Wells Fargo All About Serving Customers? Not So Much, Mr. Stumpf.

“People are surprised when I say this: Our number-one goal when we get up in the morning is not about making money. It’s about serving customers.”
~John Stumpf, Wells Fargo

If you’ve done business with Wells Fargo in the past 10 years or so – especially if you’ve had a mortgage or other loan “serviced” by WF – you know what a huge line of BS John Stumpf is feeding CNBC’s infotainment “investment analyst” Jim Cramer in this clip.

The former Wall Street hedge fund manager has to be particularly blind and deaf if he believes that Wells Fargo hasn’t taken part in the same list of ethically-reprehensible activities designed to defraud customers and make money for the bank: robosigning, forging foreclosure documents, predatory mortgage lending in minority communities, manipulating debit card transaction to generate overdrafts, and forcing mortgage borrowers into price-gouging home insurance.

The company even gets complaints for its handling of student loans and paid to settle a lawsuit regarding its debt-collection processes by harassing consumers, who are generally protected by specific debt-collection law. How Cramer can appear to be such a cheerleader for Stumpf & Co. in light of all this is beyond me, but he certainly seems to take everything the CEO says as absolute truth.

Certainly Stumpf wasn’t being entirely truthful when he told Cramer that the good and noble Wells Fargo wasn’t making all those dubious “liar loans” like other mortgage banks. Apparently they lost so much money resisting the temptation to create all sorts of mortgages people were unlikely to ever pay back that when the economy went bust they could buy out another bank of roughly equal size. Hmmm.

“So there was times between 2000 and 2008 where other mortgage lenders,
as an example, were making loans with nothing down, no verification – the so-called liar loans. And we didn’t participate in most of that.
So we gave up billions of originations, hundreds of millions of profibut then when everything came apart, we were able to use out capital to buy out Wachovia.”
~John Stumpf, Wells Fargo

wellsubprimeActual facts fail to support the image of Stumpf on a white steed, riding above the greed-fest that was the mortgage business in the years before the crash. Statistics compiled by the Center for Responsible Lending in a 2004 report show subprime lending going gangbusters at Wells Fargo by 2003. Between 2005 and 2007, the bank made the subprime producers’ top 10 list.

The Consumer Financial Protection Bureau certainly knows Wells Fargo is no angel when it comes to treatment of customers. Its September monthly complaint reports places WF in the top three banks consumers across the country have issues with regarding both mortgages and the top two regarding debt collection.

And here’s a list of consumer complaint websites, where you can pretty much plug in “Wells Fargo” with whatever topic you like to find people the bank has jerked around.

So, pretty sure that Stumpf the Sanctimonious and his faithful sidekick Cramer the Credulous are telling a blatantly fictional tale about the all-powerful but beautifully benevolant Wells Fargo Bank. Do yourself a big favor and don’t listen to either one of these guys. And, by all means, do not do business with or invest in this lying, cheating bank.

Even the FDIC Covers for Bad Banks?

The banks are being aided and abetted in their greed frenzy by pretty much every power center you can imagine: by the President, Congress and the judicial system. By the Treasury Department and the Office of the Comptroller of the Currency and most of the state attorneys general.

For homeowners beset by predatory mortgages and fraudulent foreclosures, there aren’t many allies left standing. Elizabeth Warren and Elijah Cummings in Congress. Eric Schneidermann, if he comes through. The Consumer Financial Protection Agency, we hope. And, of course, our old friends at the FDIC.

We’re taught from the time we open our first savings accounts as children or teens that the FDIC, the Federal Deposit Insurance Corp., is looking out for us, ensuring the money we deposit in financial institutions is safe and secure. Yep, the FDIC exists to serve consumers in case of bank insolvency or wrongdoing. Or not.

Turns out this purported regulator of the financial services industry isn’t looking out for us at all. In fact, it’s helping banks cover up their dirty deeds and has been for years. From the LA Times article on the subject:

“Critics describe the FDIC’s current practice of low-profile deal-making as a major departure from the S&L crisis.

“‘In the old days, the regulators made it a point to embarrass everyone, to call attention to their role in bank failures,’ said former bank examiner Richard Newsom, who specialized in insider-abuse cases for the FDIC in the aftermath of the S&L debacle. The goal was simple: ‘to make other bankers scared.'”

I’d just like to know what agency exists today that can make bankers scared of any of the sins they commit against their customers. Or a so-called regulator that actually looks out for the average citizen.

