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Bank of America can’t catch a break. A whistleblower, Eileen Foster, brought fraud at Countrywide Financial Corp. to the attention of Countrywide’s Employee Relations Department shortly after Bank of America acquired the company. Bank of America then allegedly fired the whistleblower in retaliation, although the bank claims the termination was due to the employee’s management style, not the fact she led an investigation that uncovered fraud.

The U.S. Department of Labor says Bank of America must reinstate the employee and pay her $930,000 for lost income, interest, damages, and attorney fees.

Countrywide specialized in subprime loans, and the employee’s investigation uncovered wire, mail and bank fraud at the company, as a matter in the course of doing business. Countrywide used predatory lending tactics and falsified loan documents.

As a result of the investigation, six branches of Countrywide in Boston closed. After the closings, Countrywide agreed to pay $3.1 million to Massachusetts and $3 billion in loan modifications. According to the Department of Labor, also as a result of the investigation, Bank of America retaliated by firing Foster.

From the Wall Street Journal:

Countrywide then initiated an investigation into allegations of harassment and misconduct by Foster, the report says. The report says Foster wasn’t initially informed of the investigation but several employees were interviewed for it. One employee who was interviewed went to the general counsel and the chief operating officer of Bank of America to express concern Foster was unfairly targeted, the report says.

An employee told the Department of Labor the investigators asked “leading questions and had a profoundly biased view” of Foster.

Foster was fired in September 2008. An executive said she engaged in “inappropriate and unprofessional conduct with your staff and displaying poor judgment as a leader,” according to an email cited in the government’s report.

Bank of America will repeal the Department of Labor’s decision.

Despite protections for whistleblowers, many who believe they witness unethical activities in an organization may not raise the issue to the appropriate authorities. The culture of an organization plays a larger role in decisions to go against co-workers and superiors than documented protections. Even though retaliation is not permitted, the fear is great enough to keep most people silent. Particularly when the unemployment rate is high, employees are willing to stay silent and keep their jobs. The Department of Labor is charged with ensuring that employees are not afraid to speak out when there is evidence of wrongdoing.

In addition to this issue for employees, consumers should also pay attention. While Countrywide Financial (Bank of America Home Loans) is not the same entity that provides savings accounts and credit cards within Bank of America, it is part of the larger organization. Interest rates and customer service tend to be the biggest drivers for the choice of banks, but the attitude of the larger corporation can legitimately play a role in these decisions, as well.

While Bank of America may not be continuing any possible retaliation, they are appealing the decisions. Of course, this is the only possible course of action because in the end, the company must answer to its shareholders who expect the company to avoid any unnecessary expenses if possible. When shareholders’ priorities are different than customers’ priorities, it may be time to consider alternatives, like credit unions and mutual insurance companies.

Wall Street Journal

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It always pays to shop around. If more mortgage customers didn’t choose to borrow from the trusted institution that held their savings and checking accounts without question, it seems that these customers could have found lower interest rates, particularly if these borrowers were customers of Wells Fargo. The Federal Reserve is alleging that between 2004 and 2008, Wells Fargo sold mortgages with higher interest rates to customers who should have qualified for lower interest rates and changed information on documents, such as income, to make it appear as if these customers didn’t qualify for better rates.

As a result, the Fed is slapping Wells Fargo on the wrist with an $85 million fine and a directive to compensate up to 10,000 affected customers who may receive as much as $20,000 in restitution.

The Fed says that the Wells Fargo Financial subsidiary encouraged its employees’ unethical practices by having sales quotas. The bank doesn’t need to admit they did anything wrong, but in their marketing message, Wells Fargo says the actions of a select number of employees shouldn’t reflect poorly on the company as a whole. The $85 million amounts to just over 2% of Wells Fargo’s second quarter profit, and the bank had already set money aside to compensate the affected customers. A fine of 2% of a company’s quarterly profit is hardly a penalty.

While a financial institution should not lie about your finances to trap you into an expensive loan, potential borrowers should take a few steps to prevent themselves from a bank that might take advantage of them.

  • Know your credit. Get a free credit score, free credit reports from AnnualCreditReport.org, and analyze your credit report. There should be no surprises when you apply for a mortgage, and with this knowledge, you should be able to tell if a mortgage broker is lying to you about your score or your credit history.
  • Shop around. Yes, it’s difficult to find the right mortgage. It’s easy to be tempted into walking into the bank where you do business and ask to speak to their mortgage consultant. You should do this, but your shopping shouldn’t stop here. Find other local banks, community banks, and credit unions. Look online.
  • Know the market. Be aware of the best mortgage interest rates. While companies often advertise their absolute best rates that only those with perfect credit will receive, this should give you an idea of the rates you should expect and prevent you from accepting a deal where the rate is unreasonable.

