Wells Fargo Agrees to $1 Billion Fine Over Home and Auto Loan Abuses (reuters.com) 64
Wells Fargo got hit with a $1 billion fine Friday -- the largest ever issued by America's consumer protection agency. An anonymous reader quotes Reuters:
Taken together, the mortgage and auto programs ensnared more than 600,000 customers and will require nearly $300 million in refunds, the bank has said. The programs allowed Wells Fargo to earn fees from unneeded car insurance and penalties on mortgage paperwork that the bank had botched. For homebuyers, Wells Fargo promised to "rate lock" or freeze the interest rate for borrowers who got their mortgage paperwork finished within a few weeks. When that deadline slipped and it was the bank's fault, Wells Fargo could blame the customer. The penalty for late mortgage paperwork often topped $1000, according to a borrower lawsuit...
Drivers stung by insurance fees were wrongly pushed into policies that they did not need... Insurers working for Wells Fargo pushed policies onto more than 500,000 customers who already had coverage, the bank has said.
The penalty comes 18 months after Wells Fargo "admitted it opened sham accounts for customers -- a practice that likely ensnared millions...
Wells Fargo agreed to the new $1 billion fine "without admitting or denying wrongdoing."
Drivers stung by insurance fees were wrongly pushed into policies that they did not need... Insurers working for Wells Fargo pushed policies onto more than 500,000 customers who already had coverage, the bank has said.
The penalty comes 18 months after Wells Fargo "admitted it opened sham accounts for customers -- a practice that likely ensnared millions...
Wells Fargo agreed to the new $1 billion fine "without admitting or denying wrongdoing."
Re: Chan Fargo (Score:1)
And that's just a slap on the wrist (Score:2)
Re:And that's just a slap on the wrist (Score:4, Insightful)
The Consumer Financial Protection Bureau (CFPB) is going to get the death penalty for this.
Yes, and it'll be partisan: only the Republicans will want to kill it.
And now the banking industry is lobbying them heavily saying the problems that caused the financial crisis have been fixed.
I can say with 100% certainty that they haven't.
See, even if every banker has turned into a saint, all you need is some newly minted 26 year-old Harvard MBA who will look around and wonder why isn't any pushing the rules. He'll do so and get a 7 figure bonus. Others will follow and in order to get the big bucks, they'll have to bend the rules. Then as more catch on, they'll have to break the rules to get their bonuses.
We'll end up right where we were.
And add in the illegal collections - especially with student loans (that loan forgiveness after 10 years for certain professions? Yeah, right - Thanks DeVos!!)
The CFPB is the best thing that our government has done in decades for us little people and the fact that the Republicans - and it's ONLY the Republicans - want to get rid of it should tell us something about their values and priorities.
Re: (Score:1)
Who the fuck was President in 2005?
Re: (Score:1)
Except Washington DC.
Re: (Score:3)
First of all, Houston is NOT "crime-rotted". In fact, it has a lower crime rate than Anchorage, Alaska. It's one of the safest big cities in America.
Second, Houston is most definitely run by Democrats. It's an extremely liberal city. They had the first openly lesbian mayor of any city in the US and currently has Democrats in all leadership positions.
Re: (Score:1)
Once again a slap on the wrist.. (Score:1)
..for a company with a $250B market cap.
But I guess when I get pulled over speeding it only costs me $1000, compared to my $300k salary, that's peanuts and the last time I was caught was 10 years ago.
THIS IS AMERICA, THEREFORE THIS IS NORMAL AND NOT SOMETHING THAT YOU SHOULD FROTH AT THE MOUTH ABOUT
Re: (Score:1)
Mistakes were made (Score:4, Funny)
Re:Mistakes were made (Score:5, Informative)
Yes, you can. The prosecution of corporations for crimes was established in 1909, in a case called, New York Central and Hudson River Railroad Co. v. United States.
The Arthur Anderson company learned about this first-hand back in 2002.
Re:Execs should be in jail (Score:5, Insightful)
Fine the execs. Until the execs lose their homes & their daughters have to give up their ponys they will not change their behaviour.
Re: (Score:3)
Execs have no legal protection just because they worked for a corporation - not just fines, but prison. The thing is, you have to actually prove they were involved, or at least knew what was going on.
