We have come a long way from the days when leaders placed small plaques on their desks with the motto popularized by Harry Truman, “The buck stops here.” It’s a good guess that Wells Fargo CEO John Stumpf does not have such a plaque on his desk.
After a $185 million fine against the fourth-largest US bank for secretly opening up bank, credit, and debit card accounts under the names of their customers without their authorization, Wells Fargo fired around 5,300 employees connected to the wide-spread fraud. Wells Fargo CEO John Stumpf, however, continues to resist calls for his resignation.
According to the Consumer Financial Protection Bureau’s report, violations committed by Wells Fargo included:
- Opening deposit accounts and transferring funds without authorization: According to the bank’s own analysis, employees opened roughly 1.5 million deposit accounts that may not have been authorized by consumers. Employees then transferred funds from consumers’ authorized accounts to temporarily fund the new, unauthorized accounts. This widespread practice gave the employees credit for opening the new accounts, allowing them to earn additional compensation and to meet the bank’s sales goals. Consumers, in turn, were sometimes harmed because the bank charged them for insufficient funds or overdraft fees because the money was not in their original accounts.
- Applying for credit card accounts without authorization: According to the bank’s own analysis, Wells Fargo employees applied for roughly 565,000 credit card accounts that may not have been authorized by consumers. On those unauthorized credit cards, many consumers incurred annual fees, as well as associated finance or interest charges and other fees.
- Issuing and activating debit cards without authorization: Wells Fargo employees requested and issued debit cards without consumers’ knowledge or consent, going so far as to create PINs without telling consumers.
- Creating phony email addresses to enroll consumers in online-banking services: Wells Fargo employees created phony email addresses not belonging to consumers to enroll them in online-banking services without their knowledge or consent.
One might think that the CEO of an institution caught committing such fraud would resign voluntarily, but such noble acts of responsibility are rarely seen these days, especially when one realizes just how much money these titans of finance would be walking away from.
In 2014, Mr. Stumpf’s compensation was $21.4 million. Now, it’s hard enough to storm out of a job when you’re making $30K a year, but try doing that when you are getting paid nearly $2 million a month.
Principles and taking responsibility for man-made disasters that occurred under your watch simply become too expensive. And, besides, if you simply ignore those calling for your resignation and stubbornly refuse to leave your position, eventually the throng of protesters will move on to the next outrage.
So Mr. Stumpf will predictably take the same position of defiance that Walter did in The Big Lebowski, refusing to leave the coffee shop after being asked to do so. “I’m staying. I’m finishing my coffee.” In case you need a visual on how Mr. Stumpf intends to respond to those calling for his resignation, perhaps this will help:
