A Friday-afternoon-in-August disclosure. Here’s its rap sheet of ongoing official scandals.
Friday afternoon, when no one was supposed to pay attention, Wells Fargo filed its 10-Q quarterly report with the SEC. It’s under “Note 13: Legal Actions,” which starts on page 122 and drags on for four small-print pages. “Note 13” contains Wells Fargo’s long rap sheet of disclosed ongoing government investigations and law suits in alphabetical order. The new item is on page 123:
Various unnamed government agencies – it didn’t disclose how many agencies or which agencies – are probing a new matter related to how the bank does business, this time its use of low-income housing tax credits (LIHTC), which is a multi-billion-dollar business for Wells Fargo.
Wells Fargo was exceedingly parsimonious with how much it disclosed about this “inquiry” by unspecified “federal government agencies”:
Federal government agencies have undertaken formal or informal inquiries or investigations regarding the manner in which the Company purchased, and negotiated the purchase of, certain federal low income housing tax credits in connection with the financing of low income housing developments.
That’s all it said about the inquiry. But the numbers are not inconsequential. As of June 30, the bank carried $10.4 billion in low-income housing tax credit investments on its books.
“We invest in affordable housing projects that qualify for the LIHTC, which is designed to promote private development of low-income housing,” it says in the section that discusses these investments on page 99. And it adds:
“These investments generate a return mostly through realization of federal tax credit and other tax benefits.”
The LIHTC, created under the Tax Reform Act of 1986, hands out incentives (paid for by taxpayers) to the private sector to fund the development or rehabilitation of housing aimed at low-income Americans. “Tax credits” means that Wells Fargo saves this amount dollar-for-dollar on its income taxes and thus increases by that amount its after-tax net profit.
Wells Fargo did not say what it was doing in its LIHTC business that aroused the curiosity and/or ire of “federal government agencies,” but typically with these Wells Fargo revelations, it starts out small and then snowballs.
So here is my summary of Wells Fargo’s rap sheet of ongoing “matters” under “Note 13: Legal Actions.” These are just the currently active investigations, scandals, and litigation listed in its 10-Q. The stuff that has been put to bed isn’t listed. You will notice several matters with allegations of retaliation against “former team members.”
“ATM access fee litigation”: Class action against Wells Fargo, Visa, MasterCard, and other banks filed in 2011. It wound its way to Supreme Court, which in November 2016 returned the case to lower courts, where it is still dragging on.
“Automobile Lending Matters”: This euphemism describes a scandal that blew into the open in July 2017. Wells Fargo admitted packaging unneeded “automobile collateral protection insurance” (CPI) and “guaranteed automobile protection” (GAP) into hundreds of thousands of auto loans, with customers not even knowing about it. In many instances, the higher-than-expected payments, when set up on automatic payment, led to accounts being overdrawn and payments bouncing, triggering many repossessions.
The bank entered into consent orders with the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB). It has also been subjected “to formal or informal inquiries, investigations, or examinations from federal and state government agencies, including a multi-state attorneys general group that is conducting an investigation into CPI and GAP.” And:
Multiple putative class action cases alleging, among other things, unfair and deceptive practices relating to these CPI policies, have been filed against the Company and consolidated into one multi-district litigation in the United States District Court for the Central District of California.
A putative class of shareholders also filed a securities fraud class action against the Company and its executive officers alleging material misstatements and omissions of CPI-related information in the Company’s public disclosures.
Former team members have also alleged retaliation for raising concerns regarding automobile lending practices.
Allegations related to the CPI and GAP programs are among the subjects of shareholder derivative lawsuits pending in federal and state court in California.
And it’s not all out in the open yet: Wells Fargo “anticipates it may continue to identify and remediate issues related to historical practices concerning the origination, servicing, and/or collection of consumer automobile loans.”
“Consumer Deposit Account Related Regulatory Investigation”: “The CFPB is conducting an investigation into whether customers were unduly harmed by the Company’s procedures regarding the freezing (and, in many cases, closing) of consumer deposit accounts after the Company detected suspected fraudulent activity (by third parties or account holders)….” And this:
A former team member has brought a state court action alleging retaliation for raising concerns about these procedures.”
