Another billion-dollar fine was paid by one of the largest American banks for mistreating its clients.
In the midst of the FTX drama’s hot news cycle, Ripple CEO Brad Garlinghouse wanted to draw attention to another incident involving traditional finance’s wrongdoings. According to Garlinghouse, a $3.7 billion fine for Wells Fargo bank’s negligence was “barely a blip on the radar.”
The CEO of Ripple highlighted his concern about the paucity of media coverage of the Wells Fargo issue in a tweet on December 21:
The world is (appropriately) outraged by SBF and FTX's fraud, but when Wells Fargo mismanages billions in customer funds as well, it's barely a blip on the radar. Food for thought…. pic.twitter.com/uHnumn4Ryi
— Brad Garlinghouse (@bgarlinghouse) December 21, 2022
Consumer Financial Protection Bureau :
The United States Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo to pay $1.7 billion in civil penalties and more than $2 billion in consumer redress on December 20. The CFPB claims that the bank’s actions caused its clients to suffer financial losses amounting to billions of dollars and, in the case of thousands of clients, the loss of their homes and automobiles.
Wells Fargo routinely charged its customer’s inaccurate fees and interest rates on auto and home loans, illegal surprise overdraft fees, and incorrect charges to checking and savings accounts over the course of several years. In this situation, 16 million subscribers are impacted.
Director of the CFPB Rohit Chopra stated in his statement:
“Millions of American families have suffered because of Wells Fargo’s rinse-repeat pattern of breaking the law. Wells Fargo has been ordered by the CFPB to repay billions of dollars to customers nationwide. This is a crucial first step towards this repeat offender’s accountability and long-term change.
One of the biggest banks in America with a capitalization of $156,6 billion has broken the law and injured clients before. This time wasn’t the first. It received a $185 million fine from the CFPB in 2016 for opening many fake savings accounts on behalf of its customers without getting their permission. Wells Fargo committed to paying $3 billion by 2020 to settle any potential legal problems it might have caused, both criminal and civil.
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