Who’s afraid of Wells Fargo?

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

The Consumer Financial Protection Bureau said Wells Fargo’s systemic failures included some stuff that’s so egregious you kinda have to wonder whether the bank was just, like, testing how evil it could be before it got caught. Things like:

  • Repeatedly misapplying loan payments
  • Wrongfully foreclosing on homes
  • Illegally repossessing vehicles
  • Incorrectly assessing fees and interest
  • Charging surprise overdraft fees

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

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

KEY CONTEXT

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

As a refresher: Back then, the bank’s leadership was found to have pressured rank-and-file employees to aggressively push consumer products to boost sales and revenue to meet certain quotas. Wells Fargo workers ended up creating millions of bank accounts for customers without their knowledge.

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

The good news is the fraud was snuffed out and the really rich, powerful people who are responsible for it all went to jail… I’m kidding. This is America. A few executives have faced charges of misleading investorsthough most have settled out of court, because they’re rich and can afford to pay hefty fees (unlike many of the customers they bilked out of hard-earned cash.)

Wells has been trying to right himself and move past the scandal. It’s not going great.

Here’s the CFPB’s director, Rohit Chopra, on Tuesday’s settlement:

“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families.”

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

Chopra indicated more fines could be on the way.

In response, Wells Fargo emphasized that the broad-reaching settlement with the CFPB resolves multiple matters, 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 been working on to change and provide customer remediation where warranted,” said Wells Fargo CEO Charlie Scharf, who took the helm in 2019 with a mission to clean up the mess left by his predecessors.

TIME FOR A BREAKUP?

The web of scandals at Wells Fargo is massive, and after six years of fallout, a lot of folks aren’t convinced the bank can save itself.

“This latest litany of lawbreaking cannot be fairly characterized or dismissed as mere ‘mismanagement,’” wrote Dennis Kelleher, CEO of the nonprofit Better Markets, calling for regulators to consider breaking up the bank. “This type of longstanding pattern and practice of illegal Activities are more frequently seen in criminal enterprises, not at gigantic US banks. Any other business in America with such a recidivist record of breaking the law…would almost certainly have already been shut down.”

The breakup idea would likely have support. Senator Elizabeth Warren last year urged the Fed to revoke Wells Fargo’s status as a financial holding company and require it to separate its traditional banking activities from nonbanking activities.

“The only way these consumers and their bank accounts can be kept safe is through another institution—one whose business model is not dependent on swindling customers for every last penny they can get,” Warren wrote in a letter to the central bank.

Twitter’s been a mess for the past two months that it’s been owned by Elon Musk. That’s been good news for its increasingly popular rival. Mastodon counted approximately 300,000 monthly active users in October. As of last month, that figure has shot up to 2.5 million — a more than 730% increase — according to its founder. Mastodon has a similar look to Twitter, and has quickly become the go-to alternative for people who are put off by Musk era of the larger social platform.

Meanwhile, over at Twitter: After a Twitter poll showed a majority of users wanted Elon Musk to step down as CEO, Musk is … changing how polls work.

  • 3M, the conglomerate behind Post-Its and Scotch tape, will stop making “forever chemicals” that are found in hundreds of household items by the end of 2025. Recent science suggests the chemicals are much more hazardous to human health than scientists had initially thought .
  • Per tradition, the United Kingdom will soon put into circulation new banknotes featuring the portrait of the monarch, King Charles III. Here’s what they’ll look like.
  • The European Union has struck a deal with Amazon that will resolve multiple antitrust investigations into the company and impose binding restrictions on its business. It includes a commitment not to use third-party sellers’ data to benefit Amazon’s own marketplace listings, a practice that policymakers around the world say is anticompetitive.

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