“Fiduciary and Custody Account Fee Calculations”: The fee-overcharging scandal at Wells Fargo’s Wealth and Investment Management (WIM) blew into the open in March 2018, and is now being investigated by “federal government agencies.” Wells Fargo “has determined that there have been instances of incorrect fees being applied to certain assets and accounts, resulting in both overcharges and undercharges to customers.”
“Foreign Exchange Business”: The bank overcharged clients on foreign exchange rates. This scandal blew into the open in November 2017.
Wells Fargo said: “Federal government agencies, including the United States Department of Justice, are investigating or examining certain activities in the Company’s foreign exchange business,” it says. Wells Fargo has set aside some amounts “to remediate customers….”
CNBC said: “The malpractice is said to be tied to the bank’s unusual policy, where traders’ compensations were tied to how much revenue they brought in.”
“Inadvertent Client Information Disclosure”: “In July 2017, the Company inadvertently provided certain client information in response to a third-party subpoena issued in a civil litigation….”
“Interchange Litigation Plaintiffs”: This class action on behalf of merchants, regarding the fees of Visa and MasterCard transactions, involves Wachovia, which collapsed and was absorbed by Wells Fargo during the Financial Crisis. The litigation has by now made its way to the Supreme Court and back down to lower courts.
“Low Income Housing Tax Credits”: The new item – see above.
“Mortgage Bankruptcy Loan Modification Litigation”: This class action dating back to the mortgage crisis alleges that “Wells Fargo improperly and unilaterally modified the mortgages of borrowers who were debtors in Chapter 13 bankruptcy cases…. The amended complaint asserts claims based on, among other things, alleged fraud, violations of bankruptcy rules and laws, and unfair and deceptive trade practices.”
“Mortgage Interest Rate Lock Related Regulatory Investigation”: In April 2018, Wells Fargo, in consent orders with the OCC and CFPB, agreed to pay $1 billion “in civil money penalties to the agencies” and to remediate its affected customers. The order involves two items: the above-mentioned auto loans and “fees for mortgage rate lock extensions requested from September 16, 2013, through February 28, 2017.” And among others:
A class action has been filed against Wells Fargo, “alleging violations of federal and state consumer fraud statutes relating to mortgage rate lock extension fees.” And claims of retaliation:
In addition, former team members have asserted claims, including in pending litigation, that they were terminated for raising concerns regarding mortgage interest rate lock extension practices.
“Mortgage Related Regulatory Investigations”: This dates back to the mortgage crisis. Federal and state government agencies, including the Department of Justice, “have been investigating or examining” the “origination, underwriting, and securitization of residential mortgages, including sub-prime mortgages.” The new item: Wells Fargo has agreed to pay $2.09 billion just to resolve the Department of Justice investigation.
“OFAC Related Investigation”: Wells Fargo says that “certain foreign banks utilized a Wells Fargo software-based solution to conduct import/export trade-related financing transactions with countries and entities prohibited by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury.” It has made “voluntary self-disclosures” to OFAC and is “cooperating” with the Department of Justice.
“Order of Posting Litigation”: This scandal arose because banks posted the largest debit-card transactions first so that they’d drain the account. Small transactions that in fact had come before would then overdraw the account, thus triggering steep account overdraft fees each time, which further overdrew the account. This is an insidious trick that has proven to be immensely profitable.
The class-action law suits date back to the Financial Crisis. Eventually, “Wells Fargo moved to compel arbitration of the claims of unnamed class members,” which the court denied in October 2016, and the bank appealed to the United States Court of Appeals for the Eleventh Circuit. The new item: In May 2018, the court ruled in Wells Fargo’s favor, allowing it to “compel arbitration.” But “Plaintiffs have filed a petition for rehearing to the Eleventh Circuit.”
“RMBS Trustee Litigation”: In November 2014, a group of institutional investors, including BlackRock, filed a class action against Wells Fargo in “its capacity as trustee for a number of residential mortgage-backed securities (RMBS) trusts,” alleging that it “caused losses to investors” due to its, “among other things,… alleged failure to notify and enforce repurchase obligations of mortgage loan sellers for purported breaches of representations and warranties, notify investors of alleged events of default, and abide by appropriate standards of care following alleged events of default.” The situation ballooned and continues to drag on in the courts.
“Sales Practices Matters”: This is the euphemism to describe the mega-scandal of the so-called fake accounts – or “certain products or services provided without authorization or consent for the time period May 1, 2002 to April 20, 2017,” as Wells Fargo puts it.
