About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (February 3, 2020)

handle is hein.crs/govbezz0001 and id is 1 raw text is: FF. ' ,iE S .r. i , Updated February 3, 2020 Wells Fargo-A Timeline of Recent Consumer Protection and Corporate Governance Scandals Wells Fargo Bank, N.A., is a large federally chartered depository bank. It is a subsidiary of Wells Fargo and Company, a bank holding company (hereinafter, Wells Fargo or the bank). Wells Fargo is the fourth-largest bank in the United States with $1.9 trillion in assets at the end of 2019. In 2016, a scandal involving Wells Fargo creating fake accounts which may have harmed more than 2 million consumers increased scrutiny of the bank by Congress, financial regulators, and the public. Since the scandal was revealed to the public, certain of Wells Fargo's business practices have continued to raise concerns relating to consumer protection and corporate governance, leading to additional congressional oversight and interest. This In Focus provides a brief overview of federal regulation of Wells Fargo and a timeline of key events involving the company since the scandal's disclosure. It then discusses a few relevant policy issues, including consumer protection and corporate governance, and highlights recent instances of congressional oversight of the bank. 0-,0 ,,-Ai--w (>-,f , o, Similar to other large banks, several federal financial regulators have overlapping oversight authority of Wells Fargo. Although the Office of the Comptroller of the Currency (OCC), Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) each have safety and soundness authority, the OCC is the primary prudential regulator of Wells Fargo's bank subsidiary. The OCC regulates Wells Fargo's internal controls, its management of operational and reputational risks, and its deposit and lending activities. The Federal Reserve has authority over the bank holding company. The Bureau of Consumer Financial Protection (CFPB) regulates and supervises Wells Fargo for consumer protection compliance. Ksey *w ls, The following provides a timeline of selected events involving Wells Fargo since the reveal of the fake accounts scandal. Most of the consumer protection issues discussed below came to light as a result of consumer complaints or lawsuits that were eventually disclosed by the bank. September 2016: Wells Fargo pays $185 million in fines to the CFPB, OCC, and the City and County of Los Angeles for creating about 1.5 million unauthorized deposits and 623,000 credit card accounts in customers' names without their knowledge. Wells Fargo also discloses that it previously fired 5,300 employees for their involvement in creating these fake accounts. In coordination with the Department of Justice (DOJ), the OCC assesses $20 million in civil money penalties against Wells Fargo for violating the Servicemembers Civil Relief Act (SCRA; P.L. 108-189). The OCC also orders the bank to make restitution to servicemembers who were harmed. Violations include failure to accurately disclose servicemembers' active-duty status to the court prior to evicting those servicemembers and failure to obtain court orders prior to repossessing 413 servicemembers' automobiles. In November 2017, Wells Fargo admitted it had illegally repossessed another 450 servicemembers' cars. * October 2016: Wells Fargo's chief executive officer (CEO), John Stumpf, retires. Between forfeiture and clawbacks, he surrendered $69 million in compensation. Another key executive, Carrie Tolstedt, surrendered $67 million in compensation. Wells Fargo's board names the chief operating officer, Timothy Sloan, as the new CEO. * December 2016: As a consequence of deficiencies in Wells Fargo's living will, regulators restrict Wells Fargo's ability to grow its business. P.L. 111-203 (often called the Dodd-Frank Act) requires certain companies to submit a living will to regulators to show how large banks would unwind themselves in the event of a large financial loss. March 2017: The OCC downgrades Wells Fargo's Community Reinvestment Act (CRA) rating to needs to improve, from outstanding due to Wells Fargo's discriminatory and illegal credit practices, including the fake accounts scandal. April 2017: The Sales Practices Investigation Report (SPIR) issued by Wells Fargo reveals that the bank's board of directors and bank executives knew of many of the issues underlying the fake accounts scandal as far back as 2002. July 2017: Wells Fargo admits that it charged about 570,000 customers for auto insurance on car loans without verifying whether these customers already had existing insurance. As a consequence, up to 20,000 customers may have defaulted on their car loans. October 2017: Wells Fargo admits it wrongly fined 110,000 mortgage clients for missing a deadline, even though the delays were the bank's fault. gognpo goo g , q 'S a X 11LULANJILiN,

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most