New banking regulations are designed to get miscreants out of bank management. This is a good thing. But like many good things there are a bunch of unintended consequences.
Banks have fired thousands of workers nationally because of the rules, said Natasha Buchanan, an attorney with Higbee & Associates in Santa Ana, Calif., who has helped some of the banking workers regain their eligibility to be employed.
"Banks are afraid of the FDIC and the penalties they could face," Buchanan said.
The regulatory rules forbid the employment of anyone convicted of a crime involving dishonesty, breach of trust or money laundering. Before the guidelines were changed, banks widely interpreted the rules to exclude minor traffic offenses and some other misdemeanor arrests.
New rules have eliminated exceptions for expunged crimes and certain minor offenses and expanded the categories of employees covered, Buchanan said.
So who are these thousands of bank workers who have been fired. If you chose the category “managers who have consistently engaged in fraudulent practices” you would of course be wrong. The fired workers are low level employees who had minor convictions years and sometimes decades earlier for offenses not connected with banking.
But what about all those senior executives who have done all those horrible things? No problem.
Critics point out that big banks have insulated top executives from criminal accountability by signing multimillion-dollar federal settlements in which they admit no wrongdoing.
On the same day that Eggers was fired, Wells Fargo & Co., the largest U.S. bank by market capitalization, paid $175 million to the U.S. Justice Department to settle allegations it had targeted black and Hispanic homeowners for sub-prime loans.
"On the face of it, these situations seem unfair," Sen. Chuck Grassley, R-Iowa, said in a statement. "The public is right to question why top executives aren't being held accountable, especially when banks themselves are using federal regulations to justify firing rank-and-file workers."
Yes there is a waiver process, but who do you think the banks stand up for in that case?
Buchanan says the big banks typically handle the waivers for executives and mid-level employees, but low-level workers like Eggers are given an FDIC phone number and sent packing.
Oh, and this fellow Eggers referred to who was fired. He is a 68 year old
making $30,000 a year. His crime. He inserted a cardboard dime in a coin
operated washing machine in 1963.
Wait to go banks, that’s really cracking down on fraud.