Just about everyone has been investigating this: the CFPB, the OCC, the Department of Justice, the SEC, the Department of Labor, state attorneys general, prosecutors’ offices, and Congressional committees. Wells Fargo has settled with some of them. State law whistleblower actions have been filed with the Department of Labor. Numerous class action and single-plaintiff lawsuits are in the works, including Sarbanes-Oxley Act complaints, plus one class action “on behalf of team members who allege that they protested sales-practice misconduct and/or were terminated for not meeting sales goals.”
“Seminole Tribe Trustee Litigation”: More excess-fees litigation. “The Seminole Tribe of Florida filed a complaint in Florida state court alleging that Wells Fargo, as trustee, charged excess fees in connection with the administration of a minor’s trust and failed to invest the assets of the trust prudently….”
The Fed’s QE Unwind – “balance sheet normalization,” as it calls this – picked up speed in July. Read… The Fed Accelerates its QE Unwind
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Simple put, fraud is the business model at Wells Fargo. Income earned on fraud is upfront and center while the fraud is a footnote. I liked this especially – paid for by taxpayers – the sitting ducks waiting to be skinned as usual. When will the skinned turn around and skin the skinners?
KPL as long as we allow it and do nothing they will continue When are Americans going to Wake the hell up, get off the damn couch and change things Trump ain’t it Sadly
LOL, and what do you expect me to do? Do I have billions to invest in lawyers and lobbyists? Does my elected rep listen to me when his/her campaign costs millions of $$ to succeed? Do I get to meet and greet at highbrow parties in DC?
What exactly do you thing this citizen should do to facilitate change?
I can tell you one thing though, the Republicans are absolute whores whose only concern is making sure the rich get tax breaks, rolled back regulations, dismantling social protections and underfunding/undermining gov’t agencies to show how useless they say they are…… all this while pocketing cash they are given to carry out their nefarious deeds.
I hate the Democrats as well for a myriad of reasons.
So yeah, let me fight the good fight……hahahahahahaha
There is no fight left, the crony capitalists have acquired regulatory capture and unless you have a POTUS like FDR somehow ride to the rescue,highly doubtful, than you are a steerage passenger on the Titantic just like me.
Nicely put Dave.
Last week my car was towed by San Mateo City sheriff department. PG&E is only required to give 24 hours notice for tow-away zones. I was out of town for a night.
It cost $500 and half a day off work to get my car back. When I mentioned to my son how $500 would break a lot of people in this country (like me, 20 years ago) he didn’t miss a beat…”the system is working.”
Hello Dave P,
“What exactly do you thing this citizen should do to facilitate change?”
I would suggest closing any and all accounts at Wells Fargo. Don’t use their ATMs or any other service they may provide. Sell their stock if you have it.
Then, write down a sentence or two about your feelings about the bank and what you just did to fight back. Put it in an email, add a link to this article, and send it to everyone in your address book. Put it up on your Facebook page. Tweet it. Etc.
Every business needs customer attention in order to survive, so just ignore them and encourage others to do so as well. We don’t need lots of money to fight back. We can do way more damage than they can imagine without it. The people could literally kill an evil bank over breakfast.
No, the problem is that if it were not for Wolf street, the MSM – MSNBC the Wall Streeter keeps negative news under radar is how we get information. Thx Wolf Street
Any crime that is not enforced is de facto legal (only technically illegal). Bank fraud is no longer prosecuted and is commonly accepted by regulators and policing bodies.
I would suggest the more crimes a bank commits the more dedicated the management is to “growing earnings” – fraud is profitable. What WFC is doing is growing shareholder wealth. Management is doing their job and getting compensated, for a job well done, with stock option grants. WFC is up 15% yoy.
Who here has not driven 45mph in a 35mph zone? Would you be in favor of paying a fine for your behavior or do you like the system of looking the other way just as it is. The banking system seems to like the system they way it is and since they are self-regulated (by the Fed) and have captured the SEC, don’t expect things to change.
If 2008 is not proof that bankers are immune from prosecution (or even consequence) then what would convince you?
