12 Jul Bank of America: a Rotting Fish
As we have mentioned here from time to time, one of the unexpected joys of working for and writing on behalf of a large financial services firm was the occasional piece of hate mail we’d receive in reply. In our now fading memories, every piece was spittle-flecked and scribbled furiously in crayon (which is the writing instrument of choice in mental health wards). In truth, of course, the hate mail was usually written by one of the firm’s retail clients and was all but inevitable, given the vastness of our distribution list and the pointedness of our commentary.
Of all the genres of hate mail we received, likely the most compelling was that which asked who the hell we thought we were, attacking the President and the government for their moral failings, given the company we worked for. In some ways, this was a legitimate and effective rebuttal to our criticism. Both the firm we worked for and its insurance company parent had had serious ethical issues in the preceding years, and we, as representatives of that firm, carried that burden. In other ways, the response was asinine. For starters, we didn’t have anything at all to do with those ethical issues. Moreover, we spent much of our time criticizing the type of behavior responsible for those failings, in addition to political cronyism, all of which would eventually get us fired. In other words, we tried our best – and we know we had countless allies within the firm, some of whom are likely reading these words right now – but there wasn’t much we could do. The problems started waaaaaay above our pay grade.
Our only other option, we suppose, would have been to quit the firm in protest, hoping that our little gesture would cause some soul-searching at the top of the food-chain and a consequent change in culture and behavior. As luck would have it, we tried that at the next company for which we worked. And while it made us feel a little better for a little while, as the whole world knows, it didn’t do much to stop that company from doing its damnedest to crash the global economy with its corruption.
In any case, our point is that corruption generally starts at the top. And if the people at the top don’t care about corruption – either because they are corrupt themselves or because they have other priorities – then the corruption grows and, in time, causes bad things to happen.
We mention all of this today because of yesterday’s news concerning the world’s second-biggest bank, Bank of America. NPR has the details:
Bank of America, the nation’s second largest bank, has been ordered to pay more than $100 million to customers for double charging insufficient fund fees, withholding reward bonuses and opening accounts without customers’ knowledge or permission. The bank is also on the hook for an additional $150 million in penalties for the same violations.
The Consumer Financial Protection Bureau announced Tuesday that an investigation found that Bank of America harmed hundreds of thousands of customers across multiple product lines over a period of several years through a series of illegal practices. As a result, Bank of America was ordered to pay over $100 million to customers and another $90 million in penalties. A separate $60 million fine has been ordered by the Office of the Comptroller of the Currency for violating laws around overdraft fees.
CFPB Director Rohit Chopra said in a news release that Bank of America’s double-dipping on fees, opening accounts without customer consent and withholding rewards “are illegal and undermine customer trust,” practices he said the CFPB will put an end to across the banking system.
Now, given that the earliest documented date of the violations committed by Bank of America was 2012, one might be inclined to suggest that the guy who took over as the CEO of the company two years earlier and remains in that position today should bear the brunt of the blame. After all, everything happened on his watch. One suspects, however, that Brian Moynihan will not bear, much less accept, any of the blame. Indeed, one suspects that he will suffer no negative consequences whatsoever.
Brian Moynihan, you see, has bigger fish to fry. While defrauding customers and creating phony accounts might seem like a moral failing to some, Brian Moynihan is much more concerned about whether or not you, as an individual or as a company, are worthy of doing business with him and his bank. As we noted back in January, in the wake of the annual World Economic Forum Meeting in Davos, Moynihan has a world to save and expects you to get with the program:
For years, Moynihan has worked directly with Klaus Schwab and the WEF to create international standards to impose on corporations, presuming to usurp the power of investors to judge a company’s worth and the power of voters worldwide to determine their nations’ policy agendas. As the chairman of the WEF’s International Business Council, Moynihan has – in conjunction with Schwab – ceaselessly endeavored to compel corporations to bend to the will of the “Davos Elite.” And last week, while Larry Fink was busy whining, Brian Moynihan could hardly control his excitement:
Bank of America Chief Executive Brian Moynihan said Wednesday that current efforts to produce a set of official global standards on ESG issues were vital to “align capitalism with what society wants from it.”
In 2020, Moynihan — who is also chair of WEF’s International Business Council — and WEF founder and chair Klaus Schwab worked with the big four accountants to create a set of common stakeholder metrics for companies to follow….
Moynihan also said it was crucial that sustainability and ethical standards became official and global….
[W] ith standardized, cross-jurisdiction rules that are part of companies’ annual reports and audited, he continued, “then frankly, an investment manager, a consumer, society, others can sit there and say, here’s a line that is acceptable and you’re either above it or below it.”
“If you’re below it we shouldn’t do business with you, and if you’re above it, tell us how you’re making progress along these important things.”
It is absolutely critical, in any discussion of stakeholder capitalism, woke capital, ESG, or whatever you want to call it, to remember that the entire operation is, at heart, a MORAL operation. It is an effort to change the moral foundations of capitalism and to impose a new, more “enlightened” moral code on the commercial functioning of society. This is the conceit that will, if left unchecked, destroy the very economic foundations on which Western Civilization stands. It is also the conceit that compels bankers, regulators, investors, politicians, and Gaia knows who else to overlook the types of real-life moral failings that are rife at Bank of America. Yes, the firm paid a fine. But no one will go to jail. No one will suffer any serious consequences. A few low-level functionaries may lose their jobs, but Bryan Moynihan won’t. It won’t even be a question. If anything, he’ll likely be rewarded with a bump in pay. The moral failings documented above are piddling in comparison to making the “sustainability and ethical standards official and global.” In the woke capital moral hierarchy, fraud doesn’t rate much outrage, but failing to find a financial path to Net Zero would constitute a generational betrayal for which even eternity in Cocytus, the frozen lake at the center of Hell, would constitute too generous a punishment.
So…thank Heaven for Brian, we guess?
A fish, as the old proverb puts it, rots from the head down. We – lowly Washington analysts – couldn’t change the culture at our old firms any more than the individual bankers who defrauded customers at Bank of America could have changed the culture there.
The catch, of course, is that the head of the fish known as Bank of America doesn’t think he’s rotten. Rather, he thinks he stands above the rest of us, nobly discovering which companies “we shouldn’t do business with” because of their moral decrepitude related to sustainability.
Much of the rest of the financial world agrees with him, unfortunately. So, prepare for a shift in financial morality.
Oh…and check your bank statements for fraudulent charges.
