I remember the day like it was yesterday: September 3, 2011. I had turned 18 the day before and was now walking into my local Wells Fargo branch to open my very own checking and savings account. I recall feeling a weight of responsibility: my account, my money, my savings. The personal banker who came to sit with me provided agreeable service, and facilitated the process. I rejected his offer to open up a line of credit (I had just begun my senior year of high school days before), though he proved persistent. I walked out with an expectation that my new debit card and checkbook would arrive any day in the mail, and I anticipated depositing the meager amount of money I’d received for my special birthday. I could now vote, join the army, and open a bank account on my own.
I’d never had a problem in my interactions with the bank. I lost a debit card in 2012 while at college and the bank quickly replaced it. No doubt I’d found the overdraft fees to be somewhat harsh considering I always quickly covered the differences; ATM fees struck me as vampire-like as they slowly drained my skimpy finances. These problems seemed incidental though, just a part of doing business.
I initially chose Wells Fargo for a number of reasons. First, name recognition: Oh the Wells Fargo wagon is a-comin’ down the street. I’d seen the bank around me all my life. Like myself, the bank seemed California-bred. Most importantly though, for whatever reason, rational or not, I had the vague impression that Wells Fargo represented a financial institution that behaved relatively responsibly during the build-up to and aftermath of the 2008 meltdown. Three years later, this vague impression manifested into a fledgling relationship. I now became their creditor.
The news began to trickle out a few days ago, and for all I could tell seemed local to Los Angeles. The LA Times had initiated the investigation into the scandal, and it was the Los Angeles City Attorney that first sued. Then I heard the Senate Banking Committee plans to investigate, and I decided this may be news worth paying attention to. In short, as I understood it, aggressive sales incentives resulted in a large number of low-level retail employees opening up unwanted accounts unbeknownst to consumers in order to bolster sales numbers. To my knowledge, nobody had lost any money, but that stood as pure conjecture: I had no idea.
So, more to satisfy my curiosity than anything, I returned to that same branch where I’d opened up my account five years earlier. I walked up to the teller, and made it clear that I wanted to find out if any accounts had been opened in my name that I hadn’t explicitly requested. The teller agreed to check, though with a tone that seemed to suggest it was endearing that what I’d heard in the news had prompted me to come investigate. They noted the debit card I’d lost and closed in 2012, and then proceeded to tell me about the remittance account I’d opened in 2011.
My chest dropped. A personal banker came over to assist the teller when he’d noticed this was not to be a typical interaction. As I struggled to not become irate, they together asked me: Had you planned to travel? Are you sure you don’t understand what a remittance is? Are you aware that the account only has your name on it? The account closed within a few months of opening it, are you sure you didn’t open it?
Between September 3, 2011, and the end of that year, a remittance account to the Philippines opened and closed under my name and personal information. I have never been to the Philippines, nor do I know anybody that lives there. Yet here I was, in perhaps one of the most asinine encounters of my life, five years after the fact, explaining to this teller and personal banker that I did not do that. No proof existed to demonstrate that I hadn’t opened that account and had nothing to do with its existence save my name being attached to it. The account had been closed: What could these two low-level employees do for me?
I stormed out dismayed and angry. I hadn’t lost any money to my knowledge, though this occurred five years ago, so I really had no way of telling. That wasn’t what angered me though. In light of the information coming forward out of this scandal, I could just imagine what had happened five years earlier. I was young, naïve, and eighteen. I had a meager amount of money, and I would never know the difference if an extra account opened up under my name. No money lost, no harm done. But looking back, I couldn’t help but feel gullible, stupid, and worst, preyed upon.
But this scandal proves much bigger than some snot-nosed teenager going to the bank for the first time alone. A whole two million accounts were created under similar pretenses. 2,000,000. I looked in the daily issue of the LA Times, and saw the CEO and CFO had both leaped into crisis-control mode. The CEO “said he was fully accountable for the problems but does not plan to resign.”
Fully accountable. Right.
But it was the deflection of CFO John Shrewsberry that most agitated me. In his own words, “It was really more at the lower end of the performance scale, where people apparently were making bad choices to hang on in their job.”
Most people at first response seemed to tow this line: Low-level retail employees commit the fraud, don’t blame the company for providing a benign ‘incentive.’ First, the announcement of the end of sales goals at the bank directly contradicted this interpretation. Sales goals, or incentives, proved the disease. It was the deflection to workers that most upset me.
Anybody who has worked a low-level retail job with sales incentives knows how pernicious the system is. “Incentives” acts as a code word for “get close to this number, exceed it, or you are a failure at this low-paying work, you oaf.” This system captures wage-earners and vulnerable consumers in a vicious cycle. I should know: I spent a good amount of time during my college years shoving Barnes and Noble discount “Membership” programs down consumers’ throats. I had to ask every single customer, under threat of discipline, if they wanted a membership. If they’d come in for a book on how to save money, I asked if they wanted to buy into a program I knew they’d lose money in. The dual dehumanization of this system stands obvious to each and every person that has engaged it at some point in their life.
It comes as no surprise that Wells Fargo admits no wrongdoing in the settlements they’ve reached. The refusal of CEO John Stumpf to resign continues the precedent of executive impunity. The deflection to low-level wage earners conforms with placing the blame on the working class.
More than anything, I hoped to voice these sentiments. Coming from a person who has participated in this scandal and the system that wrought it from each angle, I felt I could offer a holistic diagnosis of the current problem, yet I have no prognosis. If you bank with Wells Fargo, I highly recommend you go in and check to see if this has happened to you.
I wouldn’t have known if my curiosity hadn’t provoked me. There were, after all, two million of these fraudulent accounts set up. There are plenty of us. Moreover, as creditors to this financial institution, we should put more pressure on Mr. Stumpf to resign and demonstrate his accountability. Finally, we should each ask ourselves if we really believe this entire scheme was not “designed to increase the bank’s revenue.”
Yet again, a criminal episode legitimately predicating populist anger most likely will result in nothing. Wells executives are going before the Senate Banking Committee next week: Don’t hold your breath. Time and again this country proves institutions like Wells Fargo are too big to fail. The gullible eighteen-year old with birthday savings? He’s too small not to fail.
Photo: The Wells Fargo Bank building in San Francisco, Calif. | AP