Wells Fargo’s troubling practices
For years, Wells Fargo created millions of fake accounts for its customers by putting enormous pressure on its employees to increase the number of customer accounts. After the scandal broke, Wells Fargo responded by firing 5,300 of its employees, and its then-CEO resigned. Both the CEO and the Wells Fargo executive who headed the fake accounts unit, however, walked away with millions.
When consumers have risen up and filed class actions for these fraudulent practices, Wells Fargo has added insult to injury by trying to force them to arbitrate their claims, even after being called out by members of Congress.
Wells Fargo has repeatedly been sued for engaging in discriminatory lending practices. On allegations by the U.S. Department of Justice, Wells Fargo agreed to pay $125 million to more than 30,000 borrowers the government had found were steered into subprime mortgages or who paid higher fees and rates than non-Hispanic white borrowers because of their race or national origin. The cities of Sacramento, Philadelphia, Baltimore, Miami and Oakland have sued the bank for discriminatory lending practices.
And what happens when Wells Fargo employees try to do the right thing by their customers and blow the whistle on the bank’s practices? According to a number of lawsuits, Wells Fargo has responded by firing staff. This article, about a former Portland-based Wells Fargo whistleblower, is worth a read: https://www.nytimes.com/2018/03/24/business/wells-fargo-whistleblower-duke-tran.html.
Beyond directly harming consumers and their own employees, however, Wells Fargo has engaged in a breathtaking display of other unfortunate practices that disproportionately impact low-income communities:
* financing projects that exacerbate climate change like the Keystone XL pipeline and oil sands development;
* arranging more financing for gun makers than any other bank; and
* extending hundreds of millions of dollars to for-profit private prison companies.
. . . The Federal Reserve, for one, does not share [this] laissez-faire attitude. In an unprecedented move, it has prevented the bank from growing until it sufficiently improves its governance and controls.
Numerous entities have divested from Wells Fargo. The State of California. The State of Ohio. The cities of Portland, Seattle, Davis and Santa Monica, California. The University of California. The Nez Perce Tribe.
Some of the countless reasons to stop banking with or borrowing from Wells Fargo - the bank with a getaway vehicle in its logo
A friend sent me a letter asking me to add my voice to a call to his employer to divest some of its funds from Wells Fargo bank. Not only am I glad to support the call, I felt more people should know just how reprehensible this institution has become. Excerpts from the letter:
Washington Post personal finance author Michelle Singletary nails it in calling co-signing someone else's student loan "the worst mistake a grandparent can make." She explains why:
When you co-sign for a student loan, you are not the backup borrower. You are on the line for the entire loan balance should your grandchild not pay.
John Gear is a Salem attorney.