I have seen countries whose people turned a blind eye to corruption (most recently Brasil) and in the end there is a price to be paid for the lazy indifference – Americans seem content to turn a blind eye but also seem confident it will be different for them. My plan is to leave – and soon – be sure to direct deposit my welfare (social security) check into my Chilean bank account promptly each month. I look forward to collecting on the fraud that is social security – I will play the game Americans seem eager to continue – but I won’t live here.
“Any crime that is not enforced is de facto legal”
And emboldens the criminals. So in effect by not punishing the criminals the regulators are ensuring it keeps happening again and again. Along with the criminals these abettors should also be jailed.
People who follow the law are the fools! That is you and me!
“A racket is a planned or organized criminal act, usually in which the criminal act is a form of business or a way to earn illegal or extorted money regularly or briefly but repeatedly. A racket is often a repeated or continuous criminal operation.”
That describes all of Wall Street and 90 percent of NY By the way is Jon Corzine out of prison yet?
Are people beginning to realize that OUR givernments are corrupt from top to bottom and from side to side?
Wells is no different than any of the other big banks.
The Fed want to reduce the number of big banks….the market is saturated. Thus the ongoing witchhunt. It will result in the end of Wells. My prediction.
Will Warren Buffet allows this or will he save them and make another fortune out of it?
Yeah first the hint of cracks in the financial system, the Fed takes preemptive emergency measures, then they start looking around for a bank to throw under the bus, and here is a California based bank (a state for which GOP Washington has no love) although you wonder if WB would put up a fuss. Things happen in the fog of war, they could hit him on two fronts with a move against QuickenLoan-(Sharking and Usury). Is he a Liberal? He was Arnold’s economic advisor during the first campaign, but he wanted to raise property taxes, so he was dropped. Is Warren Buffet a short?
Unfortunately, Buffet is a huge long in WFB and his on-going silence is disturbing.
WFB’s board and it’s top tier of managers should have been long gone. Specifically, the ones sanctioning opening unauthorized accounts should have be put in jail.
WFB was a very respectable bank until the NorWest crowd bought it in 1998, threw out the legacy management, and changed NorWest’s name to Wells Fargo Bank.
Paraphrasing what they used to say at Oldsmobile, this is not your father’s Wells Fargo Bank.
I went a few rounds with Quicken Loans. Last minute interest rate rape, then 9 mos later to discover they shorted the escrow account and the payment is $1,000 a month more for the next 12 months, then $300 a month increase for the balance of the Mello Roos taxes.
I love their new ad campaign “Regaining your trust”, it’s sweet.
Yeah right Good luck with that chumps NOT gonna happen
One of their new ads shows a young African-American woman with a toddler in-hand entering a Wells branch. A heartfelt scene from a heartless company with a heartless ad agency.
“See, sweetie? This is a bank. Its business model is fraud and greed.”
Wide-eyed toddler looks up at Mom. Clearly, the toddler doesn’t understand the words in the third sentence. But that child is about to get educated. Because of stories like this one:
News of the settlement:
Have you noticed that ads for truly scummy big businesses feature minority single mothers and/or teary-eyed women who look like they’ve just been pulled back from a suicide attempt?
These investigations, prosecutions and affordable fines are just a part of the cost of doing business. The fraudulent business practices that are to blame will not be ended by Wells. If Wells is unhappy, its lobbyists will pay to have the funding and authority of the investigators and prosecutors reduced or terminated. Problem solved and business is great again. Other corporations that prey on the public follow the same pattern.
Of course there are other consequences. The levels of poverty, anger and violence in the country are increasing. I think of it like California’s wildfires that keep growing and spreading and becoming more violent.
Quite right. You only get in trouble if what you are doing is illegal. So, pay Congress to make it legal. Problem solved.
As I see no reason that other banks aren’t doing the same, I assume that Wells’ leadership is just so stupid that they keep getting caught.
As I no longer trust American corporate governance, I do my best to just not spend any money that I don’t have to. Ends up that I don’t have a bunch of useless crap eating up my garage space, and I have plenty of cash for emergencies. But to each his or her own.
As another “Old Geezer” I agree about the current social/racial/economic/political atmosphere that is increasingly “violent” here in the US will not have a good ending.
As far as WF is concerned, most Americans want “things” to be simple and “effortless” when doing their daily business. That leads to enormous opportunity for businesses to exploit those desires in mind deadening advertising for “enjoying” your “freedoms” while you “shop”.
