Fed freezes Wells Fargo expansion for “persistent misconduct”

The Federal Reserve (Fed) today froze the expansion of the banking giant Wells Fargo until it improves its management, after noting a “generalized and persistent misconduct”.

“Until the firm makes sufficient improvements, it is restricted from growing above its total assets by the end of 2017,” the Fed said in a statement.

The Fed decision came two years after the scandal of the false accounts that Wells Fargo employees opened without the authorization or knowledge of their clients to comply with the commercial objectives set.

Wells Fargo has admitted that this was a widespread practice in the bank between 2009 and 2016 that reached the figure of 3.5 million false accounts and lines of credit, so it decided to dismiss 5,300 of its employees.

Wells Fargo has already paid $ 185 million in fines for that practice and another 142 to settle a class action lawsuit.

The scandal also provoked in October 2016 the resignation of its then CEO, John Stumpf, replaced by Tim Sloan.

In its statement today, the Fed said that Wells Fargo prioritized its growth to effective risk management.

“The steps we take today will ensure that Wells Fargo does not expand until it is able to do so safely and with the necessary protections to manage all of its risks and protect its customers,” said Fed Chair Janet Yellen.

Wells Fargo will replace three members of its board of directors in April and a quarter by the end of 2018 in compliance with the actions taken by the Fed, the same regulator announced.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest

More than half a million Haitian children at risk from waterborne diseases

UNICEF raises its request for aid after the earthquake to € 61.7 million Some 540,000 children affected by the earthquake that struck southwestern Haiti on...

Hundreds of Venezuelans protest surrounded by Mexicans who support Maduro

Hundreds of Venezuelans demonstrated today in Mexico City against the election of the National Constituent Assembly of their country, surrounded by militants of Mexican...

Technology leaders protest against discriminatory laws in companies

Fourteen technology leaders expressed "firm opposition" to the passage of discriminatory legislation in the state of Texas and, generally, in the United States, because...

The US Congress puts an end to the administrative closure after 3 days of tension

The US Congress ended today the administrative partial closure that federal agencies have been facing for three days, after failing to reach a budget...

FusionFest Opens Call to Performers, Artists, Vendors & Volunteers

Through August 1, 2019, FusionFest.org is issuing a call for performers, artists, vendors and volunteers to register their “Intent to Participate” in the second...