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.
This post comes from Marilyn Lewis of MSN Money.
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.
"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.
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.)
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:
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- Philly man 'forecloses' on Wells Fargo
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- Banks accused of foreclosure bias
- America's most-hated industries
- Banks agree to $26B foreclosure settlement
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