“Greed” does not equal, “Trust”. Quite the contrary. Greed depends on breaking that illusion of trust at every turn.
A system based on greed will destroy trust at every turn. And the public comes back for more…..so who is to blame more?
$$$$ depends of the public’s ignorance on how the game is played. WF and so many other businesses thrive on that ignorance.
The fish rots from the head down, so all of this resides at the feet of the Board of Directors and senior management. It is also sad in that this is a storied institution. I started my career at Wells in the asset management division in the early 1980s, which is now a Blackrock’s index business. My great, great grandfather used to drive a stagecoach in the 1870s. The culture of the institution has been compromised, as have many financial institutions.
The creation of the CFPB as an arm of the Federal Reserve was an especially malevolent act. It’s sickening to see the native American senator from MA claiming the CFPB’s creation as a pro-consumer agency. Blue wave indeed.
The CFPB was supposed to improve financial disclosure and protections for the small investor/saver/borrower. If it isn’t all that you hoped it would be, blame Congress for not passing a tougher law.
I hope you understand that the financial industry hates the CFPB and has spread anti-CFPB propaganda from day one. The fact that Congress made it financially independent from the appropriations process (by having it funded via the Federal Reserve) is so that the CFPB cannot be defunded or otherwise influenced by lawmakers who’re caving (as they always do) to financial industry lobbyists. Now the CFPB is getting gutted from the inside. And some of the most unsavory financial industry elements, such as payday lenders, that were on the hook, are already being let off the hook. So your wishes are coming true :-]
“Look at what they do,” is my favorite motto. I wouldn’t care who funded the CFPB, if they actually went after frauds against consumers. The list of known frauds against the public are all well known and not a peep from the left about addressing any of them, all while taking credit for creating the agency. I can only conclude that the left wants the agency gone as much as the right, and it was only more Kabuki for the base. That’s my view from the cheap seats.
You’ve listed nothing as to what they do that’s bad, and no details on supposed “known frauds against the public” that are “are all well known”.
The financial industry’s relentless pressure to gut the agency, and Republicans sabotaging it by putting an industry hack in charge, tells me it’s doing more good than harm for the public.
My first target would be the frauds by mega landlords against renters. Checkout the review websites for any of the major ones, it’s obscene. There are millions of victims and this is only one example.
So there are lots of folks who believe the CFPB are “good guys” fighting “bad actors”. Wish they were honest about it, but little evidence to support it. Study their actions carefully.
CFPB is able to assess fines and use the funds to finance it’s own operation. They have often assessed fines retroactively based on new rules. Think about that.
Imagine being pulled over by the police and finding out your vehicle no longer complies with a NEW rule. The policeman assesses a citation and $1,000 fine ( which goes back into the police budget and also funds his bonuses). But it doesn’t stop there because he claims your car has been out of compliance for 1 year, so the fine is multiplied for the period of non-compliance – $100,000 instead of $1,000. You claim the rule is new and that you had nothing to comply with previously. Sorry he says.
The CFPR rules are supposed to assist, especially the most vulnerable consumers (and borrowers). Study the rules and you will easily conclude that people are “protected” enough to actually prevent them from getting access to credit. So your car needs a repair or you lose your job. $500 loan at a high APR results in $750 debt, which sounds outrageous. Is keeping your job worth $250? Or maybe it is just easier to drop out of the workforce. Hmmm
Shine sun light on it. It disinfects.
Your analogy is wrong. The CFPB, according to (LAW 360) and (US of A Before CFBP) have been going after violations before the CFPB existed but the violations were still violations prior to the CFPB. The crime was already a crime not some new one as your story implies.
Check out DC court of appeals rulling against cfpb & Condray and their $100+ million fine on PHH. Yep you read that right …the DC Court of Appeals of all courts. Just one example. Not sure if the CFPBs structure has been deemed inconstitutional yet. Who polices the police?
Can’t resist … The “good guys” at the CFPB threatening to fine lenders a few years back for discriminating on car loans. Well there was a fundamental problem …in the vast majority of the cases, the lenders didn’t have direct contact with borrowers and therefore had no idea about the borrowers race. And the CFPB didn’t know the race either. So amazingly the CFPB was using a race “proxy” which was borrower name and address. So if your name was Rodriguez and you lived on the wrong side of the tracks the CFPB made the ASSUMPTION that you weren’t white …and that guesswork was their basis in determining whether the lender was discriminating. Would be interesting to know how the CFPB classified John Or Mary Smith.
