Minneapolis Star Tribune, Sept. 30
Wells Fargo scandal shows the value of regulation
Anyone with a bank account, credit card or mortgage should feel a tremor at the debacle unfolding at Wells Fargo, which was recently found to have scammed 2 million customers by opening phantom accounts without their permission.
Wells Fargo, one of the largest financial institutions in the world, developed an industrywide reputation in recent years for its aggressive sales of what the industry likes to call “products.” At its helm was Minnesota-born and raised John G. Stumpf, CEO and chairman of the board, who has spent 34 years in banking, but when questioned by Congress about the fraudulent practices at Wells Fargo often professed ignorance.
That is simply unacceptable. Stumpf is far too highly compensated to escape responsibility for what happened on his watch. He has become the poster child for why this nation should maintain strong - not excessive - regulation and monitoring of the financial institutions so vital to a healthy economy.
Even with the stronger regulations put in place by the Dodd-Frank Act following the Great Recession, the scandal at Wells Fargo remained undetected until the Los Angeles Times broke the story in 2013. Why? Rep. Keith Ellison, D-Minn., who sits on the House Financial Services Committee, said the answer is simple: For all the protections in the act, banks are still allowed to “self-report” irregularities.
Stumpf and senior managers at Wells Fargo failed to alert investors that it had what in banking is called a “material event” because they insisted that defrauding millions of customers with phony accounts did not fall into that category. From the mortgage collapse to ghost accounts, financial institutions have proved over and over that they must be watched carefully. Without proper monitoring, investors, consumers and workers who depend on a stable banking system are all at risk.
Were employees ordered to fabricate accounts or was the pressure to sell, sell, sell so intense that they did so just to keep their jobs? Those questions require further investigation by the Securities and Exchange Commission and Justice Department.
The effort being led by some Republicans to weaken Dodd-Frank and the Consumer Financial Protection Bureau it created must be resisted at all costs. In less than six years, the bureau has fielded more than 700,000 consumer complaints and paid out more than $210 million in compensation to victims of wayward financial institutions from fines collected.
Funded by the Federal Reserve, the board is independent of the political whims of Congress and must remain so, despite efforts by some legislators to have Congress take control of the bureau’s appropriations. The bureau has fined Wells Fargo over $100 million - the largest fine in the bureau’s short history - some of which will compensate victims.
Ellison, who was among those grilling Stumpf at this week’s House hearing, said there is reason to believe that overly aggressive cross-selling, if not outright fabrication, of banking products may not be confined to Wells Fargo. “Wells Fargo is an industry leader,” he said. “I believe this is a widespread practice and we need to ask questions of everybody.”
Sadly, the scandal is growing. On Thursday, Wells was fined another $24 million to settle allegations that it violated the Servicemembers Civil Relief Act by repossessing more than 400 vehicles belonging to men and women on active military duty and denying them banking protections.
There is no practical way for Americans to protect themselves from unscrupulous or even outright illegal practices against financial giants with armies of lawyers. And this is not just a consumer issue. Investors in these institutions should also be demanding better scrutiny of those who clearly cannot be trusted to police themselves.
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The Free Press of Mankato, Sept. 30
Volunteers respond to aid flood victims
A flood of misfortune also brings with it a flood of humanity.
The number of volunteers who have come forward and are still doing so to help local flood victims has risen like the waters they were trying to stop. Facing floodwaters and impending cleanup day after day is draining and depressing, but not having to do it alone makes a difference.
After the drenching storm of Sept. 21-22, volunteers showed up in St. Clair to sandbag - so many that the announcement was made at one point that no more were needed. Homecoming festivities were canceled at the school so students could help in the efforts. In Waseca volunteers also have worked nonstop, including those who have taken on the giant job of gutting the flooded ice arena.
Along with community residents who came out to help their neighbors, others have offered aid in all kinds of ways. During an elementary football event last weekend, parents and fans of the Lake Crystal team raised money for St. Clair. Today members of the Mankato Area Civil Air Patrol Squadron are assisting St. Clair residents in cleaning up. A team of military vets and first responders showed up in Waseca this week to help with cleanup. Local restaurants have made donations to feed workers. A nonprofit group helped provide shower facilities. Those unable to do physical work brought food and whatever supplies were needed.
The outpouring has been inspirational. St. Clair’s one-time reluctant mayor - he won as a non-consenting write-in - is running for re-election and is grateful for the help his community received. Marvin More told a Free Press reporter: “You can’t do it alone, a small city like us,” as he went through the long list of those who helped. “We have a very good community.”
Sometimes photos tell the story best. A video posted on Facebook begins with pictures of the devastation in St. Clair, but it is followed by a segment of photos showing the many people who pitched in to help. Appropriately the soundtrack is “Lean on Me.”
The generosity has been nonstop and hopefully will continue until all the work is done.
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Post-Bulletin, Sept. 29
We must keep fighting domestic violence
As the Olmsted County Board proclaimed October to be Domestic Violence Awareness Month, Chairwoman Stephanie Podulke noted things have changed.
She recalled working with the local women’s shelter before there was physical shelter, when volunteers would take abused women into their homes. They were frequently contacted by women who received a card from police officers after a call regarding domestic violence.
Podulke recalled an astonishing conversation during that time: “One of the law enforcement officer’s statement to me was ’Why don’t you just give these out in the food-stamp line?’”
“Think about how far law enforcement and community awareness has come since then,” she added.
Unfortunately, we haven’t come far enough.
Last year, 34 victims of domestic violence were murdered in Minnesota. Countless others were injured, some who are known and too many who continue to hide their physical and emotional scars.
While more than 65,000 adults receive domestic violence services each year in Minnesota, less than 50 percent of victims seek help, according to the Minnesota Coalition for Battered Women.
The grim statistics proves more must be done. Still, we’re glad to know attitudes are changing. Domestic violence is not something found in only certain households; it cuts a tragic path across demographics.
Awareness efforts must be just as broad.
As Neil Dennison of Olmsted County’s Victim Services program noted, “It’s important to bring up our domestic violence awareness, not just for women but for everyone - men, children, teenagers.”
Podulke said that increased awareness makes a difference. “I’m proud of everyone for growing and understanding how serious domestic violence is and what a long legacy it passes down to children,” she said.
That legacy means we need to continue to support efforts to raise awareness, throughout October and throughout the year.
Domestic Violence Awareness Month provides a chance to increase conversations. As events occur throughout the region, they offer opportunities to support local shelters, as well as provide insights on how to prevent domestic violence.
Dennison pointed out that fighting domestic violence isn’t always a matter of stepping between an abuser and victim or even offering shelter. Sometime, it’s a matter of shining a light on improper attitudes, demonstrating ways to change mannerisms and being willing to speak up. “There’s many ways you can stand up to domestic violence,” he said.
On a larger scale, we need to continue to ensure housing and services are available for anyone seeking to leave abusive relationship. We ensure services are accessible to all, and we need to continue raising awareness whenever possible.
Whether you have a personal connection to domestic violence or not, take time this month to learn more about it. Raise your own awareness.
Who knows? Maybe you’ll find a way to step in and help someone put an end to a brutal legacy.
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