I also read in the paper where Wachovia, now part of Wells Fargo Bank, has agreed to pay a $148M fine to settle charges of illegal bid-rigging in years past.  That's it?  Really?  That would be like me robbing a bank (say Wells Fargo) of $1M, getting caught, and agreeing to pay a $500,000 fine.  And they say crime doesn't pay.  Ha!  I wanna see some "suits" busting rocks in the prison quarry!

Emma is doing much better.  Her digestive system seems to be performing as advertised.  Thanks for the prayers and good wishes on her behalf.

Hope y'all have a great weekend.

S