Banking, finance, and taxes
Well Fargo Renews Its Commitment to You After Rip-Offs (Update)
Published:
Last Updated:
Update: On June 26, CNNMoney reported:
Wells Fargo is once again being accused of misconduct, this time because it allegedly used complex financial investments to take advantage of mom-and-pop investors.
The Securities and Exchange Commission said on Monday that between 2009 and 2013, Wells Fargo (WFC) reaped large fees by “improperly encouraging” brokerage clients to actively trade high-fee debt products that were intended to be held to maturity.
Update: According to The Wall Street Journal:
Some employees in a Wells Fargo & Co. unit that handles business banking improperly altered information on documents related to corporate customers, according to people familiar with the matter.
The behavior again raises questions about Wells Fargo’s risk-management practices and controls. The bank has been sanctioned in recent months by federal regulators for problems in these areas and as a result can’t grow its balance sheet.
Wells Fargo & Co. (NYSE: WFC), plagued by a long list of banking rule violations and hundreds of millions of dollars in government penalties, has launched a new marketing campaign:
Established in 1852. Re-established in 2018 with a recommitment to you.
Based on its behavior over the past year, the bank had very little commitment to more than itself. No one will be fooled.
Among the things the bank promises as part of its new commitment:
- Building a better bank
- Putting service first
- Upgrading its banking features
- Increasing community impact
The list implies Wells Fargo was not a good bank and did not put service first. There is plenty of evidence these things are true. A brief history:
On September 18, 2016, from The Wall Street Journal:
Wells Fargo & Co. was slapped with a $185 million fine Thursday for “widespread illegal” sales practices that included opening as many as two million deposit and credit-card accounts without customers’ knowledge, federal and local authorities said.
Employees at the bank, which has 40 million retail customers, in some instances issued debit cards without customers’ knowledge and assigned personal identification numbers without telling them, according to the U.S. Consumer Financial Protection Bureau. They also transferred funds from authorized customer accounts to temporarily fund ones without customer permission, according to the allegations, sometimes resulting in fees for insufficient funds.
On October 31, 2016, from Reuters:
Wells Fargo & Co has agreed to pay $50 million to settle a racketeering lawsuit accusing it of overcharging hundreds of thousands of homeowners for appraisals ordered after they defaulted on their mortgage loans.
The proposed settlement, which requires court approval, was disclosed in a filing on Friday in an Oakland, California federal court. If approved, it will resolve nationwide claims that Wells Fargo charged much more than it paid for third-party appraisals, exploiting borrowers who could least afford it and driving them further into default.
On March 28, 2017, from CNNMoney:
A top federal banking regulator severely downgraded Wells Fargo’s community lending rating on Tuesday, citing the “egregious nature” of “discriminatory and illegal” credit practices at the big bank.
The Office of the Comptroller of the Currency issued Wells Fargo a rare “needs to improve” rating, marking the first time the lender has had anything but an “outstanding” label since Community Reinvestment Act results were first publicly disclosed in 1994.
On July 17, 2017, according to the Motley Fool:
Wells Fargo discloses that a separate internal investigation uncovered 570,000 customers with car loans form the bank who may have been inappropriately charged for failing to maintain qualifying insurance on their cars. “For approximately 20,000 customers, the additional costs of the insurance could have contributed to a default that resulted in the repossession of their vehicle,” says the bank.
24/7 Wall St.More recently, from The Washington Post on April 13, 2018:
Wells Fargo said Friday that it faces a potential $1 billion in fines to resolve government investigations into the megabank’s behavior in the auto and mortgage markets.
The bank has acknowledged that it charged thousands of customers for auto insurance they didn’t need, driving some to default on their loans and lose their cars through repossession. The bank has also said it will refund customers who were charged improper fees to lock in an interest rate for a Wells Fargo mortgage.
Both matters have been under investigation for months by two federal regulators, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. Those regulators are offering to resolve the matter for a combined $1 billion, the bank said. Such a large civil penalty would be the latest hit to Wells Fargo’s effort to rebuild its image after more than a year of scandal.
And this is only a partial list. Now, Wells Fargo is renewing its commitment to you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
