“The opaque manner with which the bank continues to do business and the frequency of new disclosures of wanton greed and lack of institutional control makes this decision so clear that there really was no choice at all,” Chiang said.
Chiang added that because of the number of additional “questionable practices” were uncovered in the last year, he was calling on other state agencies to investigate the activities of other lines of Wells Fargo business.
Just recently, the bank, based in ___, agreed to pay $108 million
to the federal government to settle charges that it overcharged military veterans to refinance loans and paid out $80 million for potentially wrongfully force-placing auto insurance on as many as 570,000 customers.
In a letter to bank officials, Chiang outlined the following demands the bank would have to comply with before he would consider lifting the ban:
· Providing written evidence each quarter that it is in full compliance with the terms and conditions of consent orders entered with the Consumer Financial Protection Bureau, the Los Angeles City Attorney and the Office of Comptroller of the Currency. If the bank is out of compliance, it must present a plan of recovery;
· Providing information on the numbers of California consumers harmed, the concentration of those customers by branch location, ZIP code or city, along with the status of efforts to resolve grievances and make them whole;
· Removing four directors who sat on the board during the unfolding of the bogus account scandal;
· Commissioning and funding a study by a respected consumer organization on how financial institutions can better serve Californians, especially the unbanked.
In a statement, Wells Fargo maintained that it had met all of Chiang’s demands.
“Over the past year, we have met and exceeded all of Treasurer Chiang’s expectations, including separation of chief executive and chair positions; expansion of the company’s customer complaint servicing and resolution process; establishment of a dedicated hotline for customers with concerns about their accounts; enhancements to the Ethics Line intake process and expansion of the ‘Raise Your Hand’ initiative to encourage team members to speak up; elimination of product sales goals for retail bankers; and compensation forfeitures and clawbacks that now exceed $180 million.”
“In the meantime, we have continued to serve the State of California, loaning $500 million this year to the Department of Water Resources for critical Oroville Dam repairs and underwriting a total of $800 million bond issuance for the state, the latter which saved the state’s general fund $1.3 million,” the bank added.
“We have served the Treasurer’s Office with distinction and integrity for a decade,” the bank concluded. “We will continue serving the state and rebuilding trust with Californians as we take steps to become a better bank.”