If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…. I believe that banking institutions are more dangerous to our liberties than standing armies…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
Wells Fargo has fired about 5,300 workers after an investigation found that “hundreds of thousands of unauthorized deposit accounts” had been opened on behalf of customers as well as “tens of thousands of credit cards” without consent, according to the Los Angeles City Attorney’s office. The bank was slapped with $185 million in fines and civil penalties by city, county and federal authorities.
However, I would not be too concerned about Bad Fargo’s bottom financial or ethical well being. Now, had any member of the general public decided to open unauthorized deposit accounts and then tens of thousands of credit cards without consent – we would have been criminally charged with Theft, Conversion, Fraud, Breach of Fiduciary Duty, as well as many more violations of federal and state laws, rules and regulations.
So far this story has received very little in depth analysis from the media. What does this cautionary tale tell? Nothing, it’s business as usual if you have deep corporate pockets and a well paid lobbyist. There is no consequence to Bads Fargo. It pays a small overall fine, which is an insignificant portion of its annual revenue. It will not be dissuaded from engaging in these type of behavior again. They will just try and be smarter about doing such in the future.
The Wells Fargo situation played out over 5 years, including its merger with Wachovia after the 2009 banking crisis. So this is not a rogue trader or a corporate terrorist attack (except from those within on its own clientele). No, instead this is part of a systematic methodology to please bottom line concerns and to achieve bonus pool payments and other big incentives. This event shows that Bad Fargo’s policy and procedures were inadequate, its internal controls were non-existent. Most importantly its supervisory review system was more than deficient, but rather it was complicit and contributed to the culture of illegality that runs rampant at Bad Fargo, and many other financial institutions.
So what would be the appropriate remedy?
First, Bad Fargo should have its Banking Charter revoked. Obviously they have not acted in the best interest of their clients, they have violated privacy rules.
Next, Bad Fargo should be disallowed from offering any credit related cards. Meaning bank debit cards are fine, but as an unsavory corporate banking actor Bad Fargo should no longer profit from the people and system it has used to exploit and rob them.
Finally, the Congress should reenact the Glass-Stegall Act
So, by a hop and a skip this brings us around to discussing Anti-Money Laundering issues concerning the cannabis industry in the USA. If Bad Fargo can engage in these type of transactions that all derived from legal deposits, we ask why is it still illegal for banks to accept legal cannabis business dollars.
In 2001, after the passing of the US Patriot ACT, banks and broker dealers were required to perform due diligence regarding the origin of funds being invested. Please note that terrorists are not officially licensed by a state, don’t provide tax information, don’t have banking, accounting and legal references, and don’t make required tax payments based on tracking of inventory of weapons sold and paid for.
On the other hand, corporate members of the legal cannabis industry are licensed with a state, have an address and full legal name, have taxing identification, are generally easily searchable and simply are not terrorists, although they are claimed to be “criminals” for banking purposes. The idea that AML concerns stymies the providing of banking services to a licensed industry is absolutely absurd and not legally defensible. In fact, such a stance by the government and the state creates more crime because there is no where to stoire large cash reserves. It is like a traffic cop holding hios hand up to stop and waving you to go at the same time. In the words of Bart Simpson – a paradox is – “You are a damned if you do and damned if you don’t”.
When will Americans wake up to see and protest the corruption and crime that is occurring around and to them every day rather than providing for fair and reasonable banking practices for individuals and corporations. Especially those in the cannabis industry. Only time will tell…
Authored By: Barry Gainsburg