Wells Fargo, Diversity, and Economic Justice

Jun 23, 2015.

Religious conservatives are up in arms about a recent Wells Fargo commercial featuring a same-sex female couple meeting their new adopted daughter. Wells Fargo has admirably refused to pull the ad in the face of intimidation and threats of boycott and divestment by the evangelical conservative community.

This seems like good corporate citizenship in favor of diversity. Wells Fargo is even playing a role in the promotion of economic development in many of our nation’s large cities, by joining with the U.S. Conference of Mayors in the implementation of a CommunityWINS grant program funded by the Wells Fargo Foundation.

Ironically, one of the resolutions adopted at this year’s Mayors’ conference condemned big banks like Wells Fargo for charging excessive financing costs on municipalities–costs that hurt cities and the business that fill them far more than any philanthropic actions can make up for.

This is the paradox of corporate philanthropy and support for diversity. Wells Fargo will undoubtedly benefit from its stance on LGBT relations and the PR dividend of its community partnership program. But neither of those endeavors will pay social benefits that outweigh what Wells Fargo, and the industry it upholds, has cost communities. The company is one of those named in Saqib Bhatti’s groundbreaking “Dirty Deals” report, tracking Wall Street’s predatory handling of municipal finance. Specifically, Wells Fargo has been implicated in the shortchanging of public education funding, part of the overall trend by big banks to charge debilitating fees to manage public funds–our own money.

It doesn’t even come close to ending there. The D.C. Public Banking group has assembled a list of damning facts about Wells Fargo, including lawsuits for steering blacks and latinos into high-cost subprime mortgage loans, a HUD investigation for same, a settlement with the Justice Department for same, a profiteering fine in 2010, an SEC fine for risky mortgage-backed securities sold in 2007, and a fraud lawsuit by the Federal Housing Administration in 2012. The company has been implicated in mortgage robo-signing, interest rate swaps that have killed municipal finance, and even in money laundering for drug gangs. The company has as many as 18 offshore tax havens.

To make up for these pock marks, Wells Fargo is promoting diversity and economic development. But as CorpWatch reports, “Wells Fargo & Co. scores high on workplace diversity, but it has been accused of mistreating its poorer customers — many of whom are people of color.” The company has been charged “with a slew of abusive practices, such as charging higher interest rates than a borrower’s credit warrants and imposing excessive mortgage origination fees.” Environmental activists have also “charged the bank with financing environmentally destructive infrastructure projects in developing countries.”

Even if they are interested in spreading cultural rights among diverse groups, they aren’t interested in spreading the wealth among their workers. CEO John Stumpf was the nation’s highest-paid banking executive in 2012, making $19.3 million. Stumpf also

sits on the board of directors and executive committee of the Financial Services Roundtable, which lobbied against the Employee Free Choice Act in every quarter of 2008 and has made joining with the U.S. Chamber of Commerce to defeat it a top priority for 2009. The measure would make it easier for workers to bargain with employers for better wages, benefits, and working conditions by ensuring that they can exercise a free choice to join together in a union without management interference or intimidation.

Disregard for the rule of law, rejection of transparency, and astronomically high CEO pay are all indicative of a financial culture of aloofness, that neither understands nor cares about the struggles of working class Americans or people in poverty all over the world. Philanthropy devoted to limited, carefully tailored economic development, and commitments to identity-based (rather than economic) diversity demonstrate a symbolic attempt to prove a kind of social “trickle down” effect–that fabulously wealthy corporations and big private finance will pay a social dividend.

But no social dividend paid by the big banks makes up for what they do to people and communities–the legal stuff, let alone the illegal stuff. The high interest rates and finance fees alone are wrecking cities, contributing to poverty, crime, domestic violence, and police brutality.

Moreover, if trade deals like the TPP become reality–fast-tracked, anti-democratic, anti-transparency deals that allow multinational corporations to whittle away at public options under the guise of objecting to “anti-competitive practices,” then big banks will increasingly have the power to determine social outcomes, whether those are identity-based, civil rights, or economic justice outcomes. There is no reason to believe that a banking corporation that engages in criminal fraud, legal extortion, community-wrecking and anti-labor practices, or racist predatory lending, will consistently hold a decent line on LGBT or other civil rights issues. And in any event, injustice anywhere is a threat to justice everywhere.

So while we should celebrate Wells Fargo’s refusal to bow down to religious conservatives on LGBT issues, we also need to ask how many millions of people, of all sexual orientations, genders, and ethnicities, are hurt by the company’s actual banking, financial, and employment practices. More importantly, we should think about how much better off we’ll all be, what infinitely better shape we’ll be in to solve all sorts of identity-based oppression, when democratically-run, publicly-owned financial institutions are implemented all over the nation.

Scroll to Top