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Wells Fargo Hit With 'Unprecedented' Punishment Over Fake Accounts (cnn.com)
An anonymous 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," including its notorious creation of millions of fake customer accounts. Wells Fargo won't be allowed to get any bigger than it was at the end of last year -- $2 trillion in assets -- until the Fed is satisfied that it has cleaned up its act. Under pressure from the Fed, the bank agreed to remove three people from the board of directors by April and a fourth by the end of the year. It is the first time the Federal Reserve has imposed a cap on the entire assets of a financial institution, according to a Fed official. "We cannot tolerate pervasive and persistent misconduct at any bank," outgoing Fed Chairwoman Janet Yellen said in a statement. Friday was her last day on the job....
Wells Fargo admitted that its workers responded to wildly unrealistic sales goals by creating as many as 3.5 million fake accounts. The bank has also said it forced up to 570,000 customers into unneeded auto insurance... About 20,000 of those customers had their cars wrongfully repossessed in part due to these unwanted insurance charges. In August, Wells Fargo was sued by small business owners who say the bank used deceptive language to dupe mom-and-pop businesses into paying "massive early termination fees." The company was in the headlines again in October for charging about 110,000 mortgage borrowers undue fees.
One U.S. congressman argued that the harsh penalty "demonstrates that we have the tools to rein in Wall Street -- if our regulators have the guts to use them."
Wells Fargo has also spent $3.3 billion on legal bills in just the last three months of 2017.
Wells Fargo admitted that its workers responded to wildly unrealistic sales goals by creating as many as 3.5 million fake accounts. The bank has also said it forced up to 570,000 customers into unneeded auto insurance... About 20,000 of those customers had their cars wrongfully repossessed in part due to these unwanted insurance charges. In August, Wells Fargo was sued by small business owners who say the bank used deceptive language to dupe mom-and-pop businesses into paying "massive early termination fees." The company was in the headlines again in October for charging about 110,000 mortgage borrowers undue fees.
One U.S. congressman argued that the harsh penalty "demonstrates that we have the tools to rein in Wall Street -- if our regulators have the guts to use them."
Wells Fargo has also spent $3.3 billion on legal bills in just the last three months of 2017.
Now it's acceptable to sign people up for services they were never requesting and take money for them as long as they don't 'catch you'. What a wonderful new world we're headed for.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
Just a cap, for screwing over thousands of people? That's not even a slap on the wrist. Management should be in jail and the bank should have to pay penalties to the customers they wronged. Large penalties.
No bank doing business in America, whether it is domestic or foreign or sovereign, should have assets more than 2% of our GDP.
No investment bank should have FDIC insured deposits.
All retail banks with FDIC insure deposits should have equal access to investment banks.
Courts are ruling corporations are people. All the hard won freedoms and liberties of real citizens is being usurped by these corporations. Once these corporations become more powerful than the government, it is game over for real citizens.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Pretty sure the OP meant corporate death penalty. They lose their status as a corporation, and all protections against liability that it includes.
Ideally it would basically make all shareholders members of a basic partnership, they would share in all expenses and liability that the corporation previously incurred - the partners wouldn't be able to get out fast enough plus no one would be willing to buy their share of the partnership. This would be better than imprisonment IMO.
Since this is a bank however, things get tricky as you can't have citizens losing their savings. In this case you'd have to treat it like the FDIC does a bankrupt bank - due the shear size of the bank it would become a circus trying to divide the customers up to other banks.
If someone fraudulently creates an account in someone's name and then incurs charges on that account, that's at least fraud and probably ID theft. If anyone here reading did that, we'd be talking to a judge or sitting in a cell (eventually). Wells Fargo does it to millions and a few people lose their jobs. If corporations want to be considered "people" then they have to be accountable as "people". Equal Justice Under The Law must be applied to these at least a few of these C level executives before I'll believe that we all can expect the same treatment for the same offense.
Why can't we go back to using jumpers to configure slot adapter cards? Why? I say!
I don't know why everybody doesn't just use a credit union. They're non-profits, so they simply have no reason to pull the kind of crap that Wells Fargo did to hundreds of thousands of people.
If you hate banks, remember: you do have another choice.
And if they sell the shares, with incumbent overall loss of asset value, then those with more shares in the bank are punished further. But maybe not far enough.
Wells Fargo is still fighting suits from the 2008 meltdown to this day, and Wells Fargo was part of the problem: fraudulent lending. None of this is new, it's just gone further berserk. Only rarely is there a bad reputation in banking, and Wells Fargo has one. But they don't care, and I doubt they ever will.
---- Teach Peace. It's Cheaper Than War.