Tag: Wells Fargo News

Wells Fargo Fined $3.7 Billion in Widespread Illegal Activities

Market News: Wells Fargo fined $3.7 billion in widespread illegal activities.
Business News: Wells Fargo fined $3.7 billion in widespread illegal activities.

[ZeroHedge] Wells Fargo has been ordered to pay $3.7 billion by the Consumer Financial Protection Bureau (CFPB) for a variety of illegal activity, including wrongfully foreclosing on homes, illegally repossessing vehicles, incorrectly assessing fees and interest, and charging surprise overdraft fees.

The settlement, which includes the largest fine ever imposed by the Consumer Financial Protection Bureau, allows the bank to resolve claims that it had harmed millions of consumers since 2011.

Wells Fargo’s yearslong mistreatment of its customers has resulted in another record-breaking fine and a warning that more restrictions on its ability to do business could soon follow, per The New York Times.

On Tuesday, the bank agreed to pay $1.7 billion in penalties and another $2 billion in damages to settle claims that it engaged in an array of banking violations over the last decade that harmed millions of consumers, the Consumer Financial Protection Bureau said.

The latest developments contribute to a picture, years in the making, of Wells Fargo as one of America’s worst-run big banks.

For decades, the 170-year-old bank has struggled to fix its practices despite run-ins with regulators, even as employees and customers continued to identify new problems.

The consumer protection bureau said Wells Fargo did not record customer payments on home and auto loans properly, wrongfully repossessed some borrowers’ cars and homes and charged overdraft fees even when customers had enough money to cover purchases they made with their bank cards.

Wells Fargo stopped the conduct this year as part of a larger effort to clean up other unlawful practices stretching back to 2011, the filing said.

Wells Fargo Criticism

Wells Fargo News Today.
Wells Fargo News Today.

The fine is the largest ever imposed by the regulator, breaking a previous record of $1 billion, also set by an action against Wells Fargo.

It brings the total penalties the government has levied against the bank for mistreating customers and investors to $6.2 billion since 2016 and almost $20 billion since the financial crisis.

The settlement is the latest development in a series of a crises that led to the ouster of two of the bank’s previous chief executives, John G. Stumpf in 2016 and Timothy Sloan in 2019.

Mr. Sloan took the top post to help clean up the bank’s reputation, which was reeling from self-inflicted scandals, but he became a lightning rod for criticism and was replaced after three years on the job by Charles W. Scharf.

The consumer protection bureau’s director, Rohit Chopra, told reporters on Tuesday that the action against the bank “should not be read as a sign that Wells Fargo has moved past its longstanding problems or that the C.F.P.B.’s work here is done.”

As part of its settlement with the regulator, Wells Fargo has begun repaying customers, returning improperly charged fees and offering some financial relief to those whose finances and credit ratings were hurt by the bank’s practices.

Related: Bank of America Expects a Recession by Q1 of 2023

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Source(s): ZeroHedge, The New York Times

Bank of America Expects a Recession by Q1 of 2023

Market News: Bank of America and Wells Fargo CEO expect a recession in 2023.
Market News: Bank of America and Wells Fargo CEO expect a recession in 2023.

Bank of America is expecting a recession to hit the U.S by the first quarter of 2023.

There is a major slowdown happening says CEO Brian Moynihan.

Economists are now expecting a volatile market to persist in 2023.

A recession may be coming in the first quarter of 2023, according to forecasts by Bank of America (BofA) economists.

“A recession is very likely in the U.S.,” BoFa wrote in its Year Ahead 2023 report. The bank points out that this recession can last through the third quarter of 2023.

There’s no official definition of a recession, but many economists define it as a period of two consecutive quarters of negative economic growth or gross domestic product (GDP) decline – a drop that’s already been seen in 2022, says FOX Business.

But many Americans already believe the U.S. is already in a recession.

More than half or 56% of Americans believe the country is in a recession, according to a recent poll by YouGovAmerica and The Economist. 

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Major Slowdown in Economy Points Towards a Recession

Recession News: Bank of America expects a recession in 2023.
Recession News: Bank of America expects a recession in 2023.

While retail payments surged 11% so far this year to nearly $4 trillion, that increase obscures a slowdown that began in recent weeks: November spending rose just 5%, Bank of America’s CEO Brian Moynihan said.

Even Wells Fargo CEO Charlie Scharf is saying, “there is a slowdown happening, there is no question about it. We are expecting a fairly weak economy throughout the entire year.”

American consumers are tapping the brakes on spending as the Federal Reserve’s interest rate increases reverberate throughout the economy, according to the CEOs of two of the largest American banks.

After two years of pandemic-fueled, double-digit growth in Bank of America card volume, the rate of growth is slowing.

Still, the downturn isn’t being felt equally across all retail customers and businesses, Wells Fargo’s CEO said.

Both Wells Fargo and Bank of America CEOs expect a recession by Q1 of 2023 and expect some sort of light at the end of the tunnel by Q4.

The implications of a recession end up affecting majority of the U.S. economy as corporations and businesses struggle to yield market capital in slow-growth conditions.

Wages are affected, unemployment skyrockets, and the banks get left with massive debt when Americans can no longer afford to pay their credit card bills or mortgages.

Do you think we will officially enter a recession in the beginning of 2023?

Leave your thoughts below.

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Source(s): FOX Business, CNBC.

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