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wells fargo
Wall Street Banks Accused of Trying to Sabotage Key Consumer Protection Rule
"The CFPB must stop this ploy by the biggest banks to keep us trapped under their thumbs."
Nov 15, 2024
Consumer advocates applauded last month as the Consumer Financial Protection Bureau finalized a rule aimed at making it easier for people to switch financial institutions if they're unhappy with a bank's service, without the bank retaining their personal data—but on Thursday, more than a dozen groups warned the CFPB that major Wall Street firms are trying to stop Americans from benefiting from the rule.
Several advocacy groups, led by the Demand Progress Education Fund, wrote to CFPB director Rohit Chopra warning that major banks—including JP Morgan Chase, Bank of America, Citi, TD Bank, and Wells Fargo—sit on the board of the Financial Data Exchange (FDX), which has applied to the bureau for standard-setting body (SSB) status, which would give it authority over what is commonly known as the "open banking rule."
Standard-setting authority for the banks would present a major conflict of interest, said the groups.
The banks are also on the board of the Bank Policy Institute, which promptly filed what the consumer advocates called a "frivolous lawsuit" to block the open banking rule when it was introduced last month, claiming it will keep banks from protecting customer data.
At a panel discussion this week, Bank of America CEO Brian Moynihan also said the open banking rule, by requiring financial firms to unlock a consumer's financial data and transfer it to another provider for free, would cause "chaos" and amplify concerns over fraud.
"The American people are fed up with Wall Street controlling every aspect of their lives and the open banking rule is an opportunity to give all of us some financial freedom."
The groups wrote on Thursday that big banks want to continue to "maintain their dominance by making it unduly difficult for consumers to switch institutions."
"The presence of these organizations on both the FDX and BPI boards undermines the credibility of FDX and presents various concerns relating to conflict of interest, interlocking directorate, and antitrust law," they wrote.
Upon introducing the finalized rule last month, Chopra said the action would "give people more power to get better rates and service on bank accounts, credit cards, and more" and help those who are "stuck in financial products with lousy rates and service."
The coalition of consumer advocacy groups—including Public Citizen, the American Economic Liberties Project, and Americans for Financial Reform—urged Chopra to reject FDX's application for standard-setting authority so long as the banks remain on its board.
“It would be a flagrant conflict of interest for the same banks who are suing to block the open banking rule because it threatens their market dominance to also be in charge of implementing it," said Demand Progress Education Fund corporate power director Emily Peterson-Cassin. "The American people are fed up with Wall Street controlling every aspect of their lives and the open banking rule is an opportunity to give all of us some financial freedom. The CFPB must stop this ploy by the biggest banks to keep us trapped under their thumbs."
The groups called the open banking rule "a historic step forward for the cause of giving consumers true freedom intheir financial lives."
"For this reason, it is imperative that SSB status not be granted to an organization whose board members are, either directly or through a trade association they are participating in, suing the CFPB to stop the rules from taking effect, particularly when such members may be ethically conflicted from such dual participation," said the groups. "By rejecting SSB status for FDX or any other organization with similar conflicts of interest pertaining to Section 1033, the CFPB will help prevent big banks from sabotaging open banking rules."
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A Death in a Cubicle Undermines the Case for In-Person Work
How can an employee die at her desk and remain undiscovered for so long in a place supposedly designed to enhance collaboration and human connection?
Sep 03, 2024
The recent, tragic story of Denise Prudhomme, a 60-year-old Wells Fargo employee who was found dead at her cubicle four days after she came into her office, challenges the prevailing narrative about the supposed social and collaborative benefits of in-person work. Prudhomme's death went unnoticed in an environment that is often portrayed as fostering better communication and team cohesion. This disturbing reality casts serious doubt on the claims made by many corporate leaders that bringing workers back to the office is essential for their well-being and collaboration. The story reveals a stark contrast between the idealized vision of in-office work and its practical shortcomings.
