Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘banking’

Regulating from Below: How Front-Line Bank Workers Can Help Fix the Financial Industry

Thursday, September 27th, 2018

Ten years after risky practices at our largest banks wreaked havoc on the global economy, we face a financial sector that, despite some reforms, remains broken in fundamental ways.

Wall Street has beat back many of the kinds of structural changes that happened after the Great Depression, and the reforms that have happened in the United States are rapidly being undermined by the Donald Trump administration. Banking scandals still abound—from Wells Fargo to Santander to Bank of America to Deutsche Bank. Consumers are encouraged to take on more debt than they can bear. Trust in the banking system remains dreadfully low while opacity of the financial system is near an all-time high.

In the wake of the 2008 crash, there was a renewed intensity by regulators and central banks to stop the bleeding caused by the banks’ irresponsible behavior, but that coordination has slipped away while power in the sector has concentrated in the hands of fewer and fewer banks and corporations.

The public is right to sound the alarm.

Strengthening oversight of the financial system is necessary. Regulations are the guardrails that keep our global banking system from veering off course and into crisis. But while these rules are critical, they are stronger when paired with unions.

Unionization in the financial sector—the norm in nearly all advanced economies, except for the United States—provides a way to “strengthen financial regulation” from the ground up. Unions are a countervailing force against the worst tendencies of the financial sector, in part by guaranteeing that pay schemes are not driven by the extreme sales pressure and unfair performance metrics.

UNI Global Union has worked with finance unions around the world for many years to develop the best practices in this area, and many unions have negotiated what are called “sales and advice” clauses in their agreements to stop predatory Wells Fargo- and Santander-esque practices. In Italy, unions have a national, sector-wide agreement to rein in the high-pressure sales goals that harmed millions of consumers in the United States.

The Nordic unions provide another example. The Nordic Financial Unions have input into nearly all aspects of banks’ changing business practices and financial regulation through dialogue with global authorities. This cooperation exists because management sees the long-term benefit of partnering with unions for the bank, for workers and for consumers.  

Dialogue and partnership are especially important as banks that were “too big to fail” have grown even bigger. Through a cycle of constant mergers and acquisitions, global financial institutions have gotten bigger, more powerful and harder to regulate. Worker voices must be integrated into corporate governance of financial institutions to provide a backstop against abuses.

The importance of workers’ involvement in finding solutions to problems in our financial system cannot be stressed enough, given that executive decisions at systemically important banks easily affect the economy and our daily lives. This inclusion relies on an environment and culture in which workers are managed through respect and not fear, with protection against unfair dismissal and retaliation, will foster the trust and security required for workers to speak out against egregious practices  

Several large banks taking steps in the right direction by signing agreements with UNI to ensure that bank workers have the right to organize without the opposition and hostility common in the United States.   

Most recently BNP Paribas signed a Global Agreement with UNI that goes beyond the right to organize and also sets standards on paid maternity leave and insurance for its 200,000 employees around the world. 

In the United States, there are virtually no front-line bank employees protected by the kinds of collective bargaining agreements that have helped pump the breaks on abuses in other countries.

That is why U.S. bank workers have joined together to collectively speak out against questionable practices—exposing those that are risky, detrimental and fraudulent—and succeeded in challenging some of the industry’s vilest practices.

UNI Global Union-Finance and affiliates, such as the CONTRAF-CUT (Brazil), the NFU, La Bancaria (Argentina), the Communications Workers of America (CWA), along with the Committee for Better Banks, also have launched a global campaign for “regulation from below.” It puts workers’ voices and workers’ rights at the forefront of creating a healthier world financial system.

We know that “regulations from above” can and do work. In the U.S., Glass-Steagall, Dodd-Frank and the creation of the Consumer Financial Protection Bureau have curbed banks’ ability to game the system and hurt working people.

A multinational coalition of bank workers standing together to help fix the financial industry can help re-ignite the global approach needed to bring trust to our banking system.

Banks and other large financial institutions must act responsibly and be accountable when they do not. Governments must have their feet held to the fire to enforce, enhance and defend protections against unethical banking practices.

That’s something that workers united, and unafraid to speak out, are well positioned to do.

This post comes on the heels of a new report, authored by UNI Finance and the AFL-CIO, with support by Friedrich Ebert Stiftung New York, titled Tipping the Balance: Collective Action by Finance Workers Creates ‘Regulation from Below.

This blog was originally published by the AFL-CIO on September 27, 2018. Reprinted with permission. 

About the Author: Christy Hoffman is the General Secretary of the UNI Global Union, a federation of 20 million service workers from more than 150 countries

2011’s Hero

Wednesday, July 6th, 2011

Image: Bob RosnerWith an economy going sideways, CEOs ladling on lavish pay packages and far too many still unemployed, it’s rare that a smile just explodes across my face these days from something I hear in the news.