The only real CFPB standards are their double standards.
The lenders have no idea of race because they are barred from asking..
Right from the pages of the CFPB itself:
“We ensure that lenders are complying with fair lending laws and are addressing discrimination across the consumer credit industry. Information on consumer race and ethnicity is required to conduct fair lending analysis of non-mortgage credit products, ((but auto lenders and other non-mortgage lenders are generally not allowed to collect consumers’ demographic information)). As a result, substitute, or “proxy” information is used to fill in information about consumers’ demographic characteristics.
In this paper, we explain the construction of the proxy for race and ethnicity currently employed by our Office of Research and division of Supervision, Enforcement, and Fair Lending. This report also provides an assessment of the performance of the proxy method using a sample of mortgage applicants for whom race and ethnicity are reported
@David, How do you discriminate by race when you don’t know someone’s race?
And regarding, “Right from the pages of the CFPB itself”, lets review some of the wording right from the pages of Wells Fargo doc’s. But the Cfpb are the “good guys”, eh?
I can’t speak for where you are but here in “Socialist” Seattle, Socialist Alternative has been going after “mega” landlords for years. Maybe your definition of The Left is different from mine and you believe Hillary Clinton should be included. I’d love to see your list where the left is silent about financial frauds on the public.
The Seattle city council voted to divest Seattle from dealings with Wells Fargo because WF is little different from the Mafia excepting for the broken knee caps part and a Congress that will do what it must to keep the bribes flowing. Seattle had to swallow a bitter pill when they couldn’t find a suitable bank giving rise in WA State to a push to follow North Dakota and form our own state bank..
Socialist Alternative and banking as a public utility, I like you.
If you search banking fines for JPMChase, you will find it is the leader of fines since 2008- about $51.5 billion. They were fined $1.7 billion in the Madoff case under anti-laudering activities as JPM knew 10 years before, Madoff was a Ponzi and was kiting checks from one bank account to another. Read “ JPMadoff” written by the lawyers trying to recover funds of Madoff victims. It was also fined $920 million in the London Whale incident and $1.34 billion for currency manipulation. And $5.29 for robo-signing. Where was all the press stories on these fines? But lately it is all about Wells. And Wells is catching up at about $22 billion and then Citi at $7 billion.
But all these TBTF banks are using their size to avoid any true justice. Paying a fine is simply business and if one is doing it they all are to stay competitive. Shareholders pay the fine.
Did any executives receive fines or jail time? No.
I am sorry Wolf, but you picked a topic that I have read extensively since the 2008 crash. But I am glad your not afraid to enlighten us about these corrupt banks.
I think Wells is the next bank to be eliminated exposing their corrupt activity via the media, but they are not the only bad player.
Lehman was eliminated also to thin the competition because if the Fed saved AIG they could have saved Lehman. Read “The Fed and Lehman Brothers” by Laurence M. Ball.
If AIG is not bailed Goldman crashes as AIG has most if their CDS covering their butt.
AIG was bailed out, not only to save Goldman, but to save their Starr Insurance companies in China. They didn’t report much on the extent to which these subsidiaries in China would have failed or the political consequences of such failures.
If you read the history of C.V. Starr, the founder of AIG, you will see all kinds of deep state actors.
Lovely bunch of parasitic psychopaths Things will NEVER change until people pay the ultimate price for such crimes They destroy hundreds of thousands of lives and walk the street(or more accurately ride their limos) America has “whimped out” folks
None of this could happen (anywhere) without a sublimely ignorant public (consumer). Education is a lifetime experience, not just in the “school” years.
And you are correct….too much of the US (global) business community are “parasitic psychopaths”.
The “Commons” be damned!
http://www.wallstreetonparade.com has also chronicled these transgressions, and I agree with you 100% Laughing Eagle.
The banks that were insolvent in 2008 should have been left to go under. Instead, the Fed and TARP (signed by President George W. Bush) saved these criminal enterprises.
Wolf, that’s one hell of a stack of fraudulent actions perpetrated by Wells Fargo that you’ve laid out for readers to digest!
Laughing Eagle and Dan Romig,
Just to clarify, the items on the list are just the currently active investigations, scandals, and litigation listed in the 10-Q. The stuff that has already been put to bed isn’t listed.
