The giant bank at the center of a blossoming scandal over bank accounts and credit cards that were created for unsuspecting customers gave $70,000 this election cycle to members of the Senate committee who Tuesday will question Wells Fargo’s chief executive officer. “I accept full responsibility for all unethical sales practices in our retail banking business”. Stumpf had been facing criticism after an interview last week in which he implied that retail banking employees were to blame, and his prepared remarks seem to indicate a shift in tone. Some 5,300 Wells Fargo employees have been fired. Those proposed rules would require banks to take back pay for wrongdoing for at least seven years after the executive receives the payment.
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The Department of Justice (DOJ) has reportedly opened an investigation only now that Congress has called hearings to look into the matter on Tuesday, and the OCC had been collecting consumer complaints for years before taking part in the recent settlement, noted Black. The plaintiffs referred Wells Fargo’s firing of around 5,300 employees as “cosmetic” with the bank’s intention to offer “plausible deniability”.
Ruth Landaverde, a former worker at both Wells Fargo and Bank of America, said the pressure was intense at Wells and at BofA.
For example, it aimed for each customer to have a checking account, savings account, auto loan, mortgage, personal loan, credit card or other banking service. The average Wells Fargo household had on average more than six products with the bank, a metric Wells top executives would highlight every quarter with investors.
According to the complaint, the “abusive and fraudulent tactics” undertaken by the bank’s employees in order to meet sales targets has hurt customers. “Anti-bank populism is very popular among the bases of both political parties, providing little room for error in the financial services industry and considerable political cover to regulators”, the analysts write.
Combine those investigations with the Senate inquiry, plus the original discipline from the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, and it shows that the banking business is nowhere close to being out of the crosshairs yet.
In the letter sent to customers, Clinton laid out a three-prong plan to address what she called “the culture of misconduct and recklessness” in the banking system.
Democratic Presidential candidate Hillary Clinton.
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Blue-collar criminals meet their lawyers for the first time in a jail cell, while for white-collar crime, “the lawyer is there helping you implement the program”, said Black, who said the latter crime is prosecuted only when an agency like the OCC makes a criminal referral to the DOJ. The bank also agreed to pay $5 million in customer remediation and retain an independent consultant to assess whether the bank’s policies and procedures are created to ensure that its sales practices comply with federal law.
