FEDERAL RESERVE PUNISHES WELLS FARGO OVER “WIDESPREAD CONSUMER ABUSES”
Wells Fargo finds themselves in the news for all of the wrong reasons once again. Just a few weeks ago Wells Fargo was big news over reported double charges to its customers debit cards that sent the balances to some of the banks customers into negative territory and triggered overdraft fees. Tonight Wells Fargo is back in the spotlight once again.
CNN Money (@CNNMoney) reports, The Fed handed down unprecedented punishment late Friday for what it called the bank’s “widespread consumer abuses,” including its notorious creation of millions of fake customer accounts.
Wells Fargo won’t be allowed to get any bigger than it was last year. That’s around $2 trillion in assets. Until the Fed is satisfied that Wells Fargo has cleaned up their act, $2 trillion in assets is where Wells Fargo must remain. Under pressure from the Fed, the bank agreed to remove three people from the board of directors by April and a fourth by the end of the year.
“We cannot tolerate pervasive and persistent misconduct at any bank” outgoing Fed chairwoman Janet Yeldon said in a statement.
According to Fed data, Wells Fargo controls more money than any bank in the United States besides JP Morgan Chase. The bank has been hit with charge after charge of misconduct allegations in the past year.
In case you were unaware, preventing actions like these from big companies is what regulations are all about. Without regulations, companies are allowed to rob their customers blind for as long as they wish. Big companies love an industry without regulations. It allows them to do their dirt without any worry of consequence or repercussions. The multiple regulation cuts had a direct affect on the boom in the stock market before the market began to take a downturn at the beginning of this week.