A history of scandal.
This isn't Wells Fargo's first crooked rodeo. It was one of the worst actors in the nation's foreclosure fraud epidemic, eventually paying $1.2 billion in settlement charges.
It paid $175 million for racially discriminatory lending practices. As Assistant Attorney General (now Labor Secretary) Tom Perez wrote:
"An African-American wholesale customer in the Chicago area in 2007 seeking a $300,000 loan paid on average $2,937 more in fees than a similarly qualified white... A Latino borrower in the Miami area in 2007 seeking a $300,000 paid on average $2,538 more than a similarly qualified white applicant."
Perez called these added fees a "racial surtax."
Wells Fargo has also profited from the mass incarceration crisis and the detention of immigrants. A 2012 report from National People's Action, the National Prison Divestment Campaign, and the Public Accountability Initiative ("Banking on Immigrant Detention") detailed the bank's investment and lending ties with for-profit prison corporations -- companies that lobbied extensively for immigration and criminal justice policies that led to higher rates of incarceration.
And Wells Fargo was one of the last major banks to end its own payday lending practice, doing so only at regulators' insistence. A 2010 report showed that Wells Fargo was "a major financier of payday lending and is involved with financing companies that operate one third (32%) of the entire payday lending industry, based on store locations."
A 100-day plan.
A major figure in finance, New York Federal Reserve President William J. Dudley, spoke in 2013 of "deep-seated cultural and ethical failures at many large financial institutions."
Wells Fargo is that culture's new Exhibit A. But there are steps Hillary Clinton can move decisively to end the culture of lawbreaking and governmental indifference in her first 100 days. Steps she could take include:
1. Choose only strong, independent appointees -- not Wall Streeters. Clinton can ensure that her Administration will be free of those "deep-seated cultural and ethical failures" by choosing appointees who'll enforce the rules without fear or favor -- and by not appointing anyone from a major bank to a senior government position.
2. Reform the whistleblower program. Clinton should promise to upgrade and strengthen the system, which appears to have failed both the whistleblowers and the public in Wells Fargo's case. The Bank Whistleblowers Alliance has some proposals.
3. Investigate Stumpf's trades. If the SEC hasn't moved swiftly to investigate those trades, its already-embattled director has some explaining to do. But the next president must make sure that promptly opens an investigation into Stumpf's stock trading in the month before the 185 million settlement.
4. Investigate the 2 million phony accounts. The SEC and Department of Justice should also investigate Stumpf, his senior executives (including Sloan), and the Wells Fargo board regarding this account fraud.
5. Protect and expand the CFPB. Wells Fargo's crimes prove that we need the Consumer Financial Protection Bureau. It should be defended from the Republicans who seek to gut it. Its budget and oversight responsibilities should be expanded to meet the ongoing threat posed by criminal bankers.
6. Break up the big banks. We agree with Republicans and Democrats who say that Wells Fargo proves too-big-to-fail banks are still a threat to the economy. The next president should direct her Treasury Secretary to develop a plan to break up Wells Fargo and others of comparable size.