The conversation usually turns to determining who is to blame: the uninformed customers who end up paying more than they need to, the bank’s representatives who are viewed as trusted experts rather than salespeople trying to meet quotas, or the bank’s management that sets the policy and the environment. Everyone shares some blame, but as a customer, one can’t control anything other than your own actions and reactions to other people. Put yourself in the best situation as possible by understanding your own financial situation and recognizing that when you deal with any company, they are trying to sell you something and not always looking out for your best interest.

Wells Fargo is the bank where, through a series of acquisitions and mergers, I’ve been keeping most of my non-online deposits and active checking accounts for my entire adult life, but if I thought I had been misled I would have no problem moving my accounts elsewhere. I do not have a mortgage or any type of loan from Wells Fargo.

CNN Money

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Earning or having more money might not universally increase happiness or health. Wealthy people can be sad or sick just like those who are less financially fortunate. More money does provide more access to “stuff,” though, and people often like that “stuff.” Businesses that cater to the rich with services for which they might be willing to pay extra often thrive. In economic downturns, rich consumers often stay rich and save more of their money, but they’ll likely return to their luxury items.

One of these services is medicine. Concierge doctors, doctor to whom you can pay a retainer to ensure personal attention at any time, have increased in number over the past few years. Not all of the popularity increase can be attributed to the entertaining television program Royal Pains, in which a doctor whose career abruptly ends due to his positive ethics that conflicted with the medical establishment moves to the Hamptons to seek out a wealthy clientele while also treating the residential underclass for free. More doctors are turning to this style of business because medical school was expensive, they have bills to pay, general practice doesn’t provide great salaries, and the thought of higher income beckons.

This doesn’t necessarily mean that the wealthier one is, the greater the quality of medical care one might receive. Doctors are ethically bound to treat everyone to the best of their ability, regardless of financial situation. Paying for membership to a private doctor might increase availability for appointments but won’t increase the quality of your medicine or advice. It can, however, provide the feeling that one is well cared for and reduce the anticipation of stress during a hypothetical emergency. If one has little faith in the healthcare system — a system that works well for the most part — concierge medicine provides an alternative option if you have $1,500 to $25,000 to spend per month (according to the New York Times).

Even if the only benefits were easier access and less stress, is it fair that only those who can afford sizable monthly fees can take advantage of these services? The medical industry will continue to mutate as market forces pull it one way or another. The concept of the health maintenance organization (HMO) began around one hundred years ago when society faced the same question: how to bring quality medical care to more people. While the HMO may now be a symbol for bureaucracy and inefficiency, the system has helped keep society healthier. If traditional medicine eventually falls by the wayside in favor of more lucrative business plans, the system will continue to change to accommodate the needs of the many.

Do you think concierge medicine will help or hurt the medical industry? Is it a problem that a certain selection of medical professionals want to cater only to the rich?

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Democracy, Incorporated

This article was written by in Society. 27 comments.

The following is at least as much opinion as fact, but if I say something that isn’t factual, please tell me.

Our American version of democracy has never been pure or particularly representative. From women’s suffrage to civil rights to lobbyist influence to rumors that can spread around the world before truth gets up off the couch, something has always gotten in between a citizen’s wishes and her elected leaders.

I had thought things were moving in a positive direction with the proliferation of the Internet. It’s never been easier to encounter dissenting opinions or do your own research. I’ve been having some healthy (and some insipid) debates through Facebook for the last couple of years, the kind that would’ve otherwise happened only with friends or co-workers. I like having those. It’s incredibly important to be available to hear other points of view. Not to mention the continued release of government data available for analysis by anyone. Together, we can help each other get to the truth.

A giant step backward

Yesterday, our Supreme Court ruled that since money is considered a kind of free speech, and because corporations are considered a kind of people, (I’m not sure I agree with either of those assumptions), then corporations are free to spend as much as they want to promote or condemn a particular political candidate.

The problem, from my point of view, is that corporations only ever have one priority: increase profits. And especially in America, they want to increase profits in as short a time-frame as possible. We don’t take a long view in this country, as they tend to do in Europe and Asia. That’s why, for example, the electric car took an extra few decades to go into production, and why we’re still dumping toxic chemicals into otherwise useful water. We avoid doing the right thing, because that would be expensive, and shareholders would not be pleased.