How can I make informed decisions about the financial institutions I trust with my money if the agencies tasked with informing me are actually in league with the industry to cover up wrongdoing? With the technology available today, I should have no problem steering clear of any company that doesn’t routinely do business fairly, ethically and legally. Yes, I can easily access a list of failed banks on the FDIC website. I should also be able to find information about banks that have been investigated for and found guilty of any kind of wrongdoing.

I should, for example, be able to access regulator’s databases for information on complaints against banks as easily as I can search at my local Better Business Bureau’s site. There I can find out whether a business I’m considering patronizing has a good rating or has been subject to customer complaints.

More important, I can also learn a bit about those complaints and how they were handled.  Now one or two successfully closed complaints won’t necessarily cause me to shun a company. On the other hand, the fact that more than 5,500 complaints against Wells Fargo Bank were reported to the BBB over the past three years might give me pause. Especially because even with the BBB’s intervention, more than 800 of those were not resolved to the customer’s satisfaction.

Meanwhile, my credit union has an A+ rating from the BBB and has had zero complaints of any kind over the past three years. None. Not one.

By the way, while I was on my local BBB site I pulled up nationwide complaint and inquiry statistics for 2012 and found that banks and banking services generated nearly 500,000 consumer complaints, financial services created more than 800,000 public contacts and mortgage bankers, brokers and lenders together accounted for more than 2 million consumer inquiries and complaints.

And that’s just problems reported to the BBB, which admittedly doesn’t have the cachet or the influence to right consumer wrongs that it did a decade or two ago. But, apparently unlike most of the country’s attorneys general and seemingly every single bank and financial services regulatory body out there (including the FDIC), at least the BBB is still on the side of consumers. I think.

FDIC Secretly Settling Bank Cases For Years With ‘No Press Release’ Clause

NPR Fail on CFPB Story

NPR: New Consumer Protection Agency Faces Opposition

In all my years listening to NPR, I can’t recall ever hearing a story that seemed so naive, so ridiculously superficial, as Tamara Keith’s piece today on the launch of the Consumer Financial Protection Bureau.

Anyone who has been paying any attention to the creation of this agency knows banking interests have been fighting tooth and nail to discredit its architect, Elizabeth Warren, and render the agency impotent.

So, what does Keith say about that? After we hear Warren talking about the forces allied against the agency and its central mission to provide clarity and transparency in the information consumers receive regarding transactions such as choosing credit cards or securing mortgages, the reporter states: “Now you might think powerful forces are rising up to fight these changes. But that would be wrong.”

She goes on to feature a lobbyist for the Financial Services Roundtable, where top executives from huge banks and investment companies meet to advocate for their own industry, who says the big banks are all for the CFPB’s attempts to simplify disclosure forms?

“In fact, so far [lobbyist Scott] Talbott says the industry has been pleased with the direction the bureau is heading,” Keith reports.

So, what’s the obvious next question? How about asking if this better disclosure is so universally good for lending institutions and consumers, why does a consumer-advocate agency have to suggest it? If the top executives in the industry are so keen on the benefits of better disclosure documentation in financial transactions like mortgages and credit cards, why haven’t those very people already created and offered them to their customers? Duh.

Could it be that lobbyist Talbott is, shall we say, taking Keith for a little spin on his “banks-love-oversight” magic carpet? If banks loved oversight – and if any meaningful oversight of banks existed in this country today – the economy wouldn’t be in the tank and millions of Americans wouldn’t be kicked out of their homes based on fraudulent paperwork.

Though she mentions political opposition to the CFPB, Keith completely ignores the giant elephant in the room. All those big banks and investment companies have bought and paid for a good number of Congressmen and -women who have been fighting a pitched battle to weaken the bureau and to prevent Warren from being named its head.

Those people include Rep. Spencer Bachus (R-AL), chairman of the House Financial Services Committee and the sponsor of a bill that would, in Warren’s words, “rip the arms and legs off this agency.” In fact, Bachus ranks third on the list of candidates that received campaign contributions from the Financial Services Roundtable. And, though he has run virtually uncontested during his tenure, Bachus has still taken in more than $1 million in campaign contributions from commercial banks, more than $700,000 from securities and investment firms and nearly $400,000 from finance and credit companies.

Among his top contributors are JP Morgan Chase and Citigroup, along with the Mortgage Bankers’ Association, one of a cadre of banking-industry organizations that oppose the CFPB.

I’m a big fan of NPR, but for me this story disintegrated into a puff piece as soon as the lobbyist started to speak. I expect better from NPR.

Update: Read more about the multimillion dollar fight against financial regulation:

OpenSecrets Reports: Crossing Wall Street
Consumer Bureau Launches in Shark-Infested Waters