Smart About Money: Rogue Banks

I never thought I’d find myself writing those words. But as more news comes out about what Wells Fargo was doing to its customers, that’s the only way to describe them. Wells Fargo was a rogue bank.

In order to show ever-increasing marketing share and revenue growth to Wall Street, Wells Fargo put so much pressure on its branch staff to “sell” that those folks not only steered customers into bank products they didn’t want or need; Wells Fargo branch staff actually went so far as to open accounts without customers’ knowledge or permission.

They benefitted themselves to the detriment of their customers, “forging client signatures on paperwork,” according to the Los Angeles Times, and opening “ghost” online banking accounts with weak passwords in customers’ names. Unbelievable! But unfortunately true.

The CEO says that was “not the Wells Fargo culture.” Of course it was their culture! This went on for more than five years. He lays the blame on “bad employees” and says this unwanted cross-selling was all news to him.

Perhaps that’s true. But as a bank CEO myself, I would consider it to be my responsibility to know about that sort of pervasive unacceptable behavior. In the time I was honored to serve in the military, I was taught a principle of leadership that has always been the gold standard to me: “A leader is responsible for everything their people do, and everything they fail to do.”

Pennsylvania Senator Pat Toomey put it very clearly to the Wells Fargo CEO at the opening day of congressional hearings into Wells Fargo’s actions last month. “This isn’t cross-selling,” Toomey said. “This is fraud.”

In an era when we have seen no end to bad behavior from large, publicly held banks, this latest revelation about Wells Fargo is certainly the worst thing I have ever heard that a bank has done. It was flat-out wrong. The fact that they treated their staff so shabbily bothers me too.

I understand that as a stock bank, Wells Fargo’s primary fiduciary duty is to their stockholders. What I have simply never understood — what I never will understand — is why the large stock banks can’t seem to see that treating customers and staff right is the best way to serve stockholders too.

What can you do to protect yourself from a rogue bank looking to please Wall Street no matter what the cost to customers?

First, wherever you bank, it is critically important to monitor your accounts either by using online banking or by taking a good look at your paper statements every single month. If you see a charge or a fee you don’t recognize, talk to your bank immediately. Honest mistakes do happen. But only you can watch for a pattern of problems with your accounts.

And consider whether it really benefits you to be with a large, publicly held bank. Because no matter what they say, Wall Street comes first with them, not customers.

Maybe you’d be better off with a local, independent bank — the kind of bank where valued employees stay for years, becoming trusted and knowledgeable resources in their communities; a bank where customers actually do come first.

Nick Maffeo is the president & CEO of Canton Co-operative Bank in Canton. Have a question? Email to submissions@thecantoncitizen.com.

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Posted by Nick Maffeo on Oct 7 2016. Filed under Featured Content, Opinion, Smart About Money. Both comments and pings are currently closed.