Friday, October 26, 2012

Crime and Punishment in Banking

You gamed the washateria system in 1963 with a cardboard dime (and were actually convicted)? --- you're fired!

When it comes to recent banking system justice, this recent Wells Fargo Home Morgage story made me think of Joseph Stalin's infamous quote:

"The death of one man is a tragedy, the death of millions is a statistic."

"That's what Soviet dictator Joseph Stalin allegedly once said to U.S. ambassador Averill Harriman. And Stalin was an expert on the topic since his regime killed as many 43 million people. It turns out that the mustachioed murderer may have been expressing an acute insight into human psychology. The Washington Post's always interesting Department of Human Behavior columnist Shankar Vedantam reported on the research of University of Oregon professor Paul Slovic who looked at how people respond to humanitarian tragedies."

Here's the whole Post article:

We can paraphrase Stalin's meme for banking, The loss of one dime is a crime, the loss of trillions of dollars is a shame."

So while disgraced banking CEOs aren't held quite so liable for gaming with billions of dollars (what "crime?") and even award themselves big bonuses and "golden parachutes," after their unethical and fraudulent tricks fail, this WFHM employee was soundly fired for using a cardboard dime in a washing machine -- 50 years ago. Hey, they had to, it's the law.

DES MOINES, Iowa — A 68-year-old Des Moines man fired from Wells Fargo Home Mortgage over a minor crime 50 years ago has stirred national interest.

Richard Eggers was fired in July when a background review sparked by new federal rules for banks revealed a 1963 conviction for putting a cardboard cutout of a dime in a laundromat's washing machine. He has since received a waiver from the Federal Deposit Insurance Corp., or FDIC, and Wells Fargo offered to rehire him.

But Eggers says he won't accept the bank's offer to return to work unless Wells Fargo changes its background check policy, which he believes discriminates against low-level workers.

Banks have fired thousands of employees like Eggers since new federal banking guidelines were enacted in May 2011. The regulatory rules forbid the employment of anyone convicted of a crime involving dishonesty, breach of trust or money laundering.

The tougher standards are meant to clear out executives and mid-level bank employees guilty of transactional crimes – such as identity theft and money laundering – but banks are applying them across the board because possible fines for noncompliance can total in the millions of dollars.

Before the guidelines were changed, banks widely interpreted the rules to exclude minor traffic offenses and misdemeanors.

San Francisco-based Wells Fargo & Co. said this week that it's disappointed that Eggers doesn't recognize its "responsibility to apply the law equitably and fairly" for all employees.

Oh, really?

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