Time to unionize customer-facing bankers
Have you heard of the most recent outrage committed by a bank? Wells Fargo just got fined a total of $185 million for corrupt practices involving the accounts of depositors.
Specifically, a bunch of depositors were given accounts they didn’t sign up for, and then charged for via fees. Wells Fargo claims they have fired 5,300 low-level workers over the past five years for doing stuff like this.
But as many have pointed out, including Naked Capitalism, this is really not about low-level workers. It’s about ridiculous and unattainable sales quotas imposed on bankers, and then a complete disregard for the knock-on effects of those stupid quotas.
The fact that so much fraud went on so widely means that either the top dogs knew about it and didn’t care (I’m voting for this – after all the high pressure sales tactics were probably profitable overall even with this $185 fine) or that they had entirely insufficient controls and didn’t know about it. Either way they’re idiots, and it’s outrageous that only the underlings were fired, and not the management. For that matter the person who came up with rigid sales quotas without thinking for five minutes about what would happen next needs to get canned.
Oh wait, I just remembered: the lowest paid bank workers, who really work for very little money under tremendous pressure, have very little power. It’s time they form a union. This is not a new idea, but it’s never been more obvious.
mathbabe 
Remember the good ol’ days when banks actually cared about customers, communities, and service… (yeah, I’m THAT old!)
Clark Howard has argued for years that people (sheeple?) should transfer their money out of the big banks before they get sheared any further.
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I’ve been with Wells Fargo ever since they bought out Wachovia and was with Wachovia for years before that. Although I’m fairly happy with WF and haven’t had much issue with them, I would happily drop them for a credit union in a heart beat. However, all the credit unions have some requirement I can’t meet. For example, I don’t work for Corning or Guilford. I’m not a state employee, or something like that.
JamesNT
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In my experience most credit unions have geographic communities, even ones named for specific employers will often accept members who live in the cities or counties they serve.
Even Corning Credit Union allows “Anyone who lives, works, worships, or attends school in one of the following communities” to join.
http://corningcu.org/join/joining-ccu/
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Credit unions have become far easier to join in recent years. You are often able to establish eligibility through your partner, parents, siblings, roommates or children – or their employers/former employers.
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“after all the high pressure sales tactics were probably profitable overall even with this $185 [Million] fine”
My response is “Relax Luthor. It’s much worse than you think.” While it may appear that WF went beyond piggishness and were hogs (and, therefore, received a $185 Million slaughtering), not only may have the practices still been profitable but the compliance burdens placed on smaller institutions not engaging in such practices may be onerous enough to force some of them out of the market or deny the resources to compete for greater market share. Another commentator mentioned credit unions. Google “compliance costs credit unions” and note the first page of results.
Under the current system, this additional “knock-on” effect might actually be incorporated into the algorithms employed in the C Suites and discussed at exclusive invitation-only Money Center Bank break out sessions in Davos and Jackson Hole etc to decide which big bank will take the next fall. Of course, invite the senior regulators (who will want senior jobs when they re-enter the revolving door) in order to coordinate an appropriate marketing expense (er, fine) for the strategerie.
Just sayin’.
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Exactly, the workers were more than likely under some pay for performance program with goals to meet and if they were too far off, they could lose their job. That’s how this stuff works indeed as the employees do not create incentive models, they just have to work them with a bit of pressure.
Back in 2012 you had Citi bragging about their IBMWatson program, briefly, then they shut up and stopped talking about it. Someone, and maybe it was yourself was astute enough to notice that when Citi was fined over fees, there were like zero complaints from consumers about the fees that were levied on them. The models had to be sneaky enough to where the average person could not really identify with them in my opinion.
When it comes to making easy money with computer code where folks can’t see what’s going on, my mind goes directly to the toilet and I assume the Citi IBMWatson program was doing behavior analytics to figure out just that, what clients based on behavioral analytics wouldn’t notice some extra fees tagged on, so it became pure automated profit dollars.
I could be out to lunch but my gut instinct does not seem to think so:) You are correct in the fact that the responsibility for this at Wells Fargo does not lie with the low level employees, it’s the management who created this pay for performance nightmare and the required goals to attain.
http://ducknetweb.blogspot.com/2012/03/ibm-watson-going-to-work-at-citigroup.html
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“For that matter the person who came up with rigid sales quotas without thinking for five minutes about what would happen next needs to get canned.”
I believe the term is “allowed to retire”: https://www.wellsfargo.com/about/press/2016/tolstedt-to-retire_0712/
I worked for WF for 9 years, although not in a sales or customer facing role so I did not have first hand experience with the sales incentive comp plans. Tolsdedt was absolutely the chief architect behind WF’s sales plans though.
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Thanks Adam.
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This performance- ‘incentivizing’ business sounds so similar to the “slamming” which occurred (occurs?) with phone and cable companies where salespeople simply move customers from one company or type of account to another without any consent given (or even with consent specifically declined) — I was livid when it happened to me once and will never understand how they get away with it or are fined so little for it.
