Santander employees take union campaign to Washington DC

Members of the Committee for Better Banks traveled to Washington DC to share with members of Congress a new report on the predatory lending practices by Santander Consumer USA, the largest subprime auto loan lender in the US.

Committee for Better Banks is an organization of bank workers and consumer advocates affiliated with the Communication Workers of America. Members of the committee are working to unionize the banking industry, like it is in Europe and South America, and to improve banking practices in the US.

One of the banks where employees are trying to organize a union is Santander and its consumer loan division Santander Consumer USA.

Life for bank workers like these can be precarious.

Their pay is low and much of it is based on commissions they receive from selling banking services and products that customers often don’t need and often can’t afford.

“We had to make a decision every day about meeting our need to have a job and an income or speaking  up about practices that Santander has in place that negatively impact our customers,” said former Santander employee Jerry Robinson on the committee’s Facebook page.

The new report that committee members shared with members of Congress such as senators Elizabeth Warren and Sherrod Brown describes some of the practices referred to by Robinson.

According to the report, Santander’s pay and incentive system pressures its call center collection employees “to use aggressive collection tactics” taught them by Santander to convince customers to agree to changes to their loans without explaining the high cost of the changes.

Santander Consumer controls more than one-third of the subprime auto loans in the USA.

These are high interest loans made to auto customers with low credit ratings.

About 31 percent of all outstanding auto loans are subprime loans.

It’s not unusual for subprime customers to miss or fall behind on loan payments.

In 2015, 16.7 percent of Santander’s auto loans were delinquent.

When customers do fall behind, they call or are contacted by Santander collection employees working in call centers.

In some cases, customers falling behind on their loans are encouraged to refinance or extend their loans.

Doing so may reduce monthly payments but the fees and extra interest rates that result can substantially increase the cost of the loan.

Santander’s practices have recently drawn the interest of state attorneys general who are cracking down on predatory lending practices.

Santander in March paid $25.9 million to settle predatory lending suits filed by the attorneys general of Delaware and Massachusetts.

Massachusetts’ Attorney General Maura Healey told Bloomberg Markets that in one of the cases cited in her suit, a Massachusetts car buyer ended up owing $10,000 on a $750 vehicle loan.

When members of the Committee for Better Banks met with members of Congress, they told them that having a union at Santander would give the workers the collective power they need to oppose such predatory practices.

Having a union would also give them a chance to have a reliable and steady income.

Currently, if workers don’t meet their sales quotas, they could end up making the minimum wage or near it.

Most people think that working for a bank like Santander is a good middle class job, but many of these workers struggle to make ends meet.

According to a report by the Committee for Better Banks, “bank worker wages are so low that almost one-third of bank tellers receive some sort of public assistance nationwide.”

But it doesn’t have to be this way.

In Spain where bank employees including those for Santander are union members, the average bank employee’s salary is $15,000 higher than the national average wage.

After meeting with members of the Committee for Better Banks, Sen. Brown issued a statement about the report presented to him by Santander workers.

“The behavior outlined in this report is troubling and, if true, shows that predatory practices boost profits for banks and their executives while hurting customers and workers,” said Sen. Brown, the ranking Democrat on the Senate’s banking committee. “It’s critical (that) workers are empowered to speak out if their company is harming them or its customers, and I urge Santander to respect the rights of these workers to elect union representation that will give them those protections.”

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Santander Bank employees demand right to join a union

Santander Bank employees on February 21 rallied in Boston and Dallas for the right to join a union.

Santander Bank is an international banking corporation headquartered in Spain. In the US, its bank branches are located mainly in the Northeast. It also owns a subprime consumer loan company called Santander Consumer USA that operates out of Dallas.

In 2016, Santander Bank’s holding company reported profits of $5.9 billion.

Santander bank employees were joined at the rally by consumer rights advocates. They all belong to the Committee for Better Banks (CBB), a coalition of bank employees and consumer advocates working together to improve conditions in the banking industry for both employees and customers. CBB is affiliated with the Communication Workers of America.

At the February 21 rallies, bank employees and consumer advocates, delivered letter to Santander executives demanding that they respect their employees right join a union.

One of the reasons that bank employees say they need a union is that banks like Santander often pit the interests of employees against the interest of customers.

“Our neighbors and communities trust us to help them–whether it’s with a loan or saving for their kid’s college tuition–but Santander executives choose to put us in an impossible position between providing for our families and doing what’s best for our customers,” said Peggy Spencer, a Santander Consumer worker in Dallas. ” Today, we’re taking our first major step to winning a voice on the job, improving working conditions, and putting an end to discriminatory, deceptive practices that are holding back thousands of families.”

Like other large banks, Santander has been accused of predatory practices that hurt customers.

In July, Santander paid a $10 million fine after the US Consumer Financial Protection Bureau (CFPB) charged it with deceptive trade practices. According to CFPB, Santander customers were given false information about the high cost of the bank’s overdraft protection service. In some cases, customers were enrolled in overdraft protection without their consent.

In 2015, Santander Consumer paid $9.5 million to settle a US Justice Department suit. The suit charged Santander with violating the Service Members Civil Relief Act, which protects service members on active duty from unlawful repossession of their vehicles.

According to the Justice Department, its “lawsuit alleges that Santander initiated and completed 760 repossessions, without court orders, of motor vehicles owned by . . . protected service members.  . . .  By failing to obtain court orders before repossessing motor vehicles owned by protected service members, Santander prevented service members from obtaining a court’s review of whether their repossessions should be delayed or adjusted in light of their military service.”

