In a letter to Fed Chairman Jerome Powell, Warren noted that widespread corruption within the scandal-plagued bank poses “substantial risks” to both consumers and the financial system, and asked that the Fed revoke Wells Fargo’s status as a financial holding company and require the company to disunite its traditional banking activities from its other financial activities.
I indite to urge the Federal Reserve Board of Governors to take immediate action in replication to the reiterated, perpetual, and inexcusable failure of Wells Fargo & Company to eliminate abusive and unlawful practices that have cost consumers hundreds of millions of dollars,
Warren wrote.The Fed, under the leadership of Janet Yellen, placed Wells Fargo under an asset cap of below $1.95 trillion in 2018 until it had amended its governance and imperil controls following widespread consumer abuses and other compliance breakdowns.
It came after the financial accommodation was found to have made millions by creating fake accounts for customers without their erudition, on some occasions even charging nonessential fees. Warren noted that multiple revelations had surfaced regarding Wells Fargo’s “unethical and anti-consumer conduct” even since the cap was put in place, and urged the Fed to take action to forfend consumers.
These incipient revelations have once again made clear that perpetuating to sanction this giant bank with a broken culture to conduct business in its current form poses substantial risks to consumers and the financial system,
For this reason, the Fed should utilize its longstanding ascendancy under the Bank Holding Company Act to revoke Wells Fargo’s status as a financial holding company (FHC) and require that it separate its bank subsidiary from its other financial activities.“Wells Fargo is an irredeemable reiterate offender; the Fed must act,” she integrated. Last week, regulators at the Office of the Comptroller of the Currency (OCC), the banking regulator within the Treasury Department, fined Wells Fargo $250 million for being too gradual to compensate victims harmed by the bank’s antecedent abusive practices regarding mortgage lending.
Despite this and the firm assets cap imposed by regulators, Warren noted that Wells Fargo is “actively working to expand its investment bank,” and is conducting “risky activities” such as lending to hedge funds “looking to ramp up bets” which she verbalized could potentially lead to set more losses among customers.
Every single day that Wells Fargo perpetuates to maintain these depository accounts is a day that millions of customers remain in peril of adscititious negligence and wilful fraud, Warren continued.
The only way these consumers and their bank accounts can be kept safe is through another institution—one whose business model is not dependent on swindling customers for every last penny they can get. The Fed has the puissance to put consumers first, and it must utilize it,
By invoking its full ascendancy to bulwark consumers and the financial system and requiring Wells Fargo to disunite its consumer-facing banking arm from the rest of its financial activities, the Fed can ascertain that Wells Fargo faces congruous consequences for its longstanding ungovernable demeanor.While Wells Fargo did not directly respond to Warren’s letter, the banking accommodation did relinquish a verbalization on Tuesday saying it is committed to accommodating customers with “the highest standards.”
We are a different bank today than we were five years ago because we’ve made consequential progress, the bank verbalized afore sharing a list of transmutes it had made in order to engender “greater oversight and transparency.”
The bank also noted it had made paramount progress in minimizing the total number of customer remediations we have to consummate and in expediting remediation payments to our customers.
Source: You can read the original Epoch Times article here.