The Customer is Always Wrong

Where it comes to defunding the Consumer Protection Agency, lifting pollution bans that protect the air we breathe or the water we drink, unraveling the consumer-protection specifics of the Dodd-Frank law, upholding one-sided and non-negotiable employment and financial consumer arbitration clauses, and generally removing restrictions that benefit the “little guy” and encumber the “big corporate guy,” the Trump administration almost uniformly protects the larger corporate interest and rejects regulations and laws that protect consumers.

We’ve watched with horror as Wells Fargo Bank stood accused… and then completely admitted those accusations… of creating thousands and thousands of completely unauthorized accounts for the individual customers, billed for those unauthorized services, and generally “cross-selling” unwanted banking services to make the bank look better to its shareholders. The pressure on junior and mid-level managers was to churn their customers to generate more revenues to the bank. Bank managers who failed to generate the targeted revenue goals were simply fired. Wells was fined and sanctions were imposed.

Apparently, Wells was not the only one, but the difference now is that Trump appointees have taken over the responsibility of policing the banks, and they are now loathe to identify and prosecute the offenders. In effect, the fox has been control over the henhouse. The June 18^th Los Angeles Times explains how it works: “In the Trump era, we may expect financial regulators to not regulate. But we don’t expect them to regulate, find wrongdoing, and then conspire with the wrongdoers to cover it up. But that seems to be what’s going on at the Office of the Comptroller of the Currency [OCC], which oversees federally chartered banks.

“President Trump’s handpicked head of the OCC is Joseph Otting, former chief executive of OneWest Bank. Otting has decided to run interference for his CEO buddies, concealing evidence of a potential replay of the Wells Fargo fake account scandal.

“Earlier this month, Otting’s office was forced to reveal some basic findings from an OCC review of sales practices at more than 40 large and midsize banks, triggered after Wells Fargo admitted to opening millions of accounts without customer consent. Thomas Curry, President Obama’s OCC chief, initiated the review, and Otting completed it in December.

“Since then, OCC had said only that it found no ‘systemic issues.’ But in fact OCC did unearth examples of other banks opening unauthorized accounts. In fact, it flagged 252 ‘matters requiring attention’ and five ‘industry-wide’ issues. I’m using frustratingly vague terms like ‘other banks’ and ‘industry-wide issues’ because nobody outside the OCC knows which banks were cited, or for what behavior, or whether any were penalized.

“Otting revealed a little more while testifying on Capitol Hill last week. Roughly 20,000 accounts were found to be out of compliance, he said, at least half of them unauthorized, out of 500 million accounts studied. Otting said this low ratio proved the issues were not pervasive… Asked repeatedly to make the banks’ names public, Otting contended that would be ‘inappropriate.’ In other words, the industry’s lead regulator believes that for banks, breaking the law is a trade secret.

“The out-of-context numbers also fail to provide enough information to understand the problem. For example, the OCC looked at more than 40 federally chartered banks with over $10 billion in assets; did that subset include giants like Bank of America, JPMorgan Chase and Citibank, or not?

“The OCC also reviewed only three years of account openings, but Wells Fargo kept finding more fake accounts the further back they went, eventually settling on 3.5 million since 2002. It’s also unknown whether the OCC investigated other types of sales practices. Wells Fargo, for example, placed unwanted auto insurance on borrowers, overcharged service members for mortgages, and performed close to a dozen other abuses.”

This is classic Trump. Look at facts and then simply deny them or dismiss their importance. Otting identified hundreds of individual banking discrepancies and enough industry-wide abuses to keep us up at night but by simply stating that there are “no systematic issues,” after citing a boatload of  “systematic issues,” these abuses are trivialized and kept secret. As a practicing lawyer, let me make it abundantly clear that there is not the slightest legal justification for the OOC keeping those abuses from the public. None. While I may not be able to stop a rogue administration from itself abusing the public trust, I will continue to bring such anomalies to my readers’ attention.

I’m Peter Dekom, and is deeply disheartening to watch the American tradition of democracy to a heartless autocratic plutocracy with our President’s full and complete complicity.