Wells Fargo Works to Minimize Legal Trouble
Things haven’t been pretty for Wells Fargo Bank lately. Trouble began in the fall when federal regulators ordered the bank to pay nearly $200 million in fines as a response to the discovery that Wells Fargo employees had secretly created millions of unauthorized bank and credit card accounts without customer approval. This secret account and card opening had been occurring since 2011, tricking customers into paying fines on accounts they didn’t even know they had in their name.
Wells Fargo workers began fighting back against the bank’s less than ethical tactics in a class action lawsuit. Six total workers are seeking $7.2 billion for workers nationwide who were fired or demoted after refusing to open fake accounts for Wells Fargo. The lawsuit began in California but is now open to the country and accuses the banking giant of a “fraudulent scheme” to boost stock prices.
What looms on the horizon for the bank that has replaced its CEO, overhauled branch practices, and suffered scathing criticism around the country? As much as Wells Fargo would like to avoid all process servers in the future, that may not be possible. There are still quite a few legal “shoes” that could drop any time now.
To begin with, the New York, California, and North Carolina justice departments are currently investigating practices at Wells Fargo bank branches in their states to identify any civil or criminal cases. The Attorney Generals for Connecticut, Illinois, and Florida are also monitoring the situation with very careful awareness. Many of those states are also distancing themselves from Wells Fargo and cultivating local relationships with other major banks instead.
Even Wells Fargo’s own board is conducting an internal probe to identify the root of the problems, and CEO Stumpf’s $41 million compensation was revoked. Many people hope that Wells Fargo’s mess inspires other banks to evaluate and adjust their policies and procedures as necessary.