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Hm-m-m… set ridiculously high expectations and when a group fails to reach those expectations fire them all… sounds a lot like the public school reform algorithm to me!
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I worked for WF from 03-05 in personal banking and merchant services. Unrealistic pay for performance sales goals with high pressure management tactics was common practice. Bonuses, commissions, profit sharing – – and keeping your job – all depended on meeting those goals. In some markets it was unrealistic the expectations, so many bankers and reps did not earn bonuses, etc., and base pay was generally low, at the time. Constant reporting to management was required, and if you didn’t hit goals for a month, a manager could and often did put you on “counseling”, one step from firing, regardless of work ethic or mitigating circumstances. Around ’05, sales goals were increased tremendously and comp plan qualifiers were changed for the worse, with gotcha parts to it, to pay out less bonus or none at all, even if a rep or banker was generally performing well. The result being people working their tail off to meet unrealistic goals and just survive, with base pay often the only comp. Management and executives knew what they were doing. That’s when I left. I suppose it only got worse as 2008 approached. I’m not surprised this happened. I never opened a false account. My numbers were average, and I took a lot of flak for it. But at least it was honest effort on my part. I had my suspicions about others, but never had any proof of it. I do know a lot of checking accounts were never funded, particularly those opened for Latino immigrants who only needed a Consular card to open an account at the time. With pressure to hit checking account goals so ridiculously high, that was a common tactic and legal loophole used often… all part of an overall toxic sales environment. I’ll end with what a manager said to me once, in a hushed tone, “We’re not really a bank anymore, we’re a sales organization.” Indeed, banks are not called branches at WF, they’re called “stores”.
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I am glad someone took the time to write a book about it. Thank you, I will be sure to read it
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There are times when it feels like I need to apologize for being a part of this process for the last 33 years. I worked for the 3rd largest distributor of PCs in the mid 80s and have programmed for some of the biggest players in the insurance and annuity business (now law enforcement) over the last 20 years or so.
I feel responsible in some ways for many of these issues. Not for being the creator of the computer, but for being part of the apparatus of popularization of the computer. And along with it, the spreadsheet possessing bean counters and the vast horde of unethical innovators (that is a pejorative term in this case) who use math and computers as a tool and not in a friendly way.
The government and businesses are using data in ways I never dreamed someone would.
Hindsight is 20/20 as they say. I feel like the enabler who gives the alcoholic money when asked (and knows they are going to just spend it on booze).
Right now I keep telling myself that by writing correct software for law enforcement that I am helping to eliminate the possibility of them raiding the wrong address by making sure the data they have is correct. But there is a part of me that wonders if I am helping police to keep up some of the abusive practices we see in the news to occur.
If I could go back 40 years to when I started college, would I change my major? I loved math growing up. Took 3 semesters of calculus on my way through the Computer Science curriculum (back then it was more tightly coupled with the Math department). I could have become a quant, but I fell in love with the logic of programming. As I am getting closer to retirement, I now wonder what I can do to help right this ship. I have always been acutely aware that if I yell too loudly, I could be a very poor individual very quickly (and I have an 11 year old still at home). That is the ultimate trap that this country is all too efficient at. The carrot and the stick approach is alive and well and is called the USA.
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Instead of math, you could do any other important thing … say, develop life-saving drugs. It will end up being misused by the powerful cabals, for, say, selling at ridiculously high prices to selected few and reaping huge profits, rather than actually saving any significant number of lives. It is simply the way of things the current social and state structures are.
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You mean to say, unionize the bank *workers*, more than the “bankers”, which could be taken to mean bank owners.
Come to speak of it, the big bank owners are already “unionized” — they are united in exerting huge influence on the various state powers.
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Wachovia was a decent local bank, ruined by their new corporate overlords. I remember being interviewed by the local bank manager to get a credit card, when we first arrived in the US with no credit score..
We briefly had a mortgage through Wells Fargo, but refinanced because we couldn’t bear the constant high-pressure sales harassment to add accounts, cards, etc.
We now have all our accounts with First Bank, a Colorado-owned bank that supports the local community.
http://www.businesswire.com/news/home/20160811005131/en/FirstBank-Donates-2.1-Million-Charity-2016
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Yes, I was with Wachovia waaay back (they were already more than local though) and quite pleased with them. Then they were bought/merged by First Union and the slide in quality could be felt. I stuck with them though, until the Wells Fargo takeover, and after about a year transferred my accounts out — even had the feeling by then that Wells was happy to be rid of small-potatoes accts. like mine… small accounts are almost a nuisance to the big banks.
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This is fraud. Where are the criminal prosecutions?
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Yes it is not a new idea but may be even a tougher battle now —when the competition is an ATM machine or a cellphone, but banks do still need people to meet with customers… ..
Don’t forget the Willmar 8 who went on strike nearly forty years ago ,,,,some battles just keep being fought….
http://www.startribune.com/remembering-mom-on-the-willmar-8-picket-line/378519725/
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Cathy, you write “Time to unionize …” Assuming you are correct about unionizing, how would unionization have stopped the scam?
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