Bank Workers Rising
Last week, Los Angeles Mayor Eric Garcetti signed a city ordinance that sought to do something no other U.S.-based government had done before: Insulate bank employees—and through them, the bank’s depositors—from their bank’s high-pressure sales tactics. The ordinance stipulated that in order for the city to deposit its funds in a bank, that bank would have to produce documents demonstrating that it wasn’t linking its employees’ pay, or continued employment, to the sale of products that its depositors might—or might not—want or need.
There was ample reason why it was Los Angeles that produced the first such ordinance, for it was in Los Angeles that the first major Wells Fargo scandal (there have been several since) came to light. Faced with demands that they prod depositors to open additional accounts, Wells employees fabricated at least 3.4 million such accounts. The practice, which had been particularly pervasive in Southern California, first came to light when Wells employees brought the story to the Los Angeles Times. After their account was published, LA City Attorney Michael Feuer brought suit against Wells, initiating a chain of suits, settlements and penalties that to date have cost the bank more than $1 billion in fines and compelled it to sack its CEO, replace most of its directors, and place an ongoing and somewhat numbing series of four-full-page ads in leading newspapers attesting to the bank’s good, if only recently deemed necessary, moral character.
The workers who blew the whistle on Wells were among the nucleus of employees who formed the Committee for Better Banks (CBB)—an initiative of the Communications Workers of America (CWA). The project first took shape under the leadership of Larry Cohen, then the CWA’s president, who did as much or more than any other U.S. union president to build strategic alliances with unions overseas. It became quickly apparent to Cohen that in most other countries (particularly in Europe and Latin America), bank employees were almost universally unionized. In the United States, by contrast, not only were bank workers not unionized at all, but the rate of unionization in the Finance-Insurance-Real Estate sector was the lowest of any sector of the American economy.
Cohen, and his successor as president, Chris Shelton, decided to deploy organizers to sound out the nation’s bank workers. They found an industry whose greed had not only led to the Great Recession but also had compelled its employees to plunge customers into debt they couldn’t conceivably retire. They found bank workers indignant at a system that penalized them if they didn’t persuade customers to take on such debt or open new accounts.
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