Wells Fargo’s woes, which began in earnest in 2016 when a scandal involving millions of fake accounts created to boost numbers came to light, are continuing and don’t show any signs of abating any time soon, according to a report by Reuters.
The financial institution has had accumulated more than $4 billion in penalties since the scandal broke, but it’s also dealing with a number of other issues.
For example, a slew of federal organizations is conducting probes into the bank and its behavior. The Department of Justice is investigating if executives kept important details about the fake accounts from the bank’s board of directors, as well as the Office of the Comptroller of the Currency (OCC).
The U.S. Securities and Exchange Commission (SEC) is looking into whether the bank lied to investors by artificially inflating its performance metrics, as well as whether it punished whistleblowers.
In addition, the Department of Labor is looking into the bank over how it reacted to whistleblower complaints.
The bank has also been compelled to operate under about 14 consent orders from regulators like the OCC, SEC, and the Consumer Financial Protection Bureau. The orders force the bank to undergo serious scrutiny of its practices until it shows it has repaired its procedures that allowed the scandal to happen in the first place. Wells Fargo also has to repay customers for what it cost them by abusing some of them. The bank has paid out tens of millions so far.
The U.S. Federal Reserve placed a consent order on the bank in the form of an asset cap, putting a growth restriction on the bank until it shows that its processes have been completely overhauled. The asset cap was announced in 2018, and there’s no timeline in place for when it will be removed.
Also, the bank’s Community Reinvestment Act (CRA) rating was lowered from “Outstanding” to “Needs To Improve” as well, which has implications for its growth.
