Tags: Evidence | Bankers | Gone | Wild

More Evidence of Bankers Gone Wild

By    |   Friday, 11 May 2012 07:38 AM

The hypocrisy of our financial institutions is deafening.

Yolanda Quesada, a 58-year-old Milwaukee woman employed by Wells Fargo, was recently terminated.

Wells Fargo spokesman Jim Hines recently stated: "Because Wells Fargo is an insured depository institution, we are bound by federal law that generally prohibits us from hiring or continuing the employment of any person who we know has a criminal record involving dishonesty or breach of trust."

Apparently, the “criminal record involving dishonesty or breach of trust” involved a shoplifting incident 40 years ago when Ms. Quesada was 18 years old. It seems the punishment doesn't fit the crime. If the financial industry is intent on pursing these matters in this fashion, a consistent application is critical.

The financial industry is littered with individuals and institutions that have breached the sacred trust between them and their clients and society at large.

In fact, Wells Fargo is one of them.

David Montoya, the Inspector General of the Department of Housing and Urban Development, recently released a report concerning the activities of mortgage service providers including Wells Fargo. In response, Mr. Montoya stated: “I believe the reports we just released will leave the reader asking one question — how could so many people have participated in this misconduct? The answer — simple greed.”

The report singled out Wells Fargo for the following violations:

“Wells Fargo’s management quashed an independent study by a manager responsible for overseeing the affidavit process. The study had started to show that the document department was critically understaffed. “The midlevel manager was directed to stop the study and return to the practice of signing affidavits without reading or verifying data.”

“Wells Fargo did not establish a control environment which ensured that its notaries met their responsibilities under State laws that required them to witness affiants’ signatures of documents they notarized. We also interviewed 11 notaries, and they reported notarizing documents without seeing the person sign the affidavit. Some notaries told us that they let others use their notary stamp to notarize affidavits. Some notaries also told us that they notarized documents that were unsigned.”

Separately, Wells Fargo is under investigation for its treatment of minority borrowers and properties it owns in minority neighborhoods. In addition, it paid $148 million for systematically overcharging state and local governments.

It seems the industry is reliving the same narrative that recently brought the global economy to its knees.

JPMorgan Chase announced it anticipates a $2 billion loss this quarter based on a flawed trading strategy. Moreover, additional losses may be in the offing. JPMorgan Chase CEO Jamie Dimon indicated the strategy was "flawed, complex, poorly reviewed, poorly executed and poorly monitored…[N]et income in corporate likely will be more volatile in future periods than it has been in the past…[O]bviously we should have acted sooner.”

This behavior is a microcosm of how our country has unraveled over the past few decades. The most serious flaws in public policy and business practices are being duplicated in meticulous fashion and within such close proximity.

Our economic survival rests on a political transformation that places the interests of society over those in power.

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