That is until I heard of Warren Nyerges. He’s a former sheriff’s deputy who had tussled when Bank of America had tried for foreclose on his Florida home. There was only one small problem, Nyerges had paid cash for the home and owned it outright.

After two months of harassment, Nyerges was dragged into court by BoA. When the judged heard about his ordeal, he ordered BoA to pay him $2,500.

After five months the bank hadn’t paid, so Nyerges turned the tables on the bank. One morning deputies entered the building and gave a familiar spiel, pay the money you owe or prepare to lose your possessions, according to the Naples Daily News. There was a delicious irony, the person who was being ordered to pay up or lose the furniture was the bank’s branch manager.

I told you this was good stuff.

This was all witnessed by local media, Nyerges attorney, deputies, a moving company and the court’s permission to seize bank assets. Todd Allen, Nyerges’ attorney summed it all up, “I’m either leaving the building with a whole bunch of furniture or a check.”

Don’t get me wrong, this shouldn’t have been a surprise to BoA. Nyerges had talked to company officials and had even sent a certified letter to the President of the Bank. All to no avail.

You probably won’t be surprised to learn that the Florida State Attorney General’s Office opened an inquiry into the bank’s foreclosure practices. But here is the icing on the cake, the bank blamed its local counsel that it had hired.

For his panache and cojones, I salute Warren Nyerges. Not only did he get BoA off his back, but he let them feel what it was like to be on the other side of such reprehensible behavior. If only they’d been able to realize it, something good could have actually come out of this for the community at large.

But Nyerges isn’t done yet. He wants the bank to pay his attorney’s fees. He said he’d be back with the moving truck. Stay tuned…

About the Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via bob@workplace911.com.

Wall Street Bonuses For Haiti

Thursday, January 14th, 2010

The president is going to announce today a tax on the big banks and financial institutions:

The tax on banks, insurance companies and brokerages with more than $50 billion in assets would start after June 30 and seek to collect $90 billion over 10 years, according to a senior administration official who briefed reporters late Wednesday.

The Administration is calling the tax a “financial crisis responsibility fee”. I like that handle. But, there are two problems. First, the bankers themselves still don’t get it:

“Using tax policy to punish people is a bad idea,” J.P. Morgan Chase Chief Executive James Dimon told reporters after a hearing in Washington. Mr. Dimon said it would be unfair for banks to be left shouldering the cost of the auto bailout.

This isn’t punishment, Mr. Dimon. This is about responsibility. To your country. To the people whose hard-earned money you used to save your institution.

Second, frankly, the projected $90 billion to be collected over ten years is a pittance–and that cost is being shouldered by the shareholders of the banks and financial institutions and I’m guessing its customers who will end up paying for the tax in higher fees that the institutions slip into their “cost of doing business”.

The tax avoids any personal responsibility on the part of the individuals who created the economic crisis.

Here is another idea: demand that the Wall Street bonuses go to pay for the recovery efforts in Haiti, and to make taxpayers here whole. After all, the very economic system that Dimon and his peers created over the past several decades is the system that impoverished countries around the world, leaving them with a weak infrastructure to be able to deal with natural disasters. Putting the Wall Street bonuses towards Hait relief will perhaps make Dimon and his peers feel virtuous and not punished–but I would not count on it.

*This post originally appeared in Working Life on January 14, 2010. Reprinted with permission from the author.

About the Author Jonathan Tasini: is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.

When The Revolution Comes, Your 401(k) Will Be First Against The Wall

Wednesday, December 2nd, 2009

Everybody’s favorite vampire squid, Goldman Sachs, has practiced a form of virtual class warfare for a long time now.

But Bloomberg reports today that top execs there are now arming themselves for the real thing:

“I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.

I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names…

Talk of Goldman and guns plays right into the way Wall-Streeters like to think of themselves. Even those who were bailed out believe they are tough, macho Clint Eastwoods of the financial frontier, protecting the fistful of dollars in one hand with the Glock in the other. The last thing they want is to be so reasonably paid that the peasants have no interest in lynching them.

I’m not sure what kind of Mad Max future these people are envisioning, exactly. But it is kind of funny to imagine an investment banking nerd thinking that dropping $500 on a Glock 19 will turn him into the Road Warrior.

UPDATE (4:00PM): More reactions…

SEIU:

They just don’t get it. The thousands of people that showed up outside their door in Chicago and DC aren’t part of some violent mob; we’re taxpayers who’ve been taken for a ride by Wall Street and want to get off at the next stop. Our message has been clear and simple every time: stop using our money on lobbying and bonuses.

