Author Name: ProPublica
This story was originally published by ProPublica. [1]
The Price of Wells Fargo’s Fake Account Scandal Grows by $3 Billion
Date: 07, 2021
The practices covered by the settlement — which includes an admission by Wells Fargo that it falsified banking records and harmed customers’ credit ratings — are not the only misbehavior the bank has revealed since 2016. Since the allegations came to light in a settlement with California authorities and the Consumer Financial Protection Bureau, the bank has also admitted it charged mortgage customers unnecessary fees and forced auto loan borrowers to buy insurance they did not need.
The mortgage and auto loan claims are not part of Friday’s deal, and Justice Department officials declined to comment on whether they intended to take more action against the bank. They said the settlement also did not include similar conduct that fell outside the 14-year period.
Wells Fargo is still under investigation by the Consumer Financial Protection Bureau for abruptly closing customers’ accounts, and has said in regulatory filings that the authorities are looking into improper fees it charged wealth management customers.
Friday’s deal is also unrelated to a continuing criminal investigation of former Wells Fargo executives’ individual roles in the sales practices scandal. On Jan. 23, the Office of the Comptroller of the Currency fined former top executives millions of dollars each for overseeing the bank while it abused customers. A former Wells Fargo chief executive, John G. Stumpf, agreed to pay $17.5 million. Carrie L. Tolstedt, Wells Fargo’s former head of retail banking, is contesting a $25 million fine.
Ms. Tolstedt was described by title, but not by name, in the court papers filed by the Justice Department as part of Friday’s settlement. She appeared as “Executive A,” who the filings said was the “senior executive vice president in charge of the community bank” from 2007 to 2016, a position Ms. Tolstedt held during that time.
According to the papers, Executive A ignored concerns that other executives raised about cross-selling, lied to regulators and Wells Fargo’s board, and tightly controlled the bank’s public disclosures.
In 2015, the bank developed a new way to calculate the volume of accounts it was opening for customers, noting whether the accounts were used or simply sat dormant. But it never released the figures produced by this new method, “in part because of concerns raised by Executive A and others that its release would cause investors to ask questions about Wells Fargo’s historical sales practices.”
[1] Url:
https://www.nytimes.com/2020/02/21/business/wells-fargo-settlement.html
