The Federal Reserve cracks down on Wells Fargo over scandal involving sham accounts

[BumRushDaShow]

Source: Washington Post

The Federal Reserve levied an unprecedented penalty against Wells Fargo on Friday, ordering the mega bank to oust four of its board members and not grow any bigger until it corrects governance problems that led it to widespread consumer abuses.

“We cannot tolerate pervasive and persistent misconduct at any bank and the consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again,” Chair Janet L. Yellen said in a statement.

Wells Fargo said that as part of its consent decree with the Federal Reserve it would submit a plan detailing how it would enhance its governance oversight within 60 days. “We take this order seriously and are focused on addressing all of the Federal Reserve’s concerns,” Timothy J. Sloan, Wells Fargo’s president and chief executive officer, said in a statement.

The bank’s problems stem from its admission in 2016 that it had opened millions of sham accounts that customers didn’t ask for. Some customers were wrongly charged with overdraft and other fees that harmed their credit scores. The bank faced an immediate backlash on Capitol Hill, forcing longtime chief executive John Stumpf to resign and some senior executives to give up millions of dollars in bonuses.

Read more: https://www.washingtonpost.com/news/business/wp/2018/02/02/federal-reserve-orders-wells-fargo-to-halt-growth-oust-four-board-members-after/?utm_term=.d783c0d0e278&wpisrc=al_news__alert-economy--alert-national&wpmk=1

[bucolic_frolic]

1. That's how you make Mexico pay for that wall

WF was smug in the recession, as I recall. As they took over Wachovia, best bank deals in town, both strategies to grow their customer base.

Guess they had a plan to get paid for their efforts!

[BumRushDaShow]

2. Actually

Citigroup wanted to take over Wachovia and Warren Buffet helped Wells Fargo swoop in and grab it instead. The result was that Wells Fargo had to pay Citi $100,000,000 in claims due to that convoluted maneuver.

It was only a matter of time before the chickens came home to roost!

[bucolic_frolic]

3. Ah! The plot was thicker than I thought

next thing you know they'll be releasing the memos

[BumRushDaShow]

4. Yeah I had to follow closely

because Wachovia had been my bank at the time.

[elleng]

5. and even tho wachovia (neighbor called it Walk All Over You)

was MY bank, I didn't follow this stuff, TRIED to follow the crap they (and then wells) threw at me. It's all over now, fortunately.

[BumRushDaShow]

9. Well for me

Wells had become the 5th bank - I.e., it took over the bank that had merged with the bank that had bought the bank that absorbed my original bank that I had an account with 30+ years ago. That was enough! Credit Union time.

[bitterross]

6. Still, no one is going to jail.

Executives have to start going to jail before this sort of thing stops. Right now, I bet the next crash is in the making because no one had to go to jail over the last one.

[dixiegrrrrl]

7. Dow is showing us something....that's for sure. n/t

[SergeStorms]

8. And there's been little....

or no regulation put in place to prevent them from doing the exact same thing again. Even if there were regulations, Trump would have deep-sixed them with a "presidential signing order". There's just too much regulation in place to keep corporations from stealing everyone's money.

[llmart]

10. Exactly!

They got a "finger wagging" and "don't you do that again" while the rest of us peons would have been put in jail for something a whole lot less.

I could never understand how, when buying a house you initially are working to get a mortgage through a smaller bank and then immediately the loan is sold to Wells Fargo or some other too big to fail entity.

I paid off the rest of my mortgage last year because I didn't want to make WF get any more money of mine than they were entitled to. Even when the interest rates are historically low, they still get a bundle from the average person.

[Bayard]

11. Wells Fargo illegally foreclosed on my farm in Calif.

Because they were also processing a refy of the mortgage at the same time. They got caught doing the same thing to a lot of other people in a class action suit. Know what I got for losing my farm in that settlement? $500.