This sleaze is not going to stop until we see bank charters yanked and/or executives going to prison. Fines land on the shareholders and the execu-trash breezily shrug them off.
Someone(s) allowing Wells Fargo to continue to do what they do. The head must be cut off now!
The old head already got cut off last year and a “new” head was glued on. That new guy, Sloan, is a 30-year veteran at WF and was COO overseeing all the prior scandals. I expect that he will implement huge changes at the bank :-]
More seriously, Wells Fargo is reputation wise, the Uber of banks. They might make money in a different way that Uber, but they have the same “Money is all that matters” mentality.
The saddest thing about all of this is that Wells Fargo still has customers. What that says about about Americans is not comforting. The funniest thing about it is that it goes to show that the Mafia isn’t dead, it’s just found that stealing is a lot easier for bankers and they don’t ever go to jail.
Widespread use of automatic transactions makes it a big hassle to switch banks. And switching may just land you under the control of different fraudsters.
Break ’em up! Higher FDIC insurance fees on TBTF banks!
I agree. How could anyone know which bank to put their money into?
Kent – Put your money in a regional bank or credit union who does not trade derivatives, and most do not. Avoid the TBTF banks and even their credit cards. Why give them any business!
Seems to me any bank would be an improvement Maybe not JP Morgan or BOAMexico or Citi but there are lots of small banks and credit unions When I last banked in the states I used Bridgehampton National Bank And they were pretty good
Unfortunately it’s pretty difficult to avoid using a credit card that isn’t from a TBTF bank as there are only a few large-scale issuers. Cards issued by credit unions and smaller banks are usually managed by a TBTF division if you check the fine print on the back of the card.
The credit card industry is all about big scale. I used to work for a medium-sized bank for whom credit cards was their only line of business, that was swallowed by Bank One, then Bank One was swallowed by Chase.
I agree and find myself aghast at how on gods earth anyone could continue to use that criminal bank It’s unfathomable to me
Well, I’m an example of a current WFB account holder:
The reason I stay is because of my 2012 mortgage, 15-year fixed at 2.75% with 0.25% off for automatic mortgage payment from my WFB DDA account. I’ll do this part of my banking there until the loan is paid (no, I’m not about pay off a 2.5% loan early).
However, your virtue signaling is impressive.
The culture of the nation was compromised long before 9-11. How about 1964, when President Johnson lied to the American public about the Gulf of Tonkin incident. As I recall, there never was a formal declaration of war by Congress, but 58,000 Americans died in the conflict just the same.
Recommend: “Necessary Illusions” Noam Chomsky/Edward Herman. I believe around 1991. Easily either in book form or available on YouTube. Should be introduced in first grade and then every year mandatory watching until you are dead. Yes, dead. Our whole system is based on the necessary illusions of illusions.
chomsky’s “manufacturing consent” is great, too. but my favorite explanation is by george carlin:
What’s old man Buffet doing????
J/K. He loves these kinds of businesses i.e. when it comes to Wall St and banks he’s always been willing to look the other way.
Rates- I think Buffett is two faced. One cannot copy his success because he can make behind the scenes deals.
He likes to talk country, but he is elitest. Would never follow his advice, besides he is a CNBC talking head.
Of course the lovely old uncle Warren is just another greedy , self serving , scumbag or should I say hot air bag His grandfatherly figure nonsense never fooled me
Wells Fargo says hundreds of customers lost homes after computer glitch
You can tell a corporation is hugely dangerous when a $2 billion fine is just a cost of doing business.
Wonderful content. the article compiles a list of items one should consider when choosing a bank and once you do, bank functions that need monitoring to avoid excessive fines. These aren’t your venerable banks that your father grew up with .
Bring back William Black! He knew he knew how to put bankers in jail.
Michael Hudson makes a great case for public banks. http://www.unz.com/mhudson/the-next-financial-crisis-and-public-banking-as-the-response/
Reply to Petunia above about the “left”:
There is no “left” in the US.
What passes for the left is something “imaginary” as to what the “left” in politics is all about.
The “left ” left the scene after WW2 and has never (including most of organized labor of which I was a part) looked back.
It needs a good rear-view mirror now.
