Tag Archives: FDIC


September 8, 2016 (Update September 21) – Today, Wells Fargo announced it has terminated 5,300 (!!!) employees that created fake accounts and generated fees from the likes of you and me.


In the Summer of 2008, the OCC asked me two questions – 1) Did I think banks had learned their lesson, and 2) What would the OCC need to do to stop the bad behavior at banks.

The first answer was an emphatic ‘No.’  I said once the cycle went back to lending, banks would make the same mistakes and break the same laws.  Today is evidence of that.

The second question instantly brought China to my mind.  Hang the CEOs in the Square:)  I told the OCC they needed to enforce their FIRREA fines to the maximum dollar amount.  But, more importantly, they needed to place the violators in prison.  Until CEOs and senior managers and loan officers and so on see their peers being led out of their buildings in handcuffs, they will not change.  My audience was shocked at the answer.  But, I still believe it today.  And I think most of America does, too.

(UPDATE – The manager of the 5,300 employees is being given a $125 Million (!!!) severance package.  I doubt any of the 5,300 employees that got axed received a huge severance package.  Why would they pay her $125 Million after she caused them a $185 Million fine?  I would say it is hush money.  Just imagine how many managers above her she can take down.  They say everyone has a price.   Also, the CEO apologized, but said he would not resign.  Why not?  Maybe when he is taking out in handcuffs he will resign.  The only way to apparently punish this, and any other bad banks, is to stop banking with them.)

As a friend asked when I shared the Wells Fargo story today – will the government prosecute any of those 5,300 employees?  I seriously doubt it.  But, more importantly, why hasn’t the CEO, President, Board of Directors and so on resigned by this evening?

(UPDATE – Whether you are a fan of Elizabeth Warren or not, she was 100% on target with the following:

Wells Fargo CEO John Stumpf told the Senate Banking Committee he was “deeply sorry” Tuesday over allegations the bank opened millions of accounts without customers’ permission in order to meet aggressive sales quotas.Sen. Elizabeth Warren was having none of it.The Massachusetts senator has built a reputation for being tough on shady Wall Street dealings and the executives she believes are responsible. But she took it to the next level with Stumpf.”OK, so you haven’t resigned. You haven’t returned a single nickel of your personal earnings. You haven’t fired a single senior executive,” Warren said. “Instead, evidently, your definition of accountable is to push the blame to your low-level employees who don’t have the money for a fancy P.R. firm to defend themselves. It’s gutless leadership.”)

The $185MM fine is a few weeks of profit probably.  I propose that companies give up ALL of their income for a year or more.  Once they have no profits and management gets no bonuses and shareholders get no dividends and so on, maybe, and only maybe, will change come about.

Also, as I have mentioned over the years, we must get rid of the FDIC deposit insurance.  Once that is gone, the public would only place their money in banks they can trust.  Right now the FDIC deposit insurance does two things – it let’s banks have our money to do risky things with and it places most of our wealth in a place that the US Government can one day ‘freeze’ instantly and either just take it or limit what we can do with it going forward.

Having worked on the inside and seen the evils of the financial industry, I continue to tell the masses that if they only knew how corrupt most banks were they would put their money elsewhere.  My experience is it is usually a few dozen senior managers that are criminal and a certain number of their employees follow suit.  I never expected to see 5,300 employees in the same bank rob the public so blatantly and for so long.  I should be surprised, but I am no longer surprised by the evil doings of the financial industry.

The only surprise is Wells Fargo may have displaced Jamie Dimon and Chase as the most crooked bank on Earth:)

Lastly, let me be clear that there are tens of thousands of GOOD, HONEST bank and credit union employees in this country.  Community banks especially help the local people greatly.  These are the people of Main Street as they call us.  That is very different from the people of Wall Street which commit most of the crimes and make an entire industry look bad.

One key point is that we should not blindly trust banks.  They do not have our interest in mind, no matter how much they say otherwise.  Their goal is to make more and more money and to do that they must take it from us.  Regretfully, many times they break the law to take it from us.  Like any business, be careful.  Ask a lot of questions.  Only you can take care of yourself.  Don’t trust someone else to do what is in your best interest.  Caveat Emptor is somewhat appropriate in this situation.