Corporate leaders frequently argue that remote work results in isolation and a loss of team spirit, emphasizing that the physical presence of employees is necessary to maintain a connected and innovative workplace. Yet, Prudhomme's case suggests otherwise. Despite being in the office, her presence—or rather, her tragic absence—went unnoticed for days. This raises a profound question: How can an employee die at her desk and remain undiscovered for so long in a place supposedly designed to enhance collaboration and human connection? Several employees noticed a foul odor but attributed it to faulty plumbing rather than the grim reality. This oversight reveals a significant disconnect between what companies claim about in-person work and what actually happens on the ground.
The death of Denise Prudhomme is a stark reminder that the supposed benefits of in-person work are often overstated or misunderstood.
Recent research adds another layer to this discussion. The Survey of Working Arrangements and Attitudes (SWAA), led by Nick Bloom and his colleagues, shows that employees spend only about 80 minutes on in-person activities during a typical office day. The rest of their time is spent on tasks like video conferencing, emailing, and using communication tools—tasks that are equally manageable from home. These findings highlight the inefficiencies of in-office work, where the supposed benefits of collaboration are minimal, and the majority of the workday could be performed just as effectively outside the office.
The push for in-office work is often framed as an attempt to combat isolation and enhance teamwork, but the truth seems to lie elsewhere. Instead of being about employee welfare, it may be more about outdated managerial control and resistance to change, as found in recent research led by Professor Mark Ma from the University of Pittsburgh, alongside his graduate student Yuye Ding. This compulsion not only creates a toxic work environment but also perpetuates a lack of genuine engagement among employees. The death of Prudhomme, unnoticed by her colleagues, serves as a grim reminder of the consequences of such a culture.
The Wells Fargo incident also underscores the limitations of traditional office environments. Many workplaces are structured in ways that can be isolating. This reality challenges the narrative that in-office work fosters better mental health and social engagement. If the physical presence of employees was genuinely the solution to isolation, how could such a tragedy occur without anyone noticing for so long? It becomes evident that the drive to return employees to the office is not necessarily about their well-being or improved collaboration but often about control, visibility, and maintaining the status quo.
To genuinely improve workplace dynamics and employee satisfaction, companies should reconsider how they structure in-person workdays. By focusing on meaningful in-person engagements and allowing remote work for tasks that do not require physical presence, companies can reduce unnecessary commuting, increase productivity, and significantly improve employee well-being.
The death of Denise Prudhomme is a stark reminder that the supposed benefits of in-person work are often overstated or misunderstood. The reality of her unnoticed death in a supposedly collaborative office setting reveals the emptiness of corporate claims about the need for physical presence to foster better teamwork and social connections.
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Analysis Details How Wall Street Underwriting Quietly Funnels Billions Into Fossil Fuels
"Underwriting is a huge missing piece of net-zero transition plans, allowing big U.S. banks to continue to help fossil fuel companies raise billions of dollars with limited scrutiny," said one campaigner.
Jul 24, 2023
A report out Monday sheds light on how big U.S. banks' underwriting of bonds and equities for polluting corporations constitutes a "hidden pipeline" for fossil fuel financing.
It's no secret that financial institutions play a leading role in driving the climate emergency. Since 2016, the year the Paris agreement took effect, the world's 60 largest private banks have provided more than $5.5 trillion in financing to the fossil fuel industry, flouting their pledges to put themselves and their clients on a path to net-zero greenhouse gas emissions as the window to avert the worst consequences of the intensifying climate crisis rapidly closes.
But banks' underwriting activities receive far less attention than their direct lending practices, even though both are instrumental in enabling fossil fuel expansion and must be reformed to rein in the industry most responsible for imperiling the planet's livability.
That's the key takeaway from a new analysis of Wall Street's participation in capital markets published by the Sierra Club's Fossil-Free Finance campaign.
"By only focusing on emissions reduction targets for their lending activities, banks are conveniently excluding half of their fossil fuel financing from their climate commitments."
"Banks play a vital role in capital markets," the report explains. "Acting as underwriters, they are the gatekeepers of fossil fuel companies: they advise companies issuing bonds and equities, hold the vital information on the issuer, and help market the instruments to investors disclosing only the necessary risk."
