The hottest new revenue flow trend in banking is simply stealing money from your customers. Via the Village Voice:
You wouldn’t know it by watching the news or reading the paper, but America’s banks are on the largest crime spree the country has ever known. Let’s go to the highlight reel, shall we?
In July, Wells Fargo paid a $175 million settlement after the feds caught its brokers systematically pushing minority customers into mortgages with higher rates and fees, even though they posed the same credit risks as whites. One study found that Wells Fargo charged Hispanics $2,000 more in what the Justice Department called a “racial surtax.” The bank docked blacks nearly $3,000 extra for their own improper pigmentation.
But despite a colossal civil rights fraud perpetrated against 30,000 customers, the settlement amounted to just .011 percent of the San Francisco bank’s annual income.
Across the country, in Minneapolis, U.S. Bank also swindled its customers. Instead of logging debit card purchases in the order they were made, the bank rearranged them from highest amount to lowest, the better to artificially stick customers with overdraft fees. U.S. Bank paid $55 million to settle a class action suit in July. It was the 13th major bank caught running this scam.
Yet these titans of finance were pikers compared to American Express. It promised $300 to anyone who signed up for its Blue Sky card, then decided it would be way better to just stiff them. The company was also caught charging illegal late fees and discriminating against older applicants.
Bank of America was caught illegally foreclosing on the homes of active-duty soldiers. Visa and MasterCard were charged with fixing the prices they charged merchants to process credit card payments. Morgan Stanley colluded to drive up New York electricity prices. And in the most depraved case of all, Morgan Stanley was even sued for allegedly swindling Irish nuns in an investment deal.
If they’d been common robbers, the bankers surely would have faced indictments. After all, their scams have run for years, their breadth and coordination breathtaking. But not a single boss went to jail. Some firms settled for just a fraction of what they’d stolen. Most have never admitted wrongdoing, and many saw their stock prices rise. America’s country club set has forged its own replica of the Mafia—only bigger, broader, and capable of unleashing far more damage on the U.S. economy.
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