When you think of the bank you think of trust and security. Even after housing market debacle that almost flat lined the American economy, people still have kept their trust in the banking system when it comes to storing their money. The banking model is quite simple, a person puts their money in a bank account, the banks invest their money by lending it out to others and the two parties enjoy the earned revenue from it (albeit the banks gets the higher return). Over the years this model has become diluted as banks have begun to diversify what they do. This diversification has led to numerous scandals involving various banks and their shady practices.
More recently Well Fargo has been the bank of conversation over the past couple of weeks. If you haven’t heard about it please all me to quickly fill you in. Wells Fargo CEO John Stumpf spearheaded and aggressive strategy which called for more Americans to hold Wells Fargo products. In order to ensure his vision was carried out he instituted quotas that he expected the bank employees to meet. This put a lot of pressure on Wells Fargo employees which eventually led to 1.5 million unauthorized deposit accounts and five hundred thousand unauthorized credit card applications. These unauthorized accounts led to an additional 2.6 million dollars of revenue for Wells Fargo.
Essential what Wells Fargo did was fraud and theft. The knowingly created accounts for people and as a result of these false accounts earned money from it. That’s a crime and those in charge should be in handcuffs. Unfortunately, white collar crimes like the ones above are punished by fines which in the case of Wells Fargo ended up being 185 million dollars. That may seem like a lot to the average person but to a bank that fine is simply a slap on the wrist. What makes this case more egregious is the fact that John Stumpf the CEO of the company is more than likely going to keep his job. Along with this, the person responsible for overseeing the carrying out of this fraud Carrie Tolstedt retired in the summer with 125 million dollars in compensation. The allegations were first touched upon in the summer she retired in.
As things stand now it looks like once again big business will get off once again. It’s sad that in this country the greedy are rewarded for taking advantage of the weak. Hopefully, more is done regarding this Wells Fargo situation, but as things look now I don’t foresee any future punishments. There must but stricter guidelines regarding crimes likes this, banks are supposed to be symbols of trust not greed and fraud.
