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Wells Fargo Hit With ‘Unprecedented’ Punishment Over Fake Accounts

An nameless reader quotes CNN:
The Federal Reserve has dropped the hammer on Wells Fargo, [handing] down unprecedented punishment late Friday for what it called the bank’s “widespread consumer abuses,” together with its infamous advent of tens of millions of pretend buyer accounts. Wells Fargo would possibly not be allowed to get any larger than it was once on the finish of remaining yr — $2 trillion in belongings — till the Fed is happy that it has wiped clean up its act. Under force from the Fed, the financial institution agreed to take away 3 other people from the board of administrators by way of April and a fourth by way of the tip of the yr. It is the primary time the Federal Reserve has imposed a cap on all the belongings of a monetary establishment, consistent with a Fed professional. “We cannot tolerate pervasive and persistent misconduct at any bank,” outgoing Fed Chairwoman Janet Yellen mentioned in a observation. Friday was once her remaining day at the process….

Wells Fargo admitted that its staff spoke back to wildly unrealistic gross sales objectives by creating as many as 3.5 million fake accounts. The financial institution has additionally mentioned it forced up to 570,000 customers into unneeded auto insurance… About 20,000 of the ones consumers had their vehicles wrongfully repossessed partially because of those undesirable insurance coverage fees. In August, Wells Fargo was once sued by way of small industry house owners who say the financial institution used deceptive language to dupe mom-and-pop businesses into paying “massive early termination fees.” The corporate was once within the headlines once more in October for charging about 110,000 mortgage borrowers undue fees.
One U.S. congressman argued that the tough penalty “demonstrates that we have the tools to rein in Wall Street — if our regulators have the guts to use them.”

Wells Fargo has additionally spent $three.three billion on felony expenses in simply the remaining 3 months of 2017.

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