Richard Bowen

  • Home
  • About
  • Speaking
  • Videos
  • Media/Press
  • Testimonials
  • Blog
  • Contact
  • +1-214-604-5492

February 8, 2018 By Richard Bowen

Janet Yellen’s Historical Last Act: Wells Fargo Sanctions!

Janet L. Yellen, in her last act as Chairman of the Board of Governors of the Federal Reserve System, imposed what are being described as unprecedented sanctions on Wells Fargo Bank for the bank’s ”widespread customer abuses” of the last several years.

The Fed cited not only the millions of customer accounts Wells Fargo opened without authorization, even forging some customer signatures, but also the more recent data that they had charged hundreds of thousands of their borrowers for unneeded guaranteed auto and collateral protection insurance for their automobiles. And let’s not forget the thousands of customers they enrolled in online bill pay without their authorization.

Wells Fargo will not be permitted to get any bigger than it was at the end of last year — $2 trillion in assets — until the Fed is satisfied that it has cleaned up its act. The vote for the sanctions was 3-0, with the new chairman, Jerome Powell, joining Ms. Yellen along with Gov. Lael Brainard. 

Randal Quarles, the new vice chairman for regulation abstained, citing his previous decision shortly after he was confirmed to that position, to recuse himself from all Wells Fargo matters due to his wife’s family’s former financial interest with the bank. 

Source: United States Federal Reserve – Public Domain

Outgoing chair Janet Yellen, who completed her term February 3rd after four years in that position, said, “We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again.” … “The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers.” 

“We cannot tolerate pervasive and persistent misconduct at any bank,” Janet Yellen said.

According to the Fed, Wells Fargo is replacing three current board members by April and a fourth board member by the end of the year. Sen. Elizabeth Warren (D-MA) who had long requested the Fed remove all Wells Fargo board members applauded the move, “Fines alone will never rein in fraudulent behavior at the big banks and by pushing out board members at Wells Fargo, (former) Chair Yellen sends a strong message.” 

Senator Warren, when first learning of the Wells Fargo fraud blasted the bank, “You should resign, you should give back the money, and you should be criminally investigated” she told Wells Fargo’s chief executive, John G. Stumpf, during Senate hearings ( in 2016). (Watch in Times Video)  

Her tweets shortly after the decision was made continue to applaud the Fed’s actions:

For months, I have repeatedly pressed Janet Yellen to hold Wells Fargo accountable for its fake accounts scam and push out responsible Board Members. Today she did it – in her last act as Fed Chair. pic.twitter.com/ebIkhu8R0a

— Elizabeth Warren (@SenWarren) February 3, 2018

Wells Fargo had become the poster child of greed and fraud as the charges against them continued to accumulate so it’s time a message of no tolerance was sent even though late and even though it could be much stronger. I’ve ranted about this for years.

We can “talk” culture all day long, mandate it, instill fear re-firing, but if leadership is not an example and role model for ethical behavior…well, it’s not going to happen! If a company wants to promote and assure ethical standards are followed, then transparency, trust and developing an ethical culture based on guiding principles is critical. Talking about culture and transparency and ethics doesn’t cut it. And we’ve been talking, period, for too long without holding people accountable.

Rewarding profits at any cost, which was the model Wells Fargo was using, is a perfect example of “accounting control fraud,” which I’ve been talking to associations about, and  SEACEN, in  Kuala Lumpur, to  their central banks about. It’s short-term and, as we can see by the Wells Fargo example, bound to blow up.

Common sense and common decency toward its customers and employees were not part of Wells Fargo’s code of behavior. It ran rampant over employees, retaliating against those who saw the fraud and attempted to speak up.

Ms. Yellen is now with the Brookings Institute in Washington D.C. as a distinguished fellow at the Hutchins Center on Fiscal and Monetary Policy.

I wish her well and only hope this precedent will spur the Fed and its new chairman, Jerome Powell, to take action sooner, rather than later. 

Related Posts

  • Wells Fargo: The Poster Child of Greed & Fraud
  • Wall Street, The Fed and Ethics!
  • Banking In the 21st Century: The Great American Ponzi Scheme at Wells Fargo (and all TBTF)
  • Wells Fargo, Fried Again!
  • The Saga of Wells Fargo – Are Banks Reaping What They Sow?

Should We Ban Stock Buybacks - Or, Are They a Good Economic Stimulus?
The Epic Story of Fannie and Freddie: Is There an End in Sight?
Ethics on your mind? Subscribe to my ezine to get my latest article delivered right to your inbox. Click Here to Subscribe

Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.

Related Posts

  • Can Winning Cultures Be Built? Ok- but How?Can Winning Cultures Be Built? Ok- but How?
  • Michael Winston, “Wall Street’s Greatest Enemy,” tells allMichael Winston, “Wall Street’s Greatest Enemy,” tells all
  • Technology Can Build EthicsTechnology Can Build Ethics
  • Snowden Documentarian Academy Award Winner Glenn Greenwald Wonders Why We Put Whistle Blowers in Jail!Snowden Documentarian Academy Award Winner Glenn Greenwald Wonders Why We Put Whistle Blowers in Jail!