Large fines (and large liability awards) are the criminal justice system for corporations. Those can be assessed without finding an individual manager to blame - just that the company as a whole knew there was a problem and ignored it, or deliberately put people at risk for profit.
All the legal mechanisms are
Corporate "Justice".. (Score:5, Interesting)
Let's see...
Yep, corporations have it so tough in America.. let's give them another tax break to make up for treating them like this eh?
Re: (Score:2)
"Corporation pays $1 Billion off profits well in excess of that from this crime" and "Corporation does not have to help or settle with individual consumers who's car loans and credit scores were damaged by their actions" both seem to conflict with the bit in the summary (and article ) about $300 million in refunds.
Unless the refunds are less than what the customers were ripped off of course, in which case it might conflict with the first (though you didn't provide any support for your claim that they made o
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Let's guess the next headline somewhere in the future. Well Fargo to pay $300 million dollar fine for not paying refunds. After it was exposed that they purposefully obscured and obstructed the refund system and routinely defined refunds, blah, blah, blah. You just know that and they will hatch another scheme or use lobbyists to deregulate so what they got fined for will soon be legal?!? and then they wont get fined for doing the exact same thing again. Don't expect any change in behaviour until the board a
Just curious.... (Score:2)
Does anyone know where the $1B is going to land after it's paid? Just cuirous.
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According to an AP article written by Ken Sweet, and published this morning in the South Florida Sun-Sentinel (pg 7B), $500 Million will be paid to the Office of the Comptroller of the Currency, and $500 Million will be paid to the Consumer Financial Protection Bureau.
How much of that will actually trickle into the United States Treasury is not discussed.
The article concludes with, "The nation's third-largest bank now says it made $4.7 billion in the first 90 days of the year, down from $5.46 billion in the
Voting with my job. They need security ppl, too ba (Score:3)
> So, hopefully, everyone will "vote with their wallet" on this debacle.
Wells Fargo is offering high salaries for experienced computer security professionals, but because we're currently in high demand we are quite free to choose which companies we accept interviews with. Who wants to work for a bunch of scumbags, in a toxic corporate culture? Not I, and not any of the security professionals O talk to.
Re: (Score:2)
It could pay for a portion of the expenses accrued by Trump's security detail as well as the travel and furniture for his cabinet members.
If Wells Fargo Agrees (Score:4, Insightful)
Numbers so big they make me numb (Score:2)
I didn't see how much money WF actually stole from some number of their customers, or a real number of how many were affected.
If it's 600,000, that's less than a fine of $2 a customer.
Later in the summary, it mentions millions of customers.
I wish I had enough money to rob people of god knows how much money, and pay what is probably a VERY small fraction as a fine, with no charges. It seems like a very viable business strategy.
Re: (Score:2)
> If it's 600,000, that's less than a fine of $2 a customer.
Math is hard I guess.
> Later in the summary, it mentions millions of customers.
Reading is hard too I guess.(Yes it does mention millions, but plainly states that is for a different wells fargo rip off - who on earth banks with this company still?!?)
Not enough (Score:5, Interesting)
At the very least, the fine should be triple the profits of their unlawful behavior. Optimally, the bank should be broken up and the pieces sold off. At some point a business can not be allowed to remain in business. Wells Fargo was well past that point.
bailout (Score:2)
I am still waiting for the banks to repay the public for the hundreds of billions of tax dollars spent in "the bailout."
https://en.wikipedia.org/wiki/... [wikipedia.org]
Like that is going to happen.
https://www.youtube.com/watch?... [youtube.com]
agrees to fines? (Score:2)
Re: (Score:2)
It's worse. For the peons, it's "You're guilty. Go to jail. Go directly to jail. NOW!". Followed by "Now that you have no job and no prospect of a job, pay everything back with interest and penalties or go back to jail".
For corporations it's "please agree to this fine without an admission of guilt. Pay when convenient". And the fine is less than they stole.
shut it down (Score:2)
So do consumers get any of that cash? (Score:1)
My dealer obtained auto loan was sold to Wells Fargo. Seemed like every 6 months when my state farm insurance renewed, I'd get a call about the bank wanting to add insurance to my loan costs. The calls were very threatening, even though I could document my coverage never lapsed.
I'm now wondering if they added hidden charges to my loan.
Criminal Organization needs RICO charge (Score:3)
Uh oh (Score:2)