You and I, as individuals, are limited to donating $2,400 to a federal candidate. Corporations can now spend as much as they want. Not in donations, exactly, but in other creative ways.

Two days ago, the Shell Corporation would’ve been unable to produce and distribute a feature-length movie explaining that oil is the obvious and only logical way to fuel your car, and therefore you should vote for Sarah Palin.

Clearly, I made up that example. But I feel confident that if Shell could spend a billion dollars to elect a candidate that would help them realize $4 billion in profit, they would.

Is this a partisan issue?

(For the record: I’m registered Independent, and always have been. I tend to vote Democratic, because Republicans push me away with their talk about abortion, civil rights, lower taxes in the face of enormous deficits, and the general idea that individuals fending for themselves is more American than people coming together to help each other out.)

The Supreme Court didn’t have to make such a large ruling. They specifically asked to review the long-standing precedent while in the middle of a much smaller case. Conservative opinion holds a majority in the Supreme Court at the moment.

In 2008, Barack Obama was able to raise more than John McCain by switching from federally-supplied election funds to private sources. The Obama campaign raised a previously-unheard-of amount through “micro-donations”, such as the $160 I donated over the course of three or four months.

But corporations, because they are almost always motivated only by profit, will want Republicans to win more than they want Democrats to win, because Republicans tend to vote to protect profits more than anything else. And corporations will always have more to spend on candidates than individuals will.

I acknowledge that some corporations, while incapable of having their own ethics, are run by ethically-minded people. Not all of them want to see America continue its dependence on foreign oil, High Fructose Corn Syrup, ammonia-laced beef and unnecessary medical tests.

But really all it comes down to is who is willing to spend the most money in an election. It could be Starbucks, it could be Walmart, it could be Sichuan Tengzhong, that previously-obscure Chinese business that recently bought the Hummer brand.

Wait, foreign-owned corporations?

Yes. There’s no difference, according to the law. Chinese, Saudi, German, Australian, it doesn’t matter. Any corporation operating in the U.S. is equally unrestricted.

What about unions?

Yes, this recent ruling also allows unions and other advocacy groups to spend as much as they want in a given election. But who has more to spend, the American Federation of Teachers, or Microsoft? There’s no contest between unions and corporations.

Is there a silver lining?

One possible silver lining to what the SCOTUS did yesterday is that the already-existing problem of “corporate personhood” will be apparent to more people. I’ve never much liked that precedent. It’s illogical to equate a business with a person. A business is a collection of contracts and bank accounts. It doesn’t have a brain with which to generate opinions, so I don’t think free speech applies to it.

Additionally, before the millions start flowing, the Federal Election Commission will have to come up with updated regulations and enforcement processes. I don’t really know what to expect here, though.

What can be done?

To begin with, I’m throwing my lot in with a group who is pursuing a Constitutional Amendment to clarify that corporations are not people. Frankly, I’m worried for my country that it’s come to that: we have to write down that a business and a person are different things. But in general, once the Supreme Court has spoken, changing the Constitution is the last thing you can try.

Here’s a pretty good video explaining what happened, what it means, and what can be done:

Landmark Supreme Court ruling allows corporate political cash, Reuters, 21 Jan. 2010

Free Speech for People

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Do You Want RFID in Your Mobile Phone?

by Smithee

Håkan Djuphammar, VP of Systems Architecture for Ericsson, made a prediction recently that all new mobile phones sold after Summer 2010 would have two-way RFID chips in them that would allow them to act as a tag or a reader. If what you just read sounds like technobabble, watch this short news excerpt to get ... Continue reading this article…

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Resume Dos and Don’ts (Plus Resume Makeovers)

by Flexo

This is a guest article by Ginger from Girls Just Wanna Have Funds. Ginger teaches women how to break financial ceilings one stiletto at a time! Join the social network, Girls Just Wanna Have Funds on Ning to connect with other financially savvy women. This week I’ve been helping out my company’s HR department by ... Continue reading this article…

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My First Stock Purchase

by Smithee

So, I got this credit card that deposits 2 percent cash back into a brokerage account. I started using it for all my daily purchases, paying off the statement balance each month. At the end of January, my points on the card were redeemed for the first time, and a few impatient days later, I had ... Continue reading this article…

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Should You Walk Away From a House and Mortgage?

by Flexo

In the real estate boom, many homebuyers extended themselves financially to buy a house that may have been beyond their means. With the exuberant market, people were encouraged to buy with low introductory interest rates and interest-only loans, the belief that their income would increase to meet their payments, predictions that real estate prices would ... Continue reading this article…

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