I grew up reading comic books wanting to be a superhero. Comics taught me that those who speak the truth are heroes, all the rest are liars.

Thursday, July 22, 2010

Wells Fargo and Money, Lawyers, Lobbyists

It's about damn time we had some sort of finance reform...Obama Signs Overhaul of Financial System.

It couldn't have come a second too early! Wells Fargo Reports Net Income of $3.06 Billion; Up 20% from Prior Quarter.

"The law subjects more financial companies to federal oversight and regulates many derivatives contracts while creating a consumer protection regulator and a panel to detect risks to the financial system."
I'm not sure the bill is enough, but it's a start. To show a net profit of billions when everyone is hurting is just plain criminal. Oh and they did get a government bail out:
"Wells Fargo hit the jackpot. It was one of the first banks to get bailout funds - the biggest amount awarded in a single shot: $25 billion tax dollars."
But don't expect change anytime soon...old habits will be hard to break and since banks have so much in the way of money, lawyers and lobbyists, expect a fight.

Warren Zevon was a genius...I miss him...


Minnesota Central said...

A combination of historically low interest rates and reduced competition are fattening Wells Fargo and other home lender’s profit margins, which is why the HR 4173 Wall Street Reform and Consumer Protection legislation will help small community banks. Federal Deposit Insurance Corporation rates have been readjusted so premiums are lower for banks on Main Street and higher for banks on Wall Street.

There is also other changes that will impact banks (negatively) and aid small businesses and consumers (positively) … for example, it will shields small businesses like grocers and other retailers from out-of-control credit card transaction fees that banks and credit and debit card issuers charge businesses for each debit or prepaid-card purchase. This measure is expected to save small businesses billions.

Sadly, this reform did not come quick enough. Did you know Wells Fargo’s CEO John Stumpf was the highest paid at $21.3 million of all the TARP recipient banks ? Plus bonuses … which include amongst others $24,000 per year COLA since he had to move from Colorado to San Francisco … and that bonus was not a one-time but instead has been paid every year since 2004. BTW, did you know that the average bank teller in Minnesota made $11.86 per hour in 2009 … roughly the same as Stumpf’s COLA.

And, another BTW, did you know which state hasn’t had any bank failures in over a decade ?
North Dakota … are you familiar with the Bank of North Dakota ? Here’s their history …
During the early 1900’s, North Dakota’s economy was based on agriculture. Serious in-state problems prevented cohesive efforts in buying and selling crops and financing farm operations. Grain dealers outside the state suppressed grain prices; farm suppliers increased their prices; and interest rates on farm loans climbed.
By 1919, popular consensus wanted state ownership and control of marketing and credit agencies. Thus, the state legislature established Bank of North Dakota and the North Dakota Mill and Elevator Association.
Bank of North Dakota (BND) was charged with the mission of “promoting agriculture, commerce and industry” in North Dakota. It was never intended for BND to compete with or replace existing banks. Instead, Bank of North Dakota was created to partner with other financial institutions and assist them in meeting the needs of the citizens of North Dakota.
BND opened July 28, 1919, with $2 million of capital. Today, the Bank operates with more than $230 million in capital. The State of North Dakota began using bank profits in 1945 when money was first transferred into the North Dakota General Fund. Since that time, capital transfers have become the norm to augment state budgets.

Gosh, it looks like Socialism lives just to our west. The people of North Dakota get tax relief by having profits from the bank transferred to pay for state services.

Socialism must die … we need Capitalism at all costs.

Minnesota Central said...

Another interesting tidbit concerning Wells Fargo ... many times you can tell a lot based on whom they donate thier money to ... guess who was in Norm Coleman's Top Five ... that's right ... Wells Fargo ... no, not his number one ... that belongs to a Minnesota-based company who is also probably Tom Emmer's Indirect No. 1 ... Target. You probably heard how Target has given $150,000 to MN Forward ($100,000 cash and another $50,000 of in-kind goods and services) so that commercials can be run to support Tom Emmer for Minnesota Governor.

Shop with your feet.