Wells Fargo, Banking Culture and What Could Be Next
Another bank is in the headlines, paying millions of dollars in fines to settle charges of illegal banking practices. This time, it’s Wells Fargo.
According to the Consumer Financial Protection Bureau (CFPB), employees at the bank opened accounts and applied for credit cards in the name of existing customers for years without their consent.
Wells Fargo didn't admit or deny wrongdoing, but it will pay $100 million in fines to the CFPB — the largest penalty the federal agency has ever imposed. It will also pay an extra $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles, according to an CFPB statement.
The fines amount to a bit more than the $124.6 million in stock and options Carrie Tolstedt, the former executive who headed the unit under question, left with when she retired this summer.
Now the bank is reported to be facing investigations by the U.S. Attorneys in New York and California. And CEO John Stumpf is to testify before the Senate banking committee next week.
This week on Money Talking, Rana Foroohar of Time Magazine and Sheelah Kolhatkar of The New Yorker look at what Wells Fargo's behavior says about the country's banking culture and what repercussions there could be for the financial sector.
