The woes following Wells Fargo’s lust for profits continues as it now admits …
… it forced redundant car insurance on more than 800,000 car-loan borrowers, earning the company $73 million in ill-gotten gains while causing a quarter-million delinquencies and 25,000 wrongful auto repossessions.
That from David Dayen at The New Republic, who goes on to call for the impossible:
We habitually allow giant corporations to harm customers, employees, and the economy with relative impunity. That’s despite the fact that we, the public, give corporations the ability to exist. Every legal corporation must obtain a corporate charter, a written contract detailing the company’s structure and objectives. And the same government that grants charters can take them away, and should, if the corporation repeatedly violates the law.
Though politicians of all stripes claim to support corporate accountability, and those on the left frequently campaign on the issue, calls for a corporate death penalty are extremely rare. But the modern enforcement regime makes a mockery of the law, as governments feign powerlessness against an entity they themselves created by granting it a charter. Simply put, if Wells Fargo keeps using its power as a bank to rip off customers, it shouldn’t be a bank anymore.
David works hard to justify the call for the death penalty, and ameliorate the consequences, but, unfortunately, there are probably too many unintended consequences for a death penalty decision to be practical, no matter how salutary it might be.
However, David cites the demise of Arthur Andersen as a model for how innocent victims would cope, but I think there’s an important lesson David’s ignoring: Arthur Andersen was terminated because their customers went elsewhere. Based on that observation, the most practical step to my mind is to ask everyone who does business with Wells Fargo to consider these signs of the culture within Wells Fargo and ask if you really want your business entangled with such an apparently toxic culture? It doesn’t matter if you’re commercial or consumer, it’s an important question and one worth pondering in connection with your future.
I know we have a small investment in Wells Fargo and we will be reconsidering it in the light of this latest scandal, based on both measures of return on investment as well as the social responsibility of owning shares in a company which appears to be bent on unethical activities.
Is this a problem you have, dear reader? Let me know what you’re thinking.
