Elizabeth Warren

Big Gifts and Little Tokens

Merry Little Xmas pkg.jpg

The day BEFORE the tax bill was completed by a Republican Congress, Wells Fargo’s CEO Tim Sloan told CNN Money their expected tax windfall would go to increased dividends for  shareholders and stock buybacks http://money.cnn.com/2017/12/18/news/economy/wells-fargo-taxes/index.html. But by the next day, while Republicans’ delivered fawning kudoes to the “exquisite” leadership of you-know-who, Wells Fargo (and other huge companies like AT&T, Comcast and Boeing) were promising bonuses and raises for workers, thanks to the wondrous tax reform. http://money.cnn.com/2017/12/20/news/companies/wells-fargo-bonuses-tax-cuts/index.html

We’d love to believe Wells Fargo’s CEO had misspoken, 'cause it sure did look greedy just before Christmas. Perhaps when the board saw CNN’s story and what their CEO said, they shouted NO! Be generous! Give our people bread! But more likely, given scandals and falling stock prices, raising their minimum wage to $15 is a public relations strategy. About 25,000 employees will be affected, getting a raise of $1.50 an hour, or $3,120 a year, assuming 40 hours/week. That's better than a sharp stick in the eye.

But consider that back in 2014, Tyrel Oats, a Wells Fargo customer service employee who earned $15/hour wrote to their then-CEO, John Stumpf. His letter pointed out the bank’s net income in its second quarter alone had been $5.7 billion. Oats suggested the bank improve its image by giving a $10,000 per year raise to ALL its employees, or an hourly raise of $4.71 per hour. He copied his letter  to 200,000 workers because unions aren’t allowed at the bank. https://www.huffingtonpost.com/2014/10/09/wells-fargo-email_n_5960072.html

That same year WF’s then-CEO John Stumpf had pulled in $19 million for his one-man job, 473 times more than their median employee, nevermind the low life minimum. That same year Citizens for Tax Justice reported that Wells-Fargo had received federal tax subsidies from us taxpayers worth $21.6 billion over the previous 5 years. And Stumpf's piss-poor job performance ultimately cost the bank in legal fines, plus earned him a public shellacking by US Sen. Elizabeth Warren and Congressional threats of shutting the bank down in 2016.

Sloan replaced Stumpf, but Wells Fargo's legal problems from cheating people—ranging from overcharging for insurance, overdraft fees, appraisals, and their actively targeting African Americans and Latinos for overpriced mortgages—has added up. In 2012 they paid out $6.5 million in fines for SEC charges of failing to disclose risks of securities they sold; in 2013 they paid $203 million to settle a suit with 24,000 Florida homeowners, and faced new alleged violations of an earlier agreement with 49 states attorneys. In 2015, they paid out $4 million for credit card violations, and in 2016, The Consumer Financial Protection Bureau issued a combined total of $185 million in fines for their 1.5 million notorious fake accounts and 500,000 unauthorized credit cards. Forbes Magazine reported that in 2017 alone, Wells Fargo’s legal troubles had cost them $1 billion. https://www.forbes.com/sites/maggiemcgrath/2017/10/13/legal-troubles-hit-wells-fargo-third-quarter-earnings/#107268a9358e

Wells-Fargo’s promise of raises for its lowest-paid, if kept, might cost them as much as $78 million, still a far cry from Oats’ suggested $3 billion in raises, and a tiny trickle from the gushing billions in that bank’s  polluted revenue stream—reported in 2016 at $88.3 billion. As CEO Tim Sloan (paid $12.8 million last year) told CNN Money on Dec. 20: Yes, the bank has “excess capital.” With this "Christmas gift" tax reform, they’ll soon have billions more.