Smart SpendingSmart Spending

Bank firings anger critics

Big banks say new federal rules have forced them to dismiss low-level employees who committed minor offenses decades ago. Critics are outraged.

By MSN Money Partner Aug 29, 2012 9:48AM

This post comes from Marilyn Lewis of MSN Money.


Image: Shadow (© Stewart Charles Cohen/Getty Images)In a superstrict interpretation of federal banking rules, big banks are firing "thousands" of low-level workers who have minor criminal histories, says The Des Moines Register. The Iowa paper points to dismissals at Wells Fargo and Bank of America.


Some say that's unfair because banks have protected executives from responsibility for excesses like promoting, selling and investing in shoddy mortgages, ethical breaches and wrongful foreclosures.


"Critics point out that big banks have insulated top executives from criminal accountability by signing multimillion (-dollar) federal settlements in which they admit no wrongdoing," the Register writes.


Bank fraud continues to be a serious problem, and conservatives and liberals alike complain that neither party nor the Obama administration has held banks responsible for risky bank behavior.


Tighter laws

Tough new federal banking employment guidelines and mortgage employment guidelines were enacted this year and last year to "weed out executives and mid-level bank employees guilty of transactional crimes, like identity fraud or mortgage fraud," the newspaper said.


Banks, fearful of $1-million-a-day fines for noncompliance, now apply the rules to low-level employees like Richard Eggers, fired this summer from Wells Fargo Home Mortgage in Des Moines after seven years.


The Register describes Eggers as a "former farm boy (who) speaks deliberately, can't remember the last time he got a speeding ticket, and favors suspenders, horn-rimmed glasses and plaid shirts."


Until July 12, the 68-year-old Vietnam veteran was a customer service representative earning $29,795 a year. He'd spent two nights in jail in 1963 for inserting a cardboard "dime" in a Laundromat washing machine. He was around 19 then.

"It was a stupid stunt and I'm not real proud of it, but to fire somebody for something like this after seven good years of employment is a dirty trick when you come right down to it," said Eggers of Des Moines. "And they're doing this kind of thing all across the country."

"Banks are afraid of the FDIC and the penalties they could face," attorney Natasha Buchanan, with Higbee & Associates in Santa Ana, Calif., told the paper. She represents some of the "thousands" of workers she says have been fired nationally.

The regulatory rules forbid the employment of anyone convicted of a crime involving dishonesty, breach of trust or money laundering. Before the guidelines were changed, banks widely interpreted the rules to exclude minor traffic offenses and some other misdemeanor arrests.
New rules have eliminated exceptions for expunged crimes and certain minor offenses and expanded the categories of employees covered, Buchanan said.

(Post continues below.)

Similar story

The Milwaukee Journal Sentinel reported a similar case in May. Wells Fargo fired a Milwaukee customer service employee for two 1972 convictions for shoplifting clothes when she was 18. 


"It's something that I did 40 years ago. I paid for it, I changed my life," a tearful Yolanda Quesada says, in this Huffington Post video. Not to excuse the thefts, but the report points out that she was "one of 12 children, money was tight, and she needed something to wear to work."


Wrote the Journal Sentinel:

"I just got the FBI report on Saturday in the mail. Monday, they said, 'You're fired.' They never let me say what happened, explain myself, nothing," said Quesada, 58, who lives on the west side.
This is a woman with a stack of recognition awards, service excellence pins, certificates of appreciation and, just recently, an honor for being with the company five years. The full-time job paid $33,000 a year.

Wells Fargo spokesman Jim Hines told the paper, "Because Wells Fargo is an insured depository institution, we are bound by federal law that generally prohibits us from hiring or continuing the employment of any person who we know has a criminal record involving dishonesty or breach of trust."


Wrote Journal Sentinel columnist Jim Stingl, "I hope this also applies to the crooked top executives of some of America's biggest banks. They always seem to land on their feet."


No barrier in law enforcement

Ironically, a past like Eggers' or Quesada's would not disqualify you from working in law enforcement, says Sam Walker, a police accountability expert and retired criminal justice professor at the University of Nebraska. He tells The Des Moines Register:

… there's no reason to believe that firing employees for minor offenses committed in their teens protects bank consumers from anything. Eggers and Quesada could work at most law enforcement organizations despite their misdemeanor arrests because police take into consideration how long a job applicant has been a law-abiding citizen, he said.

Several hundred Register readers have responded so far to the paper's poll asking, "Are banks justified in using mortgage employment guidelines to fire rank-and-file workers?"

About two out of three voters object to the firings. Some are outraged.

"J.R. Fikuart" wrote, "Until banking and brokerage executives are held accountable for the felony fraud that brought this country to a standstill, there will be no justice for anyone like Mr. Eggers."


"Laura Roberts Clayton" said:

This is horrible after 7 years of employment. Wells Fargo is stretching this new law; if it were a CEO they would cover for them. I closed all my accounts with Wells Fargo and won't ever go back!

Plenty defended the banks' though.


"The Dude" said:

Banking is broken. These new regulations are required to get banking back on its feet, uproot corruption and bring confidence back. While I wish that they had started at the top of the chain instead of the bottom, it had to start somewhere.

"Bob Cox" wrote:

When politicians pass laws so quickly without debate of unintended consequences and don't oversee bureaucrat rule-makers, it's bound to happen. The banks are showing us our broken government.

More on MSN Money:




Aug 29, 2012 5:14PM
PEOPLE, please do yourselves a favor and move your money into credit unions.
Aug 29, 2012 4:55PM
It's a shame that we can't apply this same standard to, eh, say... members of Congress-both parties.  That way, we could get rid of 50%+ of the problems that we have in the country today.  Instead, we just keep re-electing the same white collar criminals, spouse cheaters, sex scandaled, insider-trading, characterless, career dirtballs (and giving them their separate pensions, healthcare for life and beyond, free everything, etc.). And who, by the way, feel that they themselves are above the laws of God, Government, and Nature that apply to the rest of us.  Anyone want to bet that THEIR unsustainable entitlements will be addressed during/after this economic crisis?  Anyone?  Bueller... Bueller...?
Aug 29, 2012 1:45PM
When I was growing up, my Mother told me to be something special like a Banker, Lawyer or Politician. Seems like times have changed. I thought about it and joined the Navy and held my head high. How many Bankers, Lawyers & Politicians can say that! You would have to go looking in the weeds to find one.
Aug 30, 2012 7:36AM
Book Title: The Best Way to Rob a Bank is to Own One
Aug 30, 2012 10:12AM
I am by no means all for these large financial institutions but this is a law the goverment created and not just the banks. Credit Unions do not pay taxes unlike all of us. Find a small community bank.
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.