Nothing is more amusing than to see bi-partisan indignation picking the low hanging fruit to make it look as if the government has your best interests in mind.
Both sides of the aisle have gone ballistic over Wells Fargo’s internal fraud game where front-line employees resorted to opening accounts for additional services for customers that didn’t request them so they could meet high pressure sales quotas. That allowed C-level managers and everyone all the way to the top including CEO John Stumpf not only to justify bigger and bigger compensation packages but also pocket good-sized bonuses.
Customers complaining unveiled the internal fraud. To date, $2.6 million in authorized fees have been refunded while credit scores have been placed in jeopardy. Even bigger victims are shareholders. Not shareholders like Stumpf but the little guys like you and me who may have mutual funds that include Wells Fargo stock. Mutual funds represent the biggest source of stock market investment yet they have little say in how the companies they own interest in are run.
Now back to the ghost accounts. Here’s what the fallout has been to date: There were 5,300 Wells Fargo employees fired for opening fake accounts using existing bank customers’ information. Wells Fargo has agreed to pay federal and state fines totaling $185 million. Stompf and former retail banking executive Christine Tolstedt have forfeited $60 million in stock options between them under the bank’s so-called “claw back” rules for executive malfeasance. Tolstedt also will not receive any severance or other compensation tied to her pending retirement. And members of Congress have had a field day beating up Wells Fargo and threatening to sledge hammer the banking industry into submission.
But there is a culprit conveniently being left out that is escaping punishment — the federal bureaucracy.
It wasn’t federal banking regulators that tripped up Wells Fargo’s attempt to keep the ghost account fiasco hushed up. It was the Los Angeles County District Attorney and the State of California. That, of course, didn’t prevent the federal government from jumping on the bandwagon at almost the last minute and pocketing the lion’s share of the $185 million fine.
So why didn’t federal banking regulators catch the problem? Congress keeps giving the federal bureaucracy more and more power and money as the regulatory agencies busy themselves creating more red tape instead of hard-nosed monitoring of banks. And let’s be clear. Wells Fargo isn’t some Podunk backwater one-branch bank. It’s the nation’s third largest bank.
Maybe Congress should adopt “claw back” rules for their own compensation when the burecarcy they keep expanding and feeding with tax dollars spectacularly fails.
And let’s look at Congress’ indignation.
It is conveniently aimed at Wells Fargo’s irresponsible banking practices and not how it went undetected for more than a decade by regulators. 
And where is Congress’ collective indignation when Fortune 500 companies and their franchisees replace paychecks with loaded debit cards forcing minimum pay workers to pay fees every time they go to spend a part of their paycheck?
What about federal oversight of pay day loan firms where the real interest rate on an annual basis is in excess of 700 percent in some cases?
Congress moans and groans about how too much or not enough is spent on wealth transfer programs such as food stamps yet they do nothing to prevent clear cut abuse of struggling workers so others can make bigger profits off of their plight.
Someone who is barely making it payday to payday is highly unlikely to have the time or the resources to challenge regulations — or the lack thereof — that make them profitable victims.
Let’s also be clear Wells Fargo has made it possible for countless families to buy homes, cars, and other things. They finance small businesses and such.
Wells Fargo did wrong. But to use what they did as an excuse to carpet bomb Wells Fargo and other banks with new regulations is akin to dropping a nuclear bomb on a koi pound to kill algae.
Regulate banks even more and the business of making loans will change for customers that need or want them. And knowing the history of what happens when regulators are allowed to run amok after Congress kicks someone for political points, the people that are going to pay the price are consumers.
That’s not to say unchain banks. We’ve already seen what happens to that model through e-banks that have made tons of shaky loans using investors’ dollars and then fibbing about the quality of debt they created when they package them together and sell them on the secondary loan market.
Heaping on more regulation that goes beyond the ghost accounts as some in Congress are threatening to do can have dire consequences on the economy.
Wells Fargo’s idiotic high-pressure sales tactics created integrity issues. There’s no doubt about that. But for Congress to make even more threats to regulate banks further will end up hurting the little guy.
That really isn’t a problem for Congress given they can’t work up collective political indignation about the little guys being used by blood sucking financial fleas that profit from payday loans that make loan sharks look like charity workers as well as those that shed payroll costs by throwing lowly paid workers to the loaded debit card vampires that suck every cent they can.