The eCrozier

The most heart-felt experience I had at my son’s wedding last Saturday was when people from various parts of his 29 years on this earth came up to me separately and shared stories about him. The different stories all had a similar theme: “John’s a good man. He’s honest and true. I count on him as a friend.” You can imagine how that moved me. Kelly and I raised him to be that kind of man.

That’s not easy for parents to do. Beginning with the Vietnam War and Watergate and up to our present day, our public leaders have not modeled such honesty and decency, so our children receive mixed messages as they grow up. We’ve experienced a cultural downward slide toward greater self-interested behavior that seeks to benefit one person or group regardless of whether or not it’s ethical. There’s an old saying that you can tell a lot about a person’s character by how they act when they think no one’s watching them. It shouldn’t be about getting away with something just because one can get away with it.

The latest example is Wells Fargo Bank. It seems branch employees were under heavy pressure to do what is called “cross-selling.” So, if you had a checking account with the bank, they’d try to get you to take out a loan or a new credit card with them. Employees reported that they received pressure from their bosses to “cross-sell” and were afraid that they’d lose their jobs if they didn’t. So, many of the branch employees across the country opened thousands of additional accounts without their customer’s knowledge. The Consumer Finance Protection Bureau just fined the bank $185 million, which is a small fraction of the approximately $80 billion Wells Fargo makes each year.

Wells Fargo isn’t alone. By one estimate, all of the banks that engaged in similar unethical behavior to increase their profits have paid only $110 billion in fines since the 2008 financial crisis (again, just a small fraction of their total profits since then). These fines have most often been paid with no admission of guilt and no upper-level managers going to jail. The result is predictable: there’s no connection being made between unethical (and often, illegal) behavior and any dire consequences. The fines become a small price to pay to make bigger profits, just another cost of doing business. But at what loss to our collective moral character? Now, it’s being reported that two of Wells Fargo’s top executives will forgo some of their future unvested equity awards, stock options, and annual bonuses. I guess that’s a start, but it’s hardly a consequence that’ll deter such behavior in others. Instead of $100 million, they’ll have to “settle” for only $10 million or so in compensation, all the while never spending even one night in jail. Meanwhile petty thieves will spend months behind bars.

We try to raise our children to be honest and just. We teach our children what we were taught, that “crime does not pay.” Or, in biblical terms, we teach them that “the wages of sin is death.” But, at least temporally speaking, these days “the wages of sin aren’t half bad!” That’s the message being received by our children when they learn about Wells Fargo and what some of the other banks have gotten away with. We need a very different message.

+Scott