LOLFed:

Goldman employees…think about this for a moment. You work for one of the nation’s most hated institutions. You’re pretty unpopular already. But one of the few things Goldman has not yet been accused of is actually killing someone. Do you really want to be the one to break that long and storied tradition of not killing someone? That’s a guaranteed way to get your bonus chopped down to five figures, mister.

*This post originally appeared in Change to Win on December 1, 2009. Reprinted with permission from the author.

About the Author Jason Lefkowitz: is the Online Campaigns Organizer for Change to Win, a partnership of seven unions and six million workers united together to restore the American Dream for everybody. He built his first Web site in 1995 and has been building online communities professionally since 1998. To read more of his work, visit the Change to Win blog, CtW Connect, at http://www.changetowin.org/connect.

Bad Distribution of Income Led to Great Depression: History Repeats in 2008

Wednesday, June 24th, 2009

John Kenneth Galbraith wrote The Great Crash 1929, an economic history focused in part on the men of the market who brought on the crash, in graceful and snarky prose. In his last chapter, he tells us of five major weaknesses in the real economy that made it possible for the disaster to destroy a generation. At the top of his list is the badly unequal distribution of wealth.

He points out that the top 5% of the population earned about one third of all personal income in 1929. Those figures comport well with the figures from Emanuel Saez and Thomas Piketty, whose IRS data indicates that the top 5% earned about 37% of gross income in 1929. P. 194 (references are to the Penguin Books 1992 ed.). For a discussion of the 2006 figures, see this NYT article.

Productivity increased steadily from 1920 to 1929, but wages and prices were stagnant. P. 192 Costs fell, and profits increased, but how were the wealthy to dispose of the money? The choices were consumption of luxuries or capital investment. There is only so much even the rich can consume. If anything happened to reduce the flow of money to capital expenditures, consumer spending could not increase to take its place, and the economy was headed down. In the event, it looks like a huge part of it went to speculation. There is insufficient evidence, according to Galbraith, to be certain that this was the central cause, and bless him for his warning about theorizing with incomplete data, but he thinks the explanation is consistent with the observed facts available to him in 1954.

He identifies four other factors.

1. Bad corporate structures. Although the business press praised the businessmen of that day, the fact (P. 195.) was that

American enterprise in the twenties had opened its hospitable arms to an exceptional number of promoters, grafters, swindlers, impostors, and frauds. This, in the long history of such activities, was a kind of flood tide of corporate larceny.

2. Bad banking structure. Galbraith doesn’t think bankers were any worse or better in the 20s than the 50s, but the structure of banks made runs on banks easier and more likely.

3. The balance of trade. The US was a creditor to most of the world. As the decade wore on, that status increased every year. High US tariffs made it difficult for other nations to balance their imports from the US with exports to the US, so accounts were settled in transfers of gold, or in shaky and crooked loans, like the loans made by National City Bank (predecessor, somehow, of CitiGroup) to Peru. P. 198-9. As this became more difficult, other countries had to reduce imports from the US, which caused strains in sectors of the economy, particularly agriculture.

4. Incompetent economic advice. From p. 200:

The economic advisors of the day had both the unanimity and authority to force the leaders of both political parties to disavow all the available steps to check deflation and depression.

Two and three seem unlikely culprits this time. It looks to me like a good case can be made for one, with all the money lost by the great geniuses of Wall Street and their counterparts in the banking and other businesses. What kind of country did our corporate masters think would be left when they exported all the decent jobs to other nations? Actually, it doesn’t affect them a bit. They just whine that they are being put upon by the great unwashed, and have to pretend they aren’t really all that different from you and me. When Newsweek notices it, it must be real.

As to four, judging competence isn’t easy. What do you think about the economic crowd? If you liked them under Bush, you’ll love them in their new form under Obama, including their supporters in the money party, the Blue Dogs and the rump of the Republican party. John Kenneth Galbraith would recognize these people too.

About the Author: Masaccio has a law degree from Indiana University and is a graduate of the University of Notre Dame. He began his career as a corporate and securities lawyer. He then worked in consumer protection and securities law for several years before becoming the securities commissioner of his home state. He has practiced business and bankruptcy law for the past 25 years. Beginning with an expensive and slightly frightening experience with Small Martingale as a young man, he has had an opportunity to see, investigate, sue and prosecute a wide variety of fraud cases, including check-kiting, critter contracts, churning, insider trading, Ponzi schemes, and stock market manipulation. This background is helpful in his work for FDL, which focuses on explaining the financial industry of today.

This article originally appeared in Firedoglake on June 21, 2009. Re-printed with permission by the author.

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