Since 2016, the six largest U.S. banks—JPMorgan Chase, Citi, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs—have provided more than $433 billion in lending and underwriting to 30 of the companies doing the most to increase fossil fuel extraction and combustion worldwide, the report notes. More than three-fifths (61%) of that financing comes from underwriting, with those half-dozen banking giants issuing $266 billion in new bonds and equities for the world's top 30 fossil fuel expansion firms.
Climate justice advocates have long criticized the concept of "net-zero" because, they argue, allowing planet-heating pollution to be "canceled out" via dubious carbon offset programs or risky carbon removal technologies is an accounting trick that doesn't guarantee the significant emissions cuts needed to avoid the climate emergency's most destructive impacts.
But even if one accepts the premise of net-zero, big U.S. banks' policies on the topic are misleading.
"Despite the importance of capital markets activities in helping fossil fuel companies secure new funding, banks focus primarily on lending, while downplaying the importance of underwriting, when setting their emissions reduction targets," the report says. "Banks are performing sleight of hand, distracting investors and regulators with net-zero transition plans that are half-finished, while continuing to funnel money to fossil fuel companies via capital markets with limited scrutiny."
In a statement, Adele Shraiman, senior campaign strategist with the Sierra Club's Fossil-Free Finance campaign, said that "without banks, fossil fuel companies cannot raise money through capital markets."
"By downplaying their role in capital markets and refusing to include facilitated emissions in their climate targets, big U.S. banks are intentionally sidestepping a major source of real-world emissions and making it impossible to meet their own net-zero commitments," said Shraiman.
According to the report: "Only three of the six major Wall Street banks include bond and equity underwriting in their sectoral emissions reduction targets—JPMorgan Chase, Goldman Sachs, and Wells Fargo. The remaining three banks have so far chosen to only apply emissions reduction targets to lending activities."
However, "even among those who have set emissions reduction targets that include underwriting, insufficient disclosures and lack of standardization make it difficult to understand how robust banks' facilitated emissions accounting methodologies are, and what progress they are making toward achieving their emissions reduction targets," the report adds.
In a blog post, Shraiman wrote that "banks don't want us to know all of the ways they help fossil fuel companies raise funds to continue building the pipelines, oil rigs, fracking wells, and coal mines that are destroying the climate and hurting communities."
"But investors, regulators, and customers around the world see through their duplicity," she continued. "We are demanding complete, robust, and transparent net-zero plans that cover all types of financing activities and will lead to real-world emissions reductions in line with our global climate goals."
"Banks don't want us to know all of the ways they help fossil fuel companies raise funds to continue building the pipelines, oil rigs, fracking wells, and coal mines that are destroying the climate."
Monday's report comes at a key moment in the fight to stop Wall Street from continuing to fund climate chaos.
As the Sierra Club observed, "Banks currently point to a lack of industry standards on underwriting to justify why they do not disclose or set targets for facilitated emissions." However, the industry-led Partnership for Carbon Accounting Financials is expected to release its updated methodology on accounting for and reducing facilitated emissions in the near future.
"Underwriting is a huge missing piece of net-zero transition plans, allowing big U.S. banks to continue to help fossil fuel companies raise billions of dollars with limited scrutiny," Shraiman said. "By only focusing on emissions reduction targets for their lending activities, banks are conveniently excluding half of their fossil fuel financing from their climate commitments."
"It's time," she added, "for the major Wall Street banks to adopt a robust and consistent methodology for accounting facilitated emissions, and take full responsibility for the climate impacts of their underwriting decisions."
The International Energy Agency has stated unequivocally that there is "no need for investment in new fossil fuel supply in our net-zero pathway."
After the Intergovernmental Panel on Climate Change released its latest assessment in March, United Nations Secretary-General António Guterres said that limiting temperature rise to 1.5°C is possible, "but it will take a quantum leap in climate action," including a ban on approving and financing new coal, oil, and gas projects as well as a phaseout of existing fossil fuel production.
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