The settlement requires Santander to pay each service member affected $5000 and help them repair their credit rating.

More recently, a report by CBB finds that Santander’s lending practices are discriminatory.

An “analysis of the bank’s Home Mortgage Lending Act data reported each year to federal regulators reveals a disturbing pattern of racial and economic discrimination in Santander’s home mortgage lending,” reads the report entitled “Denied: An Assessment of Racial and Economic Disparities in Santander Bank’s Mortgage Lending.”

“In 2014, Santander denied more than 26 percent of borrowers of color a mortgage loan, compared to an aggregate 17 percent denial rate by other banks in the same (market areas),” continues the report.

In addition to wanting to help end Santander’s customer service problems, the bank’s employees have their own collective grievances, which are shared by employees of other large banks.

The median average pay for bank tellers is a little more than $26,400 a year. Pay among tellers is so low, reports CBB, that one-third of tellers nationwide qualify for some sort of public assistance, such as food stamps or Medicaid.

Higher level employees have their own salary-related grievances. Their salaries are often determined by whether they meet unrealistically high sales quotas, putting pressure on them to sell unwanted and sometimes expensive services to their customers.

To address these grievances, bank workers need a union, say union supporters, and they want Santander to extend to them the same rights that Santander employees in other countries enjoy.

Santander operates throughout Europe and South America, and 150,000 of the bank’s employees on these two continents are union members.

“In Brazil, workers are partnering with management to promote customer service and ethical sales and to prevent predatory practices that force workers to push unnecessary products on their customers,” reads a statement by CBB. “In Europe, Santander jobs are stable, middle-class jobs that allow workers to care for their families.”

Santander employees in the US want the same things.

Report: Bank’s hard sell hurts customers and employees

Members of Committee for Better Banks met with US lawmakers on June 10 to brief them on a new report that criticizes big banks for using an overly aggressive quota system that forces bank employees to pressure customers into accepting unneeded banking products that include high fees, one of the biggest sources of bank revenue.

The report entitled “Banking on the Hard Sell” was published by the National Employment Law Project (NELP)and commissioned by the Committee for Better Banks, an organization of frontline bank employees and consumer advocates that was started by the Communication Workers of America (CWA).

“Eight years after the financial crash, Wall Street CEOs and shareholders are filling their personal bank accounts with earnings from immoral and exploitive bank sales quota systems,” said Anastasia Christman, deputy program director at NELP and author of the report. “Big banks are using frontline workers to pull the wool over ordinary consumers’ eyes. Americans trust bank tellers, but these individuals face the impossible choice of pushing high interest credit cards and other predatory ‘products’ just to keep their jobs.”

Christman analyzed industry data, reviewed class action lawsuits, and interviewed dozens of frontline bank employees including tellers, customer service representatives, personal bankers, and others.

Those she interviewed told her that bank employees work under heavy pressure to meet their sales quotas, which determine how much commission they’re paid.

Commissions are an important piece of employee compensation because base pay is so low.

According to the report, the median average wage of bank tellers is $12.44 an hour.

Employees interviewed for the report said that sales quotas are often unobtainable, set arbitrarily, and increased without notice or explanation.

Employees also said that they were constantly hounded to by management to pressure customers to sign up for bank products like credit cards, consumer loans, and overdraft protection that come with fees and high interests rates.

Wells Fargo, one of the banks identified in the report for its predatory practices, encourages its frontline workers to sell its fee-bearing banking products as “solutions” to customers facing financial problems.

According to the report, fees have become a major source of bank revenue. For Wells Fargo, fees and service charges generate one-quarter of the bank’s revenue.

At Wells Fargo, the average household with an account at the bank has been enrolled in more that six banking products. Corporate leadership wants to push this number up to eight, and they want these extra banking products to be those that generate fees.

In establishing sales quotas, bank management exclude the basic products that most customers want from a bank, low-fee accounts, ATM cards, etc. and instead make their fee-bearing products the quotas major component.

Pressure to load up customers with fee-bearing services has put employees in a bind. Failure to sell “solutions” to customers means lower commissions and more pressure from upper management.

This kind of pressure has caused some bank employees to take shortcuts that harm customers.

The Los Angeles Times reports that Wells Fargo employees “facing strict quotas and fearing for their jobs, sometimes opened unneeded accounts for customers, forged clients’ signatures, and pleaded with family members to open accounts.”

The Los Angeles City Attorney in 2015 sued Wells Fargo after the Los Angeles Times exposed the bank’s questionable practices. The suit says that the bank’s sales goals had encouraged “unfair, unlawful and fraudulent conduct.”

While some bank employees may have cut corners to meet goals, the overwhelming majority do not.

Those who belong to Committee for Better Banks are taking it one step further by fighting to end the banks predatory practices–both those that affect employees and those that affect customers.

“When I came to the United States as a refugee, I was excited to find what I thought was a good job at a major bank, but the pressures we face keep me up at night,” said Khalid Taha, a Wells Fargo personal banker and a member of the Committee for Better Banks who briefed lawmakers on June 10. “If Wells Fargo is serious about serving customers, then it should listen to us — the professional customer service representatives on the frontlines. I want to help customers without worrying that I’ll lose my job if I don’t sell an insane amount of credit cards and loans.”