The Wells Fargo fake account scandal has resulted in more fallout for the beleaguered bank — this time, with Illinois announcing a ban on bond and investment work with Wells Fargo. Meanwhile, the Chicago City Council is gearing up to consider a moratorium on doing any bond-related business with Wells Fargo as well.
According to a report, Illinois Governor Bruce Rauner’s administration said it won’t include Wells Fargo until further notice. “The Rauner administration has not done any bond business with Wells Fargo to date, and the administration previously chose not to do business with Wells Fargo on the current bond deal that is in progress,” an administration source said, according to the report. Wells Fargo Securities was in the state’s past pool and was senior manager on a $750 million state general obligation bond sale in May 2014, the report noted.
Meanwhile, earlier this week, Illinois State Treasurer Michael Frerichs reportedly announced a one-year moratorium on his office’s use of Wells Fargo as broker-dealer for short-term investment activities and a suspension of investments in all Wells Fargo debt securities. “We will not reward companies that irresponsibly open new bank accounts and improperly repossess vehicles of members of our armed forces,” he was reported as saying. After a one-year ban, the office will review the corporate governance of Wells Fargo to ensure it put in sufficient internal controls to avoid any future problems, such as the scandal that is rocking the financial company.
It’s not only states that are looking to hold Wells Fargo accountable for its bad behavior. Democratic U.S. presidential candidate Hillary Clinton promised that Wells Fargo will be held accountable for its recent scandal and what she described as the bank’s “egregious corporate behavior.”
“Really shocking, isn’t it? One of the nation’s biggest banks bullying thousands of employees into committing fraud against unsuspecting customers,” Clinton recently told a crowd in Ohio, adding that she wants to “send a clear message to every boardroom and executive suite” that companies should be held responsible for scamming customers, exploiting employees or ripping off taxpayers. Reuters reported on Monday (Oct. 3) that Clinton said that behavior such as the financial institution’s scandal — where the bank opened some 2 million accounts without customers’ approval or knowledge, all to hit sales targets — is harmful to consumers.