Reverse Robin Hood: Corporate crooks prey on consumers
If a gang of bandits burst into a Wells Fargo Bank and made off with bags full of money, they would certainly be sought by the police. After their apprehension and conviction, the perpetrators would undoubtedly be sentenced to extensive prison terms. This is so even if customers who happened to be in the bank lobby at the time of the crime suffered no harm more serious than a heightened sense of fright.
In the fall of 2016 it was discovered that Wells Fargo Bank depositors were being systematically robbed by bank officials who opened accounts without permission and charged customers fees for failing to comply with the banking terms. It was found that Fargo employees had opened about 1.5 million accounts and applied for 565,000 credit cards. When these irregularities were discovered, Wells Fargo was assessed $185 million in fines, but no one went to jail or even got a criminal record.
On her way out the door as the Federal Reserve Bank’s chairwoman, Janet L. Yellen imposed an even more punishing sanction on Wells Fargo. Until regulators are convinced that the bank has established adequate management procedures, Wells Fargo will be prevented from growing in size. This provision imposes a significant competitive disadvantage.
An estimated $100 million of the penalties were assessed by the Consumer Financial Protection Bureau, an agency that was established by the 2010 Dodd-Frank Act, which has also been putting pressure on payday lenders. According to data from the Center for Financial Services Information, revenue from payday lending has declined from $9.2 billion in 2012 to $5.3 billion in 2017 because of tighter CFPB regulations.
The audacity of the Wells Fargo robberies indicate that well paid business executives are not at all reluctant to steal from the working class Americans. The CFPB was established, with the committed assistance for Sen. Elizabeth Warren, to provide marketplace protection for average citizens. With the loss of Richard Cordray, the original director of the CFPB, Donald Trump plans to weaken the agency.
There seems to be a plan for the well-to-do to enrich themselves at the expense of hard working citizens. Black History Month is a good time for thoughtful Americans to become more concerned about uniting on economic issues than to be distracted by perennial racial matters.