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Monday, January 30, 2023

Elizabeth War London urges the Fed to split Wells Fargo

Senator Elizabeth Warren (D-Mass.) unanimously trusted the Federal Reserve this week, urging them to split Wells Fargo and take “immediate action” on its “immoral and anti-consumer behavior.”

In a letter to Federal Reserve Chairman Jerome Powell, Warren pointed out that corruption in this scandal-stricken bank posed a “significant risk” to consumers and the financial system, and asked the Fed to withdraw rich countries. The bank’s status as a financial holding company requires the company to separate its traditional banking business from other financial businesses.

Warren wrote: “I am writing to urge the Federal Reserve Board to take immediate action in response to Wells Fargo’s repeated, sustained and unforgivable failure to eliminate abuse and illegal behavior that cost consumers hundreds of millions of dollars.”.

Under the leadership of Janet Yellen, the Fed put Wells Fargo’s asset cap below $1.95 trillion in 2018 until it improved after widespread consumer abuse and other compliance issues Governance and risk control.

Previously, the financial service was found to have made millions of dollars by creating fake accounts for customers without their knowledge, and in some cases even charged unnecessary fees.

Warren pointed out that although the upper limit is in place, many revelations about Wells Fargo’s “unethical and anti-consumer behavior” have surfaced, and urged the Federal Reserve to take action to protect consumers.

Warren writes: “These new revelations once again show that continuing to allow this large, culturally fragmented bank to conduct business in its current form will bring huge risks to consumers and the financial system.”

“For this reason, the Federal Reserve should use its long-term power under the Bank Holding Company Act to revoke Wells Fargo’s status as a financial holding company (FHC) and require it to separate its bank subsidiaries from other financial activities.”

“Wells Fargo is an incurable felon; the Fed must act,” she added.

Last week, the supervisory agency of the Office of the Comptroller of Currency (OCC), the banking supervisory agency within the Ministry of Finance, imposed a fine of $250 million on Wells Fargo Bank for compensation for damages suffered by the bank for its previous mortgage abuses. The victims are slow to act.

On March 17, 2020, a woman walks by Wells Fargo Bank in New York City. (Jeenah Moon/Reuters)

Nevertheless, as well as the company’s asset limit set by the regulator, Warren pointed out that Wells Fargo “is actively working to expand its investment banking business” and is carrying out “risk activities” such as providing loans to hedge funds that “hope to increase their bets” . May cause customers to suffer more losses.

“Every day Wells Fargo continues to maintain these deposit accounts is a day when millions of customers still face the risk of additional negligence and deliberate fraud,” Warren continued.

“The only way to ensure the safety of these consumers and their bank accounts is through another institution whose business model does not rely on defrauding every penny from customers. The Federal Reserve has the right to put consumers first and must use it,” she says.

“By exercising full powers to protect consumers and the financial system, and requiring Wells Fargo to separate its consumer-facing banking sector from other financial activities, the Fed can ensure that Wells Fargo faces appropriate consequences for its long-term uncontrollable behavior.”

Although Wells Fargo did not directly respond to Warren’s letter, the banking services department did issue a statement on Tuesday stating that it is committed to serving customers with “the highest standards”.

“We are a different bank today than five years ago because we have made significant progress,” the bank said before sharing its list of changes to create “greater supervision and transparency.”

The bank also noted that it “has made significant progress in reducing the total number of customer remediations that we must complete and speeding up payment of remedial measures to customers.”

Catabella Roberts

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This News Originally From – The Epoch Times

World Nation News Desk
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