The left wants to muddy the waters because the party is shifting away from the place where big donors feel nice and safe. The destruction of labor in favor of the educated liberal was a deliberate party objective. I too saw this first hand, coming from a working class, unionized family. The left abandoned labor in order to be with HIM and HER. Check out Thomas Frank on video, he says it better than anyone.
Petunia, that is exactly what happened. Trade deficits and wage suppression ceased to be an issue when the financial industry started writing checks for both parties. Fear of punishment vanished after no one was convicted for the last financial crisis. That’s why Wells Fargo is doing what it’s doing.
Yep, for a simple reason. They were only a means to an ends. Or as a Pol in early 2016 told a conflicted and well connected supporter (whose father had served with the same Pol years before) “we don’t need them anymore”. Educated? … maybe. In this case, the Pol thought immigration had put them past the tipping point. Guess he got a surprise in Nov.
Years ago the Left would never let NAFTA happen. I knew game was up when that passed.
Where’s Warren Buffett? He no doubt has placed several directors on the board of Wells Fargo. Since his controlling interest purchase he “seems” to be oblivious of what’s going on at Wells Fargo. How dare the media should hurt his reputation by reporting on all the scandals? If the profit gains exceed the criminal penalties why not?
Wells contains what was once Wachovia, a large Southeast US bank with a sterling blue chip reputation. There was a liquidity crunch at Wachovia during the crisis and they were not assisted like virtually all of the other troubled banks. Never understood who they has pissed off along the way to get the short end of a winners and losers pickum game… interestingly as an aside, Citi was the most likely acquirer. The US taxpayers have saved Citi more times that I can count. They should rebrand as Moral Hazard Bank. Anyway, Wells utimately got quite a bank for very little money. Always sensed a crony back room deal that sealed Wachovia’s fate and everything about Wells since has been sorta strong circumstantial evidence.
Wachovia might once have had a blue chip “reputation”, but they were scum of the earth mortgage fraud bankers in 2006 or so, which is why they went under in 2008. Wrote a ton of bad loans. Your phrase “Liquidity crunch” is a euphemism for “failed to ensure borrowers could repay loans”. They were issuing fog-a-mirror loans on the theory that the collateral would never lose value. They were dead wrong and should have paid a steeper price.
Still, maybe not as bad as Countrywide or some of the other sleaze out there, though.
I think you are remembering their Golden West acquisition (Specialized in pick a payment loans). That was definitely a big mistake. The liquidity crunch was not credit quality …that takes a while. There was basically a run on the bank and it happened over the course of a few days.
Low income has been a fast growing industry, icing on the TBTF cake.
BTW, the problem with none of the perps ever going to jail is that they just put on new disguises and get into new rackets.
The jailing of the S&L scammers in the ’80s kept things clean for a while, but the failure to implement justice after ’08 means we’re in for even worse times ahead. Because nothing was fixed, it was all just papered over at the expense of middle class savers and the lower and middle class homeowners who lost everything in the bust.
DO NOT use a megabank.
DO NOT vote for either democrats or republicans
DO NOT invest in “corporate bond” funds (you are lending to megabanks)
DO NOT invest in index funds if you can avoid it (you are funding all the criminal megacorporations more than anything else)
I think the majority of Americans are center.
It is the elitist owned media who create the left and right to keep us all divided and fight over reality TV junk, while they lie and steal from us easily.
Today TV news is a total waste of time. They do not want to inform, but tell us how and what to think.
:-/ Interesting thingy came up learning Gaelic: “beg” means little, “mor” means big.
Political language is probably doing something similar. “Left” and “Right” both mean Right. “Center” means Left. “Right” still means Right even though it is wrong. Got that?
agree with above. propaganda is ubiquitous. “everything you know is a lie.” it is Orwellian, and all enabled by crooked career criminal politicians. I cannot print what additional thoughts I have right now with respect to a ‘solution.’ thank you wolf for publishing truth, and interesting and important articles.
I worked for many years at one of WF’s competitors.
My last few years, I sat next to the guy who ran the litigation tracking system. “Hey, Joe, how many lawsuits are there against the bank today?” And he would type in a few lines of SQL and say “103,208”!
We had 5000 lawyers on the payroll, and another 5000 on contracts. We also had over 4000 legal entities within the overall holding company – fortunately, they weren’t allowed to sue each other.
The title of this article should have been “ Wells Fargo just does let up with the scams.”