Since time immemorial, military veterans, especially junior military officers, have been attending top MBA programs and then entering careers in finance- be it the less glamorous more stable careers in retail banking or the high-pressure, high-paying careers in investment banking or sales and trading. However, it was in June of 2011 that five of the top banks:
came together and organized themselves as an organization called “Veterans on Wall Street" (VOWS), which is dedicated to "honoring former military personnel and employees currently in the National Guard and Reserve by facilitating career and business opportunities in the financial services industry." This effort was mainly focused on hiring veterans for the retail banking business for BoA, Citi, and back-office and middle-office functions for GS, CS, and DB. Note that no front-office job was being offered as a top-tier MBA was still a requirement to break into those fields. Conspicuously absent was JP Morgan, which has recently become the King of Wall Street, and Morgan Stanley.
Five months later in November of 2011, JP Morgan Chase (JPMC) led an effort called the “100,000 Jobs Mission" to hire 100,000 veterans by 2020. Founding members of the 100,000 Jobs Mission appear to be mostly non-financial services related:
- Broadridge Financial Solutions, Inc.
- Cisco Systems Inc.
- Cushman & Wakefield Inc.
- EMC Corporation
- Iron Mountain Incorporated
- JPMorgan Chase & Co.
- NCR Corporation
- Universal Health Services
- Verizon Communications Inc.
It is unclear to me why JPMC did not just lump itself together in the VOWS campaign, however, I suspect that it had something related to do with the recently settled military mortgage scandal. Before we go into some of the motives of the campaigns to hire veterans, I want to highlight all the positive things that are happening.
In 2012, GS had its inaugural “Goldman Sachs Veterans Internship Program” which started this April. This is the first internship of its kind as its timeline is not connected to the traditional summer internship. It appears to be the first internship at a financial services company focused on training and eventually hiring veterans. Also, military veterans are now considered part of their “diversity” hiring which traditionally included women, minorities (minus Asians), and LGBT.
Also in 2012, CS initiated its inaugural “Credit Suisse MBA Military Boot Camp,” geared towards prior-military MBA candidates entering a full-time MBA program in Fall 2012.
JP Morgan, not to be confused with JPMC, has had a MBA Early Advantage program in place which has been open to “ is open to Black, Hispanic, Native American, female, LGBT” and recently, if not this year, “military and veteran students.”
Citi and BoA are the only two banks that I know of that offer pre-MBA fellowships, i.e. they guarantee accepted fellows a summer internship as well as payment for tuition or a stipend, before MBA students even start their first MBA class. Both have recently, if not this year, included veterans in their respective programs: Citi Pre-MBA Fellowship, Bank of America Merrill Lynch 2012 MBA Diversity Fellowship Program.
The obvious trend is including veterans in “diversity” recruiting and I have no major qualms about that. Although secretly, I must admit that most veterans would find it slightly distasteful as if veterans couldn’t get the job otherwise. After all, combat experience is earned, and all the other diversity categories one is born into. But hey, I’ll get off my pedestal - this obviously benefits veterans so I’m all for it.
I also want to touch briefly into why these banks are starting these veteran hiring initiatives, is it out of the kindness out of their hearts or is it more for PR reasons? Probably a touch of both, with a heavier weight on the latter.
Beyond the earlier link of JPMC’s recent settlement, JPMC was also involved in violating the Servicemembers Civil Relief Act (SCRA). The SCRA provides numerous protections, but the JPMC incident focused on the 6% clause, “Servicemembers may be able to reduce the interest rate on their pre-service credit cards, car loans, mortgages, installment contracts, interest charged by the IRS, secured debts under a confirmed bankruptcy plan, and other debts or obligations to 6% per year under the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. App. Section 527. However, federally insured guaranteed student loans are not eligible for this rate reduction under the Higher Education Act of 1965, 20 U.S.C.S. Section 1078(d). The SCRA specifically includes debt owed by the Servicemember individually or jointly with a spouse. Debt jointly owed by a Servicemember and individuals other than a spouse has also been eligible for the interest rate reduction. It does not matter which one of you initially incurred the debt.” Read more here. This is probably a good segway into student loans and how they seem to be impenetrable to anything…but we’ll deal with that in a later post.
In March 2011, units of Bank of America and Morgan Stanley have agreed to pay more than $22 million to settle charges that they improperly foreclosed on active-duty members of the U.S. military. The list goes on. Wells Fargo - here. Citi - here.
Obviously bad things have been done, I think you get the point by now. However, to balance out this picture, I do believe that in general, the mortgage departments were just incompetent and understaffed, so it wasn’t veterans who were specifically targeted but rather a lot of mortgages were just handled in an erroneous manner.
So from a historical point of view, one could definitely argue that the mortgage scandals could have been one of the motivators of the banks starting veteran hiring initiatives.
From a employment point of view, this is fantastic. It appears that the retail banking units are targeting enlisted soldiers and the more glamorous positions are still mainly being offered to officers who graduate from a top MBA. Where is Morgan Stanley???????