Wells Fargo is one in every of the oldest and strongest banks in the United States. Its fame at this time is in tatters, following a infamous scandal that’s nonetheless unfolding.
Stories of fraudulent exercise in Wells Fargo’s gross sales division first surfaced in 2013. The bank opened not less than 3.5 million fraudulent accounts for unwitting clients, based on researchers at the Harvard Business School. This and different points have led the authorities to tremendous the bank repeatedly.
Regulators for banking, consumer protection, trading, and workplace safety proceed to maintain a detailed watch on Wells Fargo. The bank says it is working to adjust to a barrage of consent orders issued by the authorities courting again to 2016. Along with fines, Wells Fargo has confronted a cap on its property, issued by the Federal Reserve in 2018.
“We continue to hold the firm accountable for its deficiencies with an unprecedented asset cap that will stay in place until the firm has fixed its problems,” Federal Reserve Chairman Jerome Powell instructed reporters at a press convention in late 2021.
The problems at Wells Fargo are nonetheless unfolding. In September hearings earlier than the Home and Senate banking committees, lawmakers singled out Wells Fargo’s latest CEO, Charles Scharf, for his firm’s company governance points. Scharf, a protege of JPMorgan Chase CEO Jamie Dimon, stated he was introduced in to make substantial modifications at the bank. “Seventy percent of our company’s operating committee is new from when I joined,” Scharf stated in his second day of hearings.
Consultants stated the authorities has broad authority to restrict Wells Fargo, given the fame senior administration has earned for imposing demanding enterprise objectives on its workforce. These lofty objectives might have led workers to have interaction in deceitful and at occasions allegedly unlawful habits.
“The fact that a large institution of such importance was nevertheless able to engage in fraud and effectively illegal transactions on such a scale — that is staggering,” stated Saule T. Omarova, a professor at Cornell Legislation Faculty.
In an announcement to CNBC, Wells Fargo stated the bank is revising its administration, danger and management frameworks whereas altering the firm’s tradition and insurance policies. “[T]here’s more work we must do to rebuild trust, and we are committed to doing that work,” the bank stated.
Watch the video to see how the Wells Fargo scandal positions the bank in 2022.
