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John Stumpf's Wells Fargo Racket Shows Why Bank Workers Need a Union

Originally published in The Daily Beast

By Keith Ellison

Wells Fargo Bank committed a scam that stole from its customers, inflated its stock price, and lined the pockets of its top-level executives. Those same executives pinned the whole thing on their low-level employees – people making as little as $12 an hour. Thousands of them were fired from their jobs.

Wells Fargo CEO John Stumpf should take responsibility for the fraud and resign, but not before making it right for workers who were fired for failing to meet unattainable sales quotas.

Earlier this summer, the Congressional Progressive Caucus, along with the Communications Workers of America and the Committee for Better Banks, organized a briefing on the National Employment Law Project’s report titled Banking on the Hard Sell: Low Wages and Aggressive Sales Metrics Put Bank Workers and Customers at Risk. During the briefing, former Wells Fargo teller Khalid Taha spoke about how the constant pressure to open new accounts for customers led to him being hospitalized for exhaustion. Oscar Garza, a former JP Morgan employee, testified that he was instructed to open accounts “at any cost.”

A staffer in my Washington, DC office also spent three years at Wells Fargo as a teller. After initially refusing to sell products he felt his customers (many of whom were non-English speakers) didn’t need, he was constantly pressured by managers and personal bankers to “up his numbers.” He was openly derided during meetings where the branch’s sales scoreboard was unveiled in front of the entire staff.

Many workers were threatened with termination if they failed to meet unrealistic sales quotas. When workers are pressured to open fake accounts or falsify information to keep their jobs, something is fundamentally wrong in that corporate culture.

In order to end these predatory practices, financial services sector employees should be given a seat at the table and allowed to collectively bargain. This will protect them and their customers. No company should force workers to make a choice between selling potentially harmful products to their customers and keeping their paycheck.

If it weren’t for the brave Wells Fargo employees who put their jobs on the line to bring the truth to light, we might never have known about this racket. Many who disagreed with the practice blew the whistle to the Consumer Financial Protection Bureau, whose sole purpose is to protect consumers in the financial sector. And since the revelations, many more Wells Fargo workers have come forward with stories about their work experience at the bank, including one who was fired after calling their “Ethics Hotline” to report managers who encouraged employees to falsify information.

If these workers had been part of a union, there would have been a more powerful force pushing back on these exploitative management practices. In addition to supporting investigations by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Securities and Exchange Commission and the Department of Justice, we should also empower financial services sector employees on the job. This will help clean up the commercial banking industry and ensure that bank workers and customers are treated fairly.

The CFPB fined Wells Fargo $185 million dollars and ordered the banking giant to pay full refunds to customers who incurred fees on unauthorized accounts or credit cards. Wells Fargo will also hire an independent consultant to review its sales procedures and institute ethical-sales training to stop fraudulent sales.

Over the past 5 years, the CFPB has returned $12 billion to 27 million people who were taken advantage of by financial institutions. The Bureau is an important ally for consumers, but Republicans don’t think so. They are actively trying to defund the CFPB at every step. Why would we leave people vulnerable and let Stumpf and Wells Fargo get away with their scam?

Stumpf appeared before the Senate Banking Committee last week and faced some tough questions. He said he didn’t know this was going on and that Wells Fargo was making it right by firing 5,000 workers.
Doesn’t this sound familiar? Another financial sector CEO refusing to take responsibility for the illegal activity that happened under their watch, and blaming their workers. If we were to believe Stumpf’s professed ignorance —and I don’t — a union would have made sure Wells Fargo executives knew about these abusive practices and stopped them.

Stumpf earns $19.3 million a year. That’s 473 times what a bank teller at a Wells Fargo branch takes home. He wants us to believe he and the rest of his board aren’t responsible for this racket? I don’t think so. If you take home that much money, I think the buck should stop with you. Isn’t that the point of having a CEO?

Let’s support the workers so they can focus on their customers, and report wrongdoings without fear of losing their jobs.

We must clean up the banking industry. Let’s start with Wells Fargo.