Liz Warren's Baby Busts Well Fargo ...

... Trump and the GOP, "Abolish it!!".

The way it worked was that employees moved funds from customers' existing accounts into newly-created ones without their knowledge or consent, regulators say. The CFPB described this practice as "widespread." Customers were being charged for insufficient funds or overdraft fees -- because there wasn't enough money in their original accounts.

Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their customers' knowledge or consent. Roughly 14,000 of those accounts incurred over $400,000 in fees, including annual fees, interest charges and overdraft-protection fees.

The CFPB said Wells Fargo will pay "full restitutions to all victims."

Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.

http://money.cnn.com/2016/09/08/investing/wells-fargo-created-phony-accounts-bank-fees/

Consumer protection agencies in general have, as we know, virtually always been the "babies" of Democrats, whether federal or state, and they've done a world of good in protecting the little guy.   Even the smoothest-running, most productive capitalist society needs regulation to prevent runaway greed and criminal practices such as this story so clearly illustrates.

http://www.truth-out.org/buzzflash/commentary/banks-get-tax-deductions-for-paying-out-huge-bonuses-to-execs-new-report-reveals

The Institute for Policy Studies in Washington, DC released a report yesterday that details how taxpayers are subsidizing banks and massive CEO bonuses. The 34-page "Executive Excess 2016: The Wall Street CEO Bonus Loophole" confirms that Wall Street financial firms and their executives make out like bandits at the expense of everyday taxpaying Americans:

The more U.S. corporations hand out in CEO bonuses, the less they pay in taxes. This is the result of a loophole that allows firms to write off unlimited amounts of executive pay from their federal taxes, as long as it is in the form of so-called "performance-based" compensation.

Wall Street banks [only temporarily] lost this lucrative CEO pay subsidy when they received taxpayer-funded bailouts in the wake of the 2008 crash, but only until they repaid the funds. Many of them rushed to do so, borrowing in the private market in order to escape this and other public bailout-related pay controls. While homeowners and shareholders were still suffering, the banks were free once again to dole out massive bonuses and write off the entire cost, leaving ordinary taxpayers to make up the difference....

After getting out from under the bailout limits on deducting executive pay, the top 20 U.S. banks paid out more than $2 billion in fully deductible performance bonuses to their top five executives between 2012 and 2015. At a 35 percent corporate tax rate, this translates into a taxpayer subsidy worth more than $725 million, or $1.7 million per executive per year. That $725 million could’ve covered the cost of hiring 9,000 elementary school teachers or creating 13,000 infrastructure jobs for a year.

"Taxpayers should not have to subsidize excessive CEO bonuses at any corporation," lead report author Sarah Anderson, director of the institute's Global Economy Project, noted in an email announcing the findings. "But such subsidies are particularly troubling when they prop up a pay system that encourages the reckless behavior which caused one devastating national crisis -- and could cause more in the future."

The advocacy organization Take On Wall Street, a project of the Communication Workers of America, urges an end to tax exemptions for bank CEOs' "performance-based" bonuses:

While companies squeeze every penny they can get out of workers’ pay, a few top executives receive massive bonuses. What’s worse, if these massive bonuses are linked to "performance," corporations can deduct the massive payments as an expense on their federal taxes. This loophole encourages inflated payments, usually in stock shares, and increases the CEO-to-worker pay gap.

Take On Wall Street also cites three key reasons that the tax-deductible bonuses should be eliminated:

CEOs push for risky policies that drive up short-term profits in order to get a bigger This drive for immediate profit led Wall Street banks to make huge financial gambles, contributing to the massive crisis in 2008.

By eliminating the tax deductibility of multimillion-dollar "performance bonuses" paid to corporate CEOs, we can take a major step towards encouraging more modest executive pay.

Closing the loophole can raise real money—estimated at as much as $50 billion over the next decade that could allow all students to refinance their student loans, helping end the cycle of student debt.

The first point should be a central concern in avoiding an economic meltdown such as the one in 2008. If bank CEOs are looking to boost profits and stock prices, they are more likely to take greater risks. So not only is the performance-pay loophole payed for, in part, by taxpayers, the way it is structured poses perils for the economy.

In a 2013 Forbes column on performance pay, Rick Wartzman warns of companies -- in general -- utilizing massive bonuses as incentives:

How is "performance" being defined? Linking a CEO’s pay to a company’s bottom line or the trajectory of its shares is, arguably, better than having no measure in place at all. Still, as has become abundantly apparent in recent years, this approach carries its own risks, especially if it prompts executives to think too much about goosing earnings in the short term at the expense of the long-term health of the enterprise.

"You have to produce results in the short term," [Peter] Drucker [has] asserted. "But you also have to produce results in the long term. And the long term is not simply the adding up of short terms."

This fear is compounded when applied to companies in the financial area, because the very stability of our economy is at stake.

*******************

These battles are important. The idea that a president will solve all problems not so much. We need Congress to get off their collective asz and start working for America.

Wells Fargo Just Made The Case For Elizabeth Warren’s Bank Agency

Wells Fargo just proved, again, that no scam is beneath America’s financial institutions. And no institution is above being watched by a federal agency.

On Thursday, the Consumer Financial Protection Bureau ― the watchdog group proposed by Sen. Elizabeth Warren (D. Mass.) in the aftermath of the financial crisis ― announced that Wells Fargo would pony up a total of $185 million for perpetrating a huge scam on its customers.

Over at least the past five years, Wells Fargo employees created more than 1.5 million sham checking accounts and applied for 565,000 credit cards, using customer names and money. Customers were charged unnecessary fees, saw their credit scores fall or were simply confused when debit and credit cards they never asked for showed up in the mail.

“Was the Great Financial Crisis so long ago that all chasteness and propriety are already out the window? This scam has been apparently going on for five years,” writes Josh Brown, a financial blogger. “These people are fearless.”

The CFPB has come under intense criticism from Republicans, who say it’s a drag on business. Many ― including presidential hopeful Donald Trump and his running mate, Indiana Gov. Mike Pence ― have said they would like to see the agency abolished as part of their intended dismantling of the 2010 Dodd-Frank legislation passed to prevent another economic meltdown.

But every time the agency exposes wrongdoing in consumer banking ― as it did on Thursday ― the CFPB offers a strong counterpoint to those arguments.

The job of the CFPB, now headed by Richard Cordray, isn’t to regulate the hot new derivative investment banks are peddling to hedge funds. It’s to protect ordinary people from the kind of everyday scams that financial institutions have shown again and again that they will commit if no one is watching. The agency oversees a myriad of businesses like consumer banking, debt collection and payday loans that hundreds of millions of Americans use every day.

It’s had an impact. Last year, the CFPB fined Citibank for illegal credit card practices after the bank was found to be charging customers for benefits they didn’t receive. It’s uncovered student loan fraud and financial products that take advantage of the elderly, and is looking to crack down on the payday loan industry.


http://www.huffingtonpost.com/entry/wells-fargo-fraud_us_57d2d237e4b03d2d459a083c

I wonder how much each person who had a false account set up gets in the settlement.