Wells Fargo Will Pay US $3B to Settle List of Abuses

Accounts were opened without customers' consent
By Bob Cronin,  Newser Staff
Posted Feb 21, 2020 4:30 PM CST
Wells Fargo to Pay $3B Over Fake Accounts, Other Scams
Wells Fargo boss John Stumpf testifies on Capitol Hill in Washington in 2016. Stumpf later was replaced as CEO.   (AP Photo/Susan Walsh, File)

Wells Fargo agreed Friday to pay the government $3 billion to settle investigations into a series of abuses that went on for years, including opening accounts for customers without their approval. The deal wraps up federal civil and criminal cases, the Wall Street Journal reports, though criminal charges could be pursued if the bank doesn't stick to its agreement, which includes cooperating with investigations for another three years. Wells Fargo makes a series of admissions in the settlement with the Justice Department and the Securities and Exchange Commission, per the Washington Post. The bank admits to taking millions of dollars in fees through the falsification of records and forging of signatures by thousands of its employees. Personal data of customers was "unlawfully misused," the agreement says, to help the bank reach sales goals—and sometimes to keep the customers from learning about the unauthorized accounts.

"This case illustrates a complete failure of leadership at multiple levels within" the bank, said Nick Hanna, US attorney for central California. "Simply put, Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way." The fine equals about 15% of the bank's profits last year. Wells Fargo is still one of the nation's largest and most profitable banks, but it has been in decline since the scandals surfaced in 2016. It still has issues with regulators; the Federal Reserve has slapped a cap on the bank's growth. Prosecutors said top executives knew of the abuses as far back as 2002. An internal investigation said Wells Fargo's decentralized management structure made it possible for the bosses to avoid doing anything about them. (Wells Fargo has changed CEOs a couple of times during the investigations.)

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