Wells Fargo corporate headquarters in San Francisco, CaliforniaWells Fargo fails US bankruptcy test for a second time
The Federal Reserve and Federal Deposit Insurance Corporation said that Bank of America, Bank of New York Mellon, JP Morgan Chase, and State Street, whose living wills were also deemed deficient in April, had now adequately addressed their shortcomings. But Wells Fargo had failed to do so.
Carrie Tolstedt, who at the time headed the community banking division that was ground zero for the scandal was dismissive of the complaints, attributing them to a corporate culture that encouraged valid claims “which are then investigated and appropriately addressed,” the report said. Tolstedt also said the bank’s sales incentive programs were capped at 10% to 20% of bank workers’ total compensation “to keep motivation in check.” Tolstedt no longer works for the bank and has had to give back millions in compensation in connection with her role in the scandal.
Fired Wells Fargo employees say they were made scapegoats in mortgage scheme
A group of fired Wells Fargo Home Mortgage employees are suing the company, saying they were made the scapegoats for an illegal practice encouraged by higher-ups.
The nine employees, who are residents of New Jersey and Pennsylvania, worked as home mortgage consultants for Wells Fargo and were terminated in 2015.
They allege the company violated federal regulations to boost business by obtaining referrals of potential mortgage customers from a real estate title firm and in turn referring its mortgage customers to that title company for closing services. The practice went on from 2009 through 2012, when Wells Fargo was sued.
Rather than end the practice, the company went on to commit the same violations with another title company, Patriot Land Title, which is headquartered in New Jersey, according to the new suit.
The federal Consumer Protection Finance Bureau and the State of Maryland sued Wells Fargo and J.P. Morgan Chase Bank in 2015, alleging the practices violated the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (known as the Dodd-Frank Act).