September has been a terrible, horrible, no good, very bad month for Wells Fargo. In case you missed it, the nation’s third-largest bank is under fire for creating bogus bank and credit card accounts that the supposed customers never wanted. Just hours before the bank’s CEO was ripped apart by the Senate for allowing senior managers to largely get off scot-free, Hillary Clinton told the victims of this massive fraud what she will do to ensure this never happens again if she is elected president.
In an open letter to those victimized by these fake accounts, Hillary declared in no uncertain terms that “there is no place for this outrageous behavior” at Wells Fargo or any other American financial institution. She then outlined her plan to address “the culture of misconduct and recklessness” that caused the Great Recession and “too often persists” in the banking and financial services industries.
Hillary promised to beef up the Consumer Financial Protection Bureau. She believes the Wells Fargo fraud is a reminder that “we need tough watchdogs looking out for consumers.” In case you missed it, the CFPB forced Wells Fargo to cough up $100 million in fines–the largest single penalty ever issued by the bureau to date.
The GOP has worked almost from the start to neuter the CFPB, an effort that will almost certainly ramp up into overdrive with Donald Trump as president. However, Hillary promised that if she wins in November, she will work to ensure the CFPB has the resources it needs to “continue its essential work on behalf of the American people.”
Hillary then took a direct swipe at Carrie Tolstedt, who oversaw the Wells Fargo division responsible for the bogus accounts. Tolstedt was allowed to resign and unfurl a $124.6 million golden parachute. Like the rest of us, Hillary finds it hard to believe that Tolstedt and other senior executives didn’t know about “a problem that involved thousands of the firm’s employees”–some 5,300 of whom were fired for their roles in the fraud. After all, Hillary reminds us, these executives “imposed sales targets and compensation executives” that ultimately led their underlings to stray into unethical and outright illegal behavior. For that reason, Hillary wants Wells Fargo to claw back Tolstedt’s golden parachute.
She then proposed to hold Wall Street executives “individually accountable” for “rampant illegal activity”–including reduced compensation when a company pays “major fines,” as well as “appropriate legal consequences.” Additionally, Hillary appears to have come around to the view that when a bank is too big to fail, it’s too big to exist. She wants to impose tougher safeguards that will ensure that a financial institution never becomes “too big to manage.” If a bank ever gets to the point that it “can’t be managed effectively,” Hillary wants that bank broken up.
As impressive as this is, Hillary could have gone further. There comes a time where misconduct is so egregious that the (wo)man at the very top has to fall on his or her sword. Senator Elizabeth Warren came to the same conclusion. When Wells Fargo CEO John Stumpf kept fobbing off responsibility for corrective action to his board, Warren called for Stumpf to resign. Watch here.
That aside, Hillary has laid out a comprehensive plan to ensure that “Wall Street works for Main Street–not the other way around.” That’s not something you’d hear from someone who is supposedly a puppet of the big banks.
