Call me crass, but I wasn’t shocked to learn last week that Wells Fargo & Company (WFC) had agreed to pay a $575 million fine to settle claims by all 50 states related to bogus account openings and forcing unneeded insurance policies on consumers with auto loans. That’s on top of the $1 billion fine the bank paid federal regulators last April for the same conduct.
Paying hefty fines for its outrageous practices is
nothing new for WFC. In September 2016, the shelled out $185 million in
fines and penalties when regulators discovered it had opened at least
1.5 million sham accounts and applied for 565,000 credit cards without
permission of the customers that held them. That same month, the bank
paid $24 million to settle claims that it had illegally repossessed the
cars of military service members. And in April 2017, WFC disbursed $108
million to settle claims that it had overcharged veterans to refinance
loans.
Then last August, the bank was fined $2.1 billion for
issuing “liar mortgages” it knew were based on falsified income
information in the leadup to the financial crisis of 2007 to 2008.
Oh, and a few weeks ago, we learned that WFC had
erroneously denied 870 mortgage modification requests, leading to more
than 500 foreclosures. Some of the people affected by the glitch
literally became homeless.
Will the bank be punished for its latest mistake?
Sure, but it’s likely to be a mere slap on the wrist that will give it
no incentive whatsoever to clean up its act. After all, WFC’s net income
in 2017 came to $22.18 billion, and the indications are the bank’s
income will be even higher for 2018. To WFC, the fines it pays for
misconduct are simply a cost of doing business.
The penalties WFC pays might even be tax-deductible.
For instance, JPMorgan-Chase was able to deduct $11 billion of the $13
billion it paid in 2013 for its role in the sale of high-risk mortgages
prior to the 2007 to 2008 financial crisis............http://www.silverbearcafe.com/private/01.19/banksters.html
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