The revelation that low level branch staff at Wells Fargo retail operations opened accounts against the interests and knowledge of its customers is bad.
In fact, it so bad that the bank's CEO faced a hammering at the hands of both the House and the Senate in the wake of the scandal, and perhaps far worse moving forward.
Turns out, in terms of bank scandals, the Wells Fargo indiscretions are fairly tame compared to what’s happening across the pond right now at the Royal Bank of Scotland.
Newly leaked files revealed in a Buzzfeed report pull back the curtain on a “Dash for Cash” practice where staffers were allegedly instructed to look for otherwise healthy business banking customers to steer to the bank’s troubled business unit, the Global Restructuring Group.
Once there, these files reveal, the bank began a systemic crippling of those client’s businesses through deliberate fees and interest-rate hikes and asset fire sales.
And unlike the Wells account scandal, this was a top-to-bottom effort to shore up the balance sheet of RBS.
What’s more, RBS is taxpayer-owned, well 73% of it, anyway.
In the Wells Fargo scandal, there is the impression that bank staff felt they could get away with opening these accounts as the damage on a per-client basis remained minimal. There may be some redemption, now, in this feeling that these crimes were as close to victimless as possible.
The RBS “dash for cash” actually included executives forwarding managers “target lists” of loans secured against properties that were then scoured for potential clients to force into costlier loans, according to the in-depth report.
RBS somehow still denies everything. From the Buzzfeed report:
RBS has repeated its denial that the property division profited by buying assets cheap and selling them on for an inflated price. But confidential internal audit documents note that West Register is “used by GRG to acquire property assets from distressed situations” and “seeks to exit properties via a future commercial sale in order to extract maximum economic value” that “can often result in a capital gain in relation to the original property acquisition.”
Oh RBS you are so unoriginal. pic.twitter.com/SHKAJglJF9
— adam spittler (@aspit) October 10, 2016
So, as you can imagine, the Ministers of Parliament are up in arms and calling for the heads of these executives, despite knowing about Dash for Cash since 2008, in a fashion similar to our legislators here.
But that's not the worse part. The worse part is knowing that while RBS set a new low in this scandal, one far worse than Wells Fargo, it stands to reason that there very well could be another financial institution still out there, doing something even worse.
They just haven't been caught, yet.
