Score one for the CFPB
My mother would occasionally tell my father that he was never right. His response was that even a broken clock was right twice a day.
The Consumer Financial Protection Bureau (CFPB), in the minds of businesses involved in the financial services sector, has never been right in any of the decisions they have made and the hundreds of regulations they have placed on those businesses. I for one have often said that the super agency has overreached their mission and authority and by doing so hindered the operation of credit unions, community banks and other financial providers. But like a broken clock, the CFPB has shown they can occasionally get it right.
The recent disclosure of the callous and disrespectful treatment of its customers by Wells Fargo uncovered by the CFPB mandates that the agency be commended for a job well done.
It is unfortunate that the primary regulator of Wells Fargo was not the one to uncover the massive misuse of customer accounts, fraudulent charges and employee theft at the highest level. Certainly those in charge at that regulator’s office should be asking many questions as to why the illegal activity went on for so long without it being uncovered through the examination process.
Adding insult to this conspiracy, Wells Fargo fired 5,300 employees of which 90% were not even at the level of branch management. And better yet, the executive who ran the unit responsible for the fiasco will not be disciplined but rather allowed to take early retirement and be awarded with a package worth tens of millions of dollars. Unlike the 5,300, she will have no problem enjoying the rest of her life.
Fortunately, this story is far from over. Congress will convene hearings and hopefully will shed some light on who really was responsible when they question the bank’s CEO. And Attorney Generals across the country are opening investigations in an effort to get to the truth and determine if there exists the possibility of criminal prosecution.
The CFPB got this one right and they deserve credit for doing so. Let’s hope this is a restart and their next step will be a review of their one size fits all regulations that have stymied the growth of honest, customer orientated financial service providers.