Also, for those who want to get rid of the Dodd-Frank Act., remember it gave us the Consumer Financial Protection Bureau (CFPB).  The CFPB caught Wells Fargo.  They have caught many other banks that are robbing the innocent public every day.  Banks complain about added regulation.  No wonder!  They get caught virtually every day violating a number of laws!  The more crimes they commit, the more regulation they deserve.  Earn the public’s trust and regulation will go away.  Continue to deceive us and you get what you deserve.

Accountants, Bankers, Politicians…..they all scare me and it isn’t even Halloween, yet:)


March 7, 2016 – For the first time since December, 2010, the Agencies have issued a statement on Evaluations.  I will include the FDIC link below, albeit the Federal Reserve and OCC have similar links.

My feeling is nothing new has been added.  There is a bit more talk about how to use tax assessments – hopefully, this will once again become more common now that The Great Depression II has run most of its course.   Also, they make it clear that market value must be of real property only.  FF&E in apartments and going concern properties must be valued separately, just like in appraisals.

Please pass the link below along to your bank contacts so everyone can stay informed.  Thanks.



THE BIG SHORT – A Movie All Americans Need To See

January 16, 2016 – I went to see The Big Short today.  I encourage everyone to go see it.

After seeing this movie, you will know why I list Banks among The World’s 3 Greatest Evils (I won’t go into the other 2 at this time).  You will know why I took on Fifth Third Bank and suffered for 7 years to achieve vindication.  And why I look so forward to all of the other whistleblowers out there getting their share of that and many other banks.

For me, it was an emotional movie.  I lived it and knew it at the time.  I can totally relate to Mark Baum, and really the others who went short, as it was an obvious winning bet – but, to win, the American public had to be decimated and we knew banks and Wall Street would be bailed out by the taxpayer.  Corporate Socialism I heard it called recently.

It was good to see the few other people that forecast what I termed in June 2005 The Great Depression II (c).  Unlike them, I just didn’t make a few billion dollars:(  I am glad they did at the cost of ‘the smart money’ on Wall Street.  Yes, a few of us can be right and 99.99% of the World can be wrong.   Remember Mann’s Axiom….

Money will be made shorting the current Echo Bubble during this Echo Depression(c).  It just won’t be as much as last time since the bullish housing people know what the shorts are doing this time around.

I was interviewing with the OCC in the Summer of 2008 and they asked me if I thought banks had learned their lesson.  I said ‘NO’ and that as soon as the pendulum swung back to optimism they would do everything all over again.  I have been told things are even worse today than in the bubble years.  Scary.  The OCC then asked me what it would take to stop banks from being so wreckless.  My answer was to enforce the FIRREA penalties that would allow the government to fine and imprison individuals – the corporate veil does not protect employees that violate FIRREA.  I won’t give it away, but the movie tells us how many bankers have been arrested for the housing debacle – you won’t be surprised, but should be disappointed in the system.

Today, my solution to get banks to clean up their act is simple – eliminate the FDIC deposit insurance.  The public would demand 100% transparency and total safe lending and practices before they would put their money in a bank.  Of course, and saying this I sound like Mark Baum for sure, this would just move all of the unethical and greedy people from banks to non-bank lenders.  The scum keeps moving to where it can thrive.

Speaking of which, the scum have renamed CDOs today as ‘Bespoke Tranche Obligations (BTOs).  Also, a residential lender told me that lenders are starting to do ‘Statement Loans.’  They simply look at your bank statement to see your income and don’t request your tax return.  This is the first step in the direction of the old NINJA-type loans.

I encourage anyone in the industry that encounters these products to collect all of the info you can and go to the authorities so these people can be prosecuted when the time comes – I will be glad to advise you on what steps to take.  Also, investors should remember a rose is a rose is a rose.

Please go see the movie.  Please tell everyone you know to go see the movie.