Category Archives: Wells Fargo

Federal Reserve Consent Order Represents Worst Case Scenario for Wells Fargo Directors

By | February 6, 2018

Janet Yellen ended her tenure as Chair of the Federal Reserve with a bang last Friday when the Federal Reserve Board (the Board) voted 3-0 to issue a consent cease and desist order that imposes unprecedented sanctions on Wells Fargo for its phony-accounts scandal and other “widespread consumer abuses.” The primary sanction is a restriction… Read More »

Wells Fargo is Broken Beyond Repair

By | September 2, 2017

After the Wells Fargo sales-practices scandal erupted last September, I wrote an article that began: Having spent five years supervising large financial institutions on Wall Street, I am rarely surprised by the latest news of banks behaving badly. But even the most hardened cynics, such as myself, were taken aback by the recent announcement that… Read More »

Wells Fargo Unauthorized Account Openings: A Case Study for Bank Board Directors

By | April 26, 2017

Courtesy of Joseph A. Smith Jr. and Lee Reiners This case study draws primarily – and in some instances quotes verbatim –  from the 113 page report of the Wells Fargo board’s independent investigation of retail banking sales practices.  The case study also relies on the Office of the Comptroller of the Currency’s report titled:… Read More »

How Wells Fargo Illustrates the Failure of the CFPB Class Action Waiver Rule

By | November 23, 2016

Courtesy of Barret Jackson Nye and Lee Reiners The scandal at Wells Fargo has placed big banks’ use of forced arbitration clauses under the microscope. When then Wells Fargo CEO John Stumpf testified in front of the Senate Banking Committee shortly after the scandal broke, he was asked by Senator Sherrod Brown (D-Ohio) whether his… Read More »

New Regulation Aims to Make Banking Fraud Less Lucrative

By | November 10, 2016

Carrie Tolstedt, the former head of Wells Fargo’s community banking division, was required to forfeit $19 million in compensation after the company came under intense public scrutiny for opening over 2 million unauthorized customer accounts. From 2011 to 2016, while the bank was firing over 5,000 low-level branch employees for engaging in this fraud, it… Read More »

Using Living Wills to Break up Big Banks

By | October 11, 2016

One of the key areas of focus during Wells Fargo CEO John Stumpf’s recent congressional testimony, was the timeline of events that led up to him becoming aware of the problems within the company’s community banking division.  Despite the fact that the firm fired over 1,000 employees in 2011 for opening unauthorized customer accounts, and… Read More »