Posts Tagged ‘HSBC’

This story was written by Katie Rose Quandt and originally published on BillMoyers.com.

Front-line workers at our nation’s big banks — tellers, loan interviewers and customer service representatives — are required by their employers to exploit customers, according to a revealing report out today from the Center for Popular Democracy (CPD). Big banks have internal systems of penalties and rewards that entice employees to push subprime loans and credit cards on customers who would be better off without them.

CPD’s report outlines several illegal predatory practices big banks have been caught employing, usually via their front-line workers:

Blatantly discriminatory lending:
In 2011 and 2012, Bank of America and Wells Fargo paid out settlements for charging higher rates and fees to tens of thousands of African American and Hispanic borrowers than to similarly qualified white customers. Minority customers were also more likely to be steered into (more expensive, riskier) subprime mortgages.
Manipulating payment processing to maximize overdraft charges:
When a savings account balance drops too low, the bank charges a hefty overdraft fee on each subsequent purchase. Both Bank of America and US Bank paid settlements for intentionally processing customers’ largest debit card payments first, regardless of chronological order, in order to hit $0 faster and maximize overdraft fees. US Bank was also accused of allowing debit card purchases on zero-balance accounts to go through (and incur overdraft fees), instead of denying the charges upfront.
Forcing sale of unneeded products:
Wells Fargo, JP Morgan Chase and Citigroup were accused of forcing customers to purchase overpriced property insurance.
Manipulative sales quotas:
Lawsuits show Wells Fargo and Bank of America created incentive programs for employees with the interests of the company — not the customer — in mind. Wells Fargo’s sales quotas encouraged bank workers to steer prime-eligible customers to subprime loans, while falsifying other clients’ income information without their knowledge. Bank of America’s “Hustle” program rewarded quantity over quality, encouraging workers to skip processes and checks intended to protect the borrower.

Instead of cutting back on the risky, unethical practices that led to the Great Recession, the CPD report asserts that big banks have not learned from their mistakes. Bank workers report higher levels of sales pressure in 2013 than in 2008, and most do not have the job security or seniority to simply refuse to hawk credit cards or steer customers into risky financial situations. While the financial sector is turning near-record profits, the average bank teller made just $12.25 an hour in 2013 (a real-dollar decrease from 2007), causing 31 percent of tellers’ families to rely on public assistance. What’s more, 85 percent of these underpaid front-line bank employees are women, and one-third are people of color. Most are in no position to risk losing their job or having their pay docked for stepping out of line.

Several anonymous big bank employees went into detail about how their employers incentivize sales:

An HSBC employee reported that when workers fell short of sales goals, the difference was taken out of their paychecks.
A teller at a major bank said she is expected to sell three new checking, savings, or debit card accounts every day. If she falls short, she gets written up.
Customer service representatives at one major bank’s call-center said everyone is expected to make at least 40 percent of the sales of the top seller. Credit card sales count for extra, encouraging callers to push credit cards on customers who would be better served with checking or savings accounts.
A call-center worker said she offers a credit card to every customer, regardless of whether it would be beneficial. She explained: “If you aren’t offering, you can get marked down — the managers and Quality Analysts listen to your call, and can tell if you aren’t offering.”

“We’re not servicing their needs,” said one front-line worker. “What they want, what they need, isn’t important to us. Selling them a product is … Some of our customers just have their savings, many are just retirees.”

As the report concludes, “Our nation’s big banks are committed to a model that jeopardizes our communities and prevents bank employees from having a voice in their workplace.”

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Why is the Obama Administration Terrified of the Banksters that violated US law in destroying the economy, violating US law in laundering money for drug cartels, violating US laws by financial deals with Iran? Why is President Obama terrified of criminal bankers? The answer is simple. The US government is corrupt to the core.

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Yesterday, March 7 2013, Middle Class Senator Elizabeth Warren grilled US Treasury officials in congress as to why they refused to push the Justice Department to prosecute the bankers of HSBC North America, who knowingly laundered over $800 million for the drug cartels of Colombia and Mexico.

The Treasury Department warned the bankers to stop the criminal acts, the bankers continued, the US Treasury Department then leveled a $1.6 billion dollar fine against the bank, which it paid. No criminal charges have been filed even though there’s sufficient evidence to level that massive of a fine and the bank was willing to pay it.

In the hearing, Warren asked “HSBC paid a fine, but no one individual went to trial, no individual was banned from banking, and there was no hearing to consider shutting down HSBC’s activities here in the United States,” Warren said. “So, what I’d like is, you’re the experts on money laundering. I’d like an opinion: What does it take — how many billions do you have to launder for drug lords and how many economic sanctions do you have to violate — before someone will consider shutting down a financial institution like this?”

Treasury officials refused to answer the question. Apparently, Warren is the only person in the senate or the US House of Representatives that thinks it should be jail time for big time US senate and house campaign contributors that launder drug cartel money. There are plenty of reasons the government will pay tens of thousands of dollars to convict somebody caught smoking marijuana and not prosecuting money launderers.

HSBC donated lots of money during this last election cycle to plenty of congressmen and congresswomen, as well as senators. The company is primarily an investment bank, but also does some commercial banking. The entire HSBC North American Holding is worth over $320 billion as of September 2012. In other words, a ton of the 1 percent have invested with and through this company.

HSBC’s stock price hovers around $55 per share, already down from nearly $100 five years ago. If criminal charges are brought against the bankers, if they faced prison time, the stock prices would plummet. And if the government considered closing the bank for its crimes, the 1 percent that have invested in the bank would lose their investments because the death of the company means the current $55 a share would drop to $0.

Doing such a thing would set a bad example for the rest of the investment community. Perks offered by those folks might dry up if they get angry at government officials for doing something as idiotic as making rich criminals responsible for their actions. The 1 percent pays their government sufficient money every year to make sure their investments continue to gain value, even when this is at the expense of the 99 percent, which is more often the case than not. Prosecuting drug money laundering bankers would not be in harmony with the interests of the 1 percent. So don’t expect Obama’s justice department to do anything about drug money laundering bankers even though there’s enough evidence to level a $1.6 billion fine.

The economic drama unfolding for the last thirty-two years continues. The game played against the middle class continues to be rigged against them. If you’re rich enough, and you donated enough money to Obama, both major political parties, and other government officials, you can probably murder a middle class person in broad daylight, post the video of the criminal act on Youtube, and the US Justice Department will say there’s not enough evidence to prosecute you.

Check out the video below.

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