Been a while since I tuned into the shenanigans at Wells Fargo. A mere 100 million here and another 100 million there just doesn’t break into the headlines. Well this time is 3.7 billion. Yeah, billion with a B.
12/20/22 – Wall Street Journal – Wells Fargo to Pay Record CFPB Fine to Settle Allegations It Harmed Customers – Wells was able to combine a variety of violations into one big settlement. They closed out a number of investigations with this multibillion settlement.
Range of issues includes “illegally assessed” fees and interest on car loans and home loans. Overdraft fees were improperly applied. Some vehicles were repossessed as a result of the shenanigans. Overdraft fees replied even though there is enough money to cover the transactions.
Settlement consists of $2 billion restitution and a $1.7 billion fine from CFPB, which is a record for the agency.
Issues were spread over a decade. Errors in applying car loans were spread over 2011 through 2022. Home mortgage loan modification errors were ongoing from 2011 through 2018.
Head of the CFPB labeled Wells Fargo as a “corporate recidivist.” He also said the settlement is an indication that “should not be read as a sign that Wells Fargo has moved past its long-standing problems.”
With the current settlement covering fiascos that ran through 2022 I think it is fair to conclude the bank has not quite gotten its act together yet.
I have a spreadsheet tracking a range of fiascoes (Wells’ sundry settlements, 4X, LIBOR, ISDAfix, credit default swaps, money laundering, more money laundering, 1MDB). By my tally to banks have handed over $71 billion of stockholder money for various scandals. This does not include the mortgage market meltdown which is another pile of billions. All that money came from stockholders.
Other Wells Fargo fiascoes
Did some checking at Violation Tracker looking for some other fines I missed. Found a bunch.
$250M – 9/9/21 – penalty from OCC for “material deficiencies regarding the banks loss mitigation activities.” A range of risk management flops generated quarter of a billion penalty.
$72.6M – 9/27/21 – US Atty.-Southern District of New York – scam for overcharging 771 customers by forging the foreign-exchange rate. A variety of “Grace misrepresentations and deceptive practices” were used to overcharge commercial customers, including other federal interest institution and a lot of small and medium-sized businesses. Scam ran from 2010 through 2017. Just over 70 million is piddly compared to the 13.89 billion total for the Forex scams that I’ve been tracking. Wells made their splendiferous splash in other areas.
$145M – 9/12/22 – Employ Benefits Security Administration – Department of labor discovered that employees participating in the banks 401(k) plan or overcharge for company stock. Thank agreed to refund $131.8 to employees and pay penalty of $13.2 million. Wow. Overcharging employees for buying stock.
$28M – 12/2/21 – private litigation – not telling customers their phone calls are being recorded.
$95.7M – 12/8/21 – private litigation – bank failed to pay for rest breaks not taken by mortgage consultants. Under California law you must get certain rest break for every four hours you work. If you don’t get the break (and if the employer can’t document the break was taken) employer has to pay extra for the rest break that was kept. Obviously a bunch of staff worked through a bunch of breaks.
Then there’s $22M for whistleblower retaliation, $18.7M for employment discrimination, and another $35M for wage and hour violations.