Bonuses, bailouts, and a broken system: Is this the America in which big banks and the U.S. Chamber of Commerce believe in?
The Washington Post reports today that Chamber and the banking industry are intensifying their lobbying efforts against financial reform. Recognizing their parallel efforts to fund campaigns against working families, the unappetizing alliance of big bank executives, credit card and financial services companies is joining forces to intensify their lobbying efforts against financial reform. "It's no surprise that the U.S. Chamber and the big banks that drove our economy into the ground are joining forces to defend a failed financial model that enriches CEOs at the expense of shareholders, workers, and our economy," commented SEIU's Anna Burger, on efforts to block the Consumer Financial Protection Agency proposed by President Obama.
Obama's proposed agency would oversee a range of financial products, from mortgages to credit cards and checking and savings accounts to guard against anti-consumer sales practices and fight for needed reforms to protect front-line bank workers and consumers. The coalition fighting the Obama consumer agency plan views their efforts to protect those on the receiving end of multi-billion-dollar taxpayer bailouts as simply "allowing the financial services industry to serve its customers in the best way possible." Um, U.S. taxpayers who've been forced to subsidize banks' bad behavior with billions of their hard-earned money might not agree. The coalition's prescription for financial reform to make their case so far include rebranding the same reckless policies that will drive families deeper into debt and launching a massive PR campaign to scare Americans with 'Harry and Louise' style TV ads.
BofA "encourages" its employees to help consumers rack up debt
This comes a week after current and former Bank of America workers stepped forward to expose harmful anti-consumer practices by the bank that encourage customers to sign up for high-interest-rate credit and cash advance services to max out customer credit, as well as structuring a variety of check and debit card services resulting in overdraft fees and other charges. A former BofA employee from Landover Hills, MD, Gabby Inaleis, said that although initially she thought she was taking financial services job, it didn't take very long to realize BofA had no interest in helping customers reach their financial goals. Under constant pressure from her manager to meet unrealistic sales goals (example: sell at least 40 checking accounts every Friday), Gabby reported she would often sell multiple checking accounts to clients that didn't need them by offering to waive the account fees for a couple of months. "It became standard practice to make a customer who wasn't planning on opening an account wait for up to an hour to speak with a personal banker," she says.
No employee bonuses until grandmothers everywhere are penniless (and cold): Among the former bank workers who spoke out was Chris Feener, an ex-employee with 15 years' experience in the industry who worked in BofA's collections department. The department's #1 priority, said Chris, was to collect payment from customers who hadn't made a payment on their credit card for 180 days--no matter the cost. "There was a time I was encouraged to tell an elderly woman to sell her stove and cook on a Bunsen burner to pay off her credit card debt that [the bank] had inflated over time," said Chris.
The questionable practices BofA employees were made to engage in to ensure their jobs were safe didn't stop there, for Chris and his coworkers. "In 2007 when BofA's numbers were particularly low, we were given scripts to read on our customers' answering machines, threatening to sue them or collect any assets they had if they didn't," he said. "It was called the Maxwell message, and for three months straight we used that method, forcing customers needlessly to file for bankruptcy."
And that's not all! Enter more violations of the Fair Debt Collection Practices Act Chris says he and his team members were pushed to do if a customer had a delinquent account: publicly humiliate the customer to shame them into paying. "We were required to call every customers neighbor on every account--the sole purpose was to embarrass the customer and encourage the neighbor to personally bring a phone note to the neighbor to deliver the messages for us."
The BofA bank workers who shared their stories all acknowledged they felt as though the practices like the ones described above were unethical. But one should not underestimate how powerful the pressure to "sell, sell, sell" can be when it comes from a person of authority, like one's manager--or an entire institution (like Bank of America). Without any real whistleblower protections, most workers are too afraid to speak up for fearing of losing their job--something no one supporting themselves in this dismal economy can afford to chance.
SEIU, U.S. PIRG and the National Association of Consumer Advocates have outlined new protections to ensure front-line bank workers can speak out and create a financial industry that puts consumers and the health of our overall economy ahead of quick profits for bank executives. Read them here. "It's clear that big bank executives and the U.S. Chamber will stop at nothing to stand in the way of real solutions for our economy," says Anna Burger. "That's why it's more important than ever that bank workers be a part of any financial reform package."
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