California Levies Year-Long Sanctions on Wells Fargo
The California State Treasurer today took strong actions against Wells Fargo for the bank allegedly opening millions of accounts without customers’ permission.
In a letter to the Wells Fargo Board, State Treasurer John Chiang suspended certain banking relationships with the institution for the next 12 months.
California will not use the San Francisco-based bank as an underwriter for California state bonds, will not utilize Wells Fargo as a broker in the purchase of stocks and bonds, and will not invest in Wells Fargo securities.
“The recent discovery that Wells Fargo & Company fleeced its customers by opening fraudulent accounts for the purpose of extracting millions in illegal fees demonstrates, at best, a reckless lack of institutional control, and, at worst, a culture which actively promotes wanton greed,” Chaing wrote in his letter to the Wells Fargo Board.
On September 8, the Consumer Financial Protection Bureau fined Wells Fargo $185 million after investigations revealed that employees had opened millions of fake accounts under customer names. The bank fired nearly 5,300 employees for their involvement with these accounts.
Wells Fargo employees were compensated for getting existing customers to sign up for new deposit accounts, credit cards, debit cards and online banking. To take advantage of these perks and meet sales targets, the CFPB said Wells Fargo employees illegally enrolled customers in additional services without the customer’s knowledge or consent.