The Bot­tom Line:

Un­der fed­eral law, banks crack down on em­ploy­ees who were jailed, no mat­ter how mi­nor their mis­take

San Francisco Chronicle Late Edition - - FRONT PAGE - By An­drew S. Ross

Why a crime worth a dime cost a Wells Fargo worker his job.

You’re an em­ployee in good stand­ing with a ma­jor bank, but nearly 50 years af­ter a stupid mis­take you made as a teenager, you sud­denly find your­self out on the street.

So goes the story of Richard Eg­gers, 68, a cus­tomer ser­vice rep­re­sen­ta­tive for Wells Fargo Home Mort­gage, fired last month af­ter seven years of loyal ser­vice, for stuff­ing a fake dime in a Laun­dro­mat wash­ing ma­chine in the year 1963.

The story, which broke this week, is, to put it char­i­ta­bly, an ex­am­ple of the law of un­in­tended con­se­quences. Eg­gers is among thou­sands of em­ploy­ees at fi­nan­cial in­sti­tu­tions throughout the coun­try who have been thrown un­cer­e­mo­ni­ously onto the un­em­ploy­ment rolls. “We’ve had close to 500 calls in the past year,” said Natasha Buchanan, a crim­i­nal de­fense at­tor­ney at Hig­bee & As­so­ci­ates in Santa Ana, which rep­re­sents 24 laid-off bank em­ploy­ees, in­clud­ing five in the Bay Area who used to work for Wells Fargo, Bank of Amer­ica and BofA’s sub­sidiary, Mer­rill Lynch.

The law in ques­tion is con­tained in Sec­tion 19 of the Fed­eral De­posit In­sur­ance Act. Ex­panded and

tight­ened in the wake of the near col­lapse of the fi­nan­cial sys­tem in 2008, the law pro­hibits in­sti­tu­tions backed by the Fed­eral De­posit In­sur­ance Corp. from em­ploy­ing any­one who spent a day or more in jail for a crim­i­nal of­fense.

The law was sup­posed to root out fi­nan­cial and mort­gage fraud­sters, but has fallen pri­mar­ily on lower-level em­ploy­ees like Eg­gers, who got two days in the War­ren County, Iowa, pokey for his card­board dime ca­per.

“It was a stupid stunt and I’m not real proud of it, but to fire some­body for some­thing like this af­ter seven good years of em­ploy­ment is a dirty trick when you come right down to it,” Eg­gers told the Des Moines Reg­is­ter.

Most of the past of­fenses com­mit­ted by Hig­bee & As­so­ci­ates’ clients were of the petty theft, shoplift­ing and drugs va­ri­ety, said Buchanan.

But be­cause of the way the law is writ­ten, and the $1 mil­lion a day fine for non­com­pli­ance it car­ries, the banks say they have lit­tle choice but to obey it to the let­ter.

“As an in­sured de­pos­i­tory in­sti­tu­tion, Wells Fargo is bound by Sec­tion 19 of the Fed­eral De­posit In­sur­ance Act that pro­hibits us from hir­ing or con­tin­u­ing the em­ploy­ment of any per­son who we know has a crim­i­nal record in­volv­ing dis­hon­esty or breach of trust — re­gard­less of when the in­ci­dents oc­curred,” the San Fran­cisco bank said.

“Wells Fargo has been per­form­ing thor­ough back­ground checks on all its team mem­bers — re­gard­less of when they were hired — which in­cludes a fin­ger­print check with the Fed­eral Bureau of In­ves­ti­ga­tion.”

Bank of Amer­ica and Citibank did not re­spond to calls and e-mails on Thurs­day. JPMor­gan Chase de­clined to com­ment.

There is a pos­si­ble way back for fired em­ploy­ees, by means of a writ­ten waiver granted by the FDIC. The agency says it has seen a “sig­nif­i­cant in­crease” in waiver ap­pli­ca­tions since 2009.

“The is­sue with the ex­panded guide­lines is that all the dis­cre­tion is on the back end, in the waiver process, in­stead of the front end, when com­pli­ance per­son­nel are look­ing at the crim­i­nal his­tory of em­ploy­ees,” said an FDIC spokesman.

In Eg­gers’ case, “Wells Fargo con­nected Mr. Eg­gers with a FDIC case man­ager and hope­fully they can pur­sue next steps,” said Ruben Pulido, a bank spokesman in San Fran­cisco.

It would have helped had Eg­gers not spent a day in jail, in which case he could have been granted an au­to­matic waiver for such a mi­nor of­fense. Or, said Buchanan, if Wells Fargo was will­ing to spon­sor his ap­pli­ca­tion, the process could at least be short­ened.

Right now, that ap­pears to be a step too far for Wells Fargo. “It is not the re­spon­si­bil­ity of a fed­er­ally reg­u­lated fi­nan­cial in­sti­tu­tion to in­ter­vene in an in­di­vid­ual’s ap­pli­ca­tion for a waiver,” said Pulido.

In­stead, Eg­gers is re­ly­ing on a Des Moines law firm, which is rep­re­sent­ing three other fired Wells Fargo em­ploy­ees — each with mi­nor con­vic­tions more than 10 years old — to help him nav­i­gate the waiver process.

Buchanan said many af­fected em­ploy­ees are ei­ther un­aware of the waiver, or can’t af­ford to wait a year to find out whether they can get their old job back. “It’s es­pe­cially hard for those who have been with their bank for 10, 20 or 30 years,” she said.

“I’m hav­ing to sign up for So­cial Se­cu­rity be­cause of this, but I didn’t want to. I had hoped to work four more years,” Eg­gers told the Des Moines Reg­is­ter.

“I’d pre­fer to stay busy. I just want my job back.” Join­ing the big leagues? One doesn’t nor­mally as­so­ciate Peet’s Cof­fee & Tea, founded in Berke­ley in 1966, with big-time col­lege sports spon­sor­ships.

But here’s the gourmet bev­er­age chain spon­sor­ing Satur­day’s open­ing day Cal Bears game at the ren­o­vated “new” Memo­rial Sta­dium.

As part of the open­ing, the Bears are sell­ing open­ing day tick­ets for $19.23, the year the orig­i­nal sta­dium opened, and have been run­ning ads “Pre­sented by Peet’s Cof­fee & Tea.”

Could Peet’s, which is on the verge of be­ing bought for $1 bil­lion by a Ger­man con­glom­er­ate (un­less an­other com­pany — Star­bucks? — out­bids it) be join­ing beer dis­pen­saries and ath­letic ap­parel mak­ers in the multigazil­lion-dol­lar col­lege sports spon­sor­ship cir­cus?

“It is a nat­u­ral part­ner­ship based on our Berke­ley roots and our al­ready strong pres­ence on cam­pus,” ex­plained

Deb­bie Kristof­fer­son, Peet’s’ vice pres­i­dent of brand and cre­ative strat­egy.

“Peet’s is proud to part­ner with Cal as they un­veil their new sta­dium, which will be an ex­cit­ing des­ti­na­tion for Bay Area fam­i­lies.”

An­drea Me­len­dez / As­so­ci­ated Press

Richard Eg­gers stands at a Laun­dro­mat in Carlisle, Iowa, where he was ar­rested 49 years ago for putting a card­board cutout of a dime in a laun­dry ma­chine.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.