Comments

  1. dlcole76054 says

    February 8, 2018 at 5:23 pm

    how about putting someone in jail? Fines are one thing…paid for by stockholders that had nothing to do with the crimes…but jail time for senior execs and potentially board members might…just might send the shock waves needed through Wall Street and TBTF banks that criminal acts will not be tolerated by the American public….

  2. jrwells5 says

    February 9, 2018 at 11:39 am

    Gotta wonder why Yellen waits until she is almost out the door to hold this Too Big To Behave Bank accountable for its latest crime against society. Why was there no similar action against Wells Fargo for its role in the subprime mortgage frenzy that precipitated the 2nd worst economic disaster in US history? Or its long-standing discriminatory & predatory lending practices? Or illegally changing mortgage documents in bankruptcy & foreclosure proceedings? Or abusive and illegal credit practices with members of the military? Or connecting the dots amongst these and other illegal and illicit activities to impose meaning sanctions to curtail a pattern of abuse.

What People Are Saying About Richard M. Bowen

William D. Cohan"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst."

~ William D. Cohan, NY Times Best Selling Author
2017-06-30T10:08:59-05:00
"Richard Bowen is one of my heroes. His is a story of human fortitude at its best and Wall Street at its worst." ~ William D. Cohan, NY Times Best Selling Author
https://richardmbowen.com/testimonials/2556/

Eileen McDonnell"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger."

~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
2015-02-13T19:51:19-06:00
"Richard Bowen reinforced my motto that "there is no right way to do a wrong thing.” Long after his presentation, the conversation has continued about personal responsibility and the courage to challenge things that appear to be wrong. We encourage this dialog and rely on it to help make our business stronger." ~ Eileen McDonnell, Chairman, CEO, & President, Penn Mutual
https://richardmbowen.com/testimonials/711/

Ben Stein"Richard Bowen, you are a star and a hero."

~ Ben Stein, Economist and Political Commentator
2015-02-13T19:50:26-06:00
"Richard Bowen, you are a star and a hero." ~ Ben Stein, Economist and Political Commentator
https://richardmbowen.com/testimonials/712/

Jim Farrell"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership."

~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
2014-12-28T19:48:17-06:00
"Richard's speech at the April Financial Executives International dinner was informative, interesting, riveting, and fast moving.  The feedback from members was overwhelming positive, and Richard received one of the few standing ovations given by our membership." ~ Jim Farrell, Program Chairman, Dallas Chapter, Financial Executives International
https://richardmbowen.com/testimonials/532/

Dennis McCuistion"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years."

~ Dennis McCuistion, Host of the McCuistion TV program
2014-12-28T19:48:06-06:00
"Richard Bowen has been there, done that, and has the scars to prove it, and his message of corruption at the highest levels of industry and government needs to be heard. I only wish that more bankers had the courage that Bowen exhibits. He is not only one of the most talented bankers I have ever met, he has more integrity than all the bankers on Wall Street put together. If his former employer had listened to him taxpayers would not have had to bail out Citi for the third time in the last 30 years." ~ Dennis McCuistion, Host of the McCuistion TV program
https://richardmbowen.com/testimonials/533/

Betty Garrett"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!"

~ Betty Garrett, Garrett Speakers International
2014-12-28T19:47:50-06:00
"Richard Bowen is a dynamic, entertaining speaker and story-teller - a CPA with a great personality!" ~ Betty Garrett, Garrett Speakers International
https://richardmbowen.com/testimonials/531/

fred-timmons"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences."

~ Fred Timmons, Chairman of The Texas Society of CPA's
2014-12-28T19:47:22-06:00
"I believe Richard Bowen is the only keynote speaker to ever receive a standing ovation from the Texas Society of CPA’s at any of its annual conferences." ~ Fred Timmons, Chairman of The Texas Society of CPA's
https://richardmbowen.com/testimonials/530/

Presentation Topics

Playing for High Stakes: The Principles and Practice of Ethical Leadership

Dark Citi: The Story of a Whistleblower

Want to Hire Richard?

Watch Richard

See What Clients are Saying

About Richard

Recent Posts

  • Americans Who Tell the Truth, Speaking Truth to Youth Video Series
  • Ethics in the Last and Next Financial Crisis
  • Speaking on Resisting Corporate Corruption
  • The Importance of Corporate Culture
  • Brigham Young University Students Understand the Importance of Ethics in Business

Categories

  • Business Ethics
  • Congress
  • Corporate Debt
  • Corruption
  • Ethical Leadership
  • Financial Crime
  • Financial Crisis
  • Financial Crisis of 2008
  • Holiday
  • International
  • Mortgage Lending
  • Mortgage Meltdown
  • Relationships
  • Speaking
  • Texas Politics
  • The Fed
  • Too Big To Fail
  • Uncategorized
  • Updates
  • Wall Street
  • Whistle Blowers

About Richard

Now an ethical leadership speaker, Richard Bowen was Citigroup's Business Chief Underwriter during the housing bubble.

Read more

Connect with Richard

  Facebook   Twitter   Linked   YouTube

Contact Us

Phone: +1-214-604-5492

Email: Richard@RichardMBowen.com

Contact Richard

Copyright 2021© 2022 · Richard M. Bowen | ALL RIGHTS RESERVED.

X
Sign up to receive my blog posts via email!
Subscribe >>