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Can Wells Fargo save itself? | CNN Business

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Wells Fargo has reached a $3.7 billion settlement with regulators over the bank’s “widespread mismanagement” that allegedly affected more than 16 million consumer accounts.

The Consumer Financial Protection Bureau said Wells Fargo’s systemic failures included elements so egregious you have to wonder if the bank was simply testing how bad it could be before getting caught. Things like:

  • Repeatedly wrong loan payments
  • Wrongly seize houses
  • Illegal repossession of vehicles
  • Incorrect assessment of fees and interest
  • Charge surprise overdraft fees

A total of $2 billion from the settlement will compensate customers. (Which I’m sure is a welcome payday, though it can hardly undo the trauma of having your house wrongfully seized or your car taken away…)

The watchdog also ordered Wells Fargo to pay a $1.7 billion civil penalty.

KEY CONTEXT

Unfortunately, all of this echoes earlier reports of Wells Fargo’s practices that have emerged since 2016, when its fake accounts scandal made national headlines. my colleague Matt Egan written.

As a reminder: at the time, it was found that the bank’s management pressured rank-and-file employees to aggressively push consumer products to increase sales and revenue to meet certain quotas. Wells Fargo employees ended up creating millions of bank accounts for customers without their knowledge.

In 2020, the bank paid $3 billion to the Justice Department and the Securities and Exchange Commission after admitting that between 2002 and 2016 it pressured employees to meet “sales targets unrealistic practices that have led to thousands of employees providing millions of accounts or products to customers under false pretenses or without consent, often by creating false records or impersonating customers.

The good news is that the fraud has been covered up and the really rich and powerful people responsible for it have gone to jail…I am joke. It’s America. Some executives were confronted accusations of misleading investorsalthough most settled out of court, as they are wealthy and can afford to pay high fees (unlike many customers they cheated out of hard-earned money).

Wells tried to pull herself together and move past the scandal. It’s not going so well.

Here is CFPB Director Rohit Chopra on Tuesday’s settlement:

“Wells Fargo’s rinse-and-repeat cycle of breaking the law has hurt millions of American families.”

The bank is still very much in the penalty area. Chopra described Wells Fargo as a “repeat offender” and a “repeat corporate offender,” adding that Tuesday’s fine is just a first step toward holding the bank accountable.

Chopra said more fines may be pending.

In response, Wells Fargo pointed out that the high-profile settlement with the CFPB resolves several issues, most of which have been “outstanding for several years.”

The bank said the required actions are “already substantially complete.”

“We and our regulators have identified a series of unacceptable practices that we have worked systematically to change and provide corrective action to customers when warranted,” said Wells Fargo CEO Charlie Scharf, who took the helm in 2019. with a mission to clean up the mess left behind. by his predecessors.

TIME FOR A BREAK?

The network of scandals at Wells Fargo is huge, and after six years of fallout, many people aren’t convinced the bank can save itself.

“This latest litany of legal violations cannot be fairly characterized or dismissed as mere ‘mismanagement’,” wrote Dennis Kelleher, CEO of the nonprofit Better Markets, calling on regulators to consider dismantling the bank. “This type of pattern and long-standing practice of illegal activity is more frequently seen in criminal enterprises, not in America’s gigantic banks. Any other company in America with such a repeat record of breaking the law…almost certainly would have been shut down by now.

The breakup idea would probably have support. Last year, Senator Elizabeth Warren urged the Fed to revoke Wells Fargo’s status as a financial holding company and ask it to separate its traditional banking business from its non-banking business.

“The only way these consumers and their bank accounts can be protected is through another institution – one whose business model doesn’t depend on scamming customers for every penny they can get,” he said. writes Warren in a letter to the central bank.

Twitter has been a mess for two months that it’s been owned by Elon Musk. This is good news for its increasingly popular rival. Mastodon had around 300,000 monthly active users as of October. Since last month, this figure has drawn up to 2.5 million — an increase of more than 730% — according to its founder. Mastodon is like Twitter and has quickly become the go-to alternative for people put off by the Musk era of the biggest social platform.

Meanwhile, on Twitter: After a Twitter poll showed a majority of users want Elon Musk to step down as CEO, Musk is… change how polls work.

  • 3M, the conglomerate behind Post-Its and Scotch tape, will stop making “chemicals forever” which are found in hundreds of household items by the end of 2025. Recent science suggests that the chemicals are far more dangerous to human health than scientists originally thought.
  • As tradition dictates, the United Kingdom will soon put into circulation new banknotes bearing the image of the monarch, King Charles III. Here is what they will look like.
  • The European Union has reached an agreement with Amazon which will resolve multiple antitrust investigations into the company and impose binding restrictions on its operations. It includes a pledge not to use third-party sellers’ data to benefit Amazon’s own marketplace listings, a practice that policymakers around the world say is anti-competitive.

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