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September 09, 2016
Berger: Wells Fargo shows the CU difference
NAFCU President and CEO Dan Berger called last week's news about Wells Fargo "flat-out fraud" and said the scandal highlights what is different about credit unions.
Wells Fargo on Thursday was ordered to pay a total of $185 million – including a $100 million fine from CFPB, the largest fine set ever by the bureau – for allegedly secretly opening unauthorized deposit and credit card accounts for consumers to boost sales figures.
"Wells Fargo's illegal sales practices are an egregious violation of consumer trust," Berger said. "To open more than 1.5 million likely unauthorized consumer deposit accounts and more than 500,000 credit card accounts is despicable, and it's flat-out fraud. Someone needs to go to prison," said Berger. "To put an end to this type of behavior, there has to be personal accountability. Consumers deserve better; our country deserves better. Did the banks not learn anything from the financial crisis they caused?"
"Credit unions – not-for-profit, member-owned financial institutions – have their members' best interests at heart," he continued. "By contrast, Big Banks and Wall Street banks are clearly driven by their shareholders' interests at any cost. The flagrant disregard exhibited by Wells Fargo for their customers' trust confirms that."
Under last week's actions, Wells Fargo is also being ordered to pay restitution to the victims, to pay $50 million to the city and county of Los Angeles and to pay $35 million to the Office of the Comptroller of the Currency. The $100 million CFPB fine will go to the bureau's Civil Penalty Fund.
Wells Fargo has also fired 5,300 employees involved in the offending behavior, according to the consent order.
CFPB said thousands of bank employees opened more than 2 million deposit and credit card accounts without permission in order to collect fees and other charges.
In related news, Federal Reserve Board Gov. Daniel Tarullo on Friday said individuals responsible for banks' inappropriate actions should be held responsible in addition to banks paying fines.
Wells Fargo on Thursday was ordered to pay a total of $185 million – including a $100 million fine from CFPB, the largest fine set ever by the bureau – for allegedly secretly opening unauthorized deposit and credit card accounts for consumers to boost sales figures.
"Wells Fargo's illegal sales practices are an egregious violation of consumer trust," Berger said. "To open more than 1.5 million likely unauthorized consumer deposit accounts and more than 500,000 credit card accounts is despicable, and it's flat-out fraud. Someone needs to go to prison," said Berger. "To put an end to this type of behavior, there has to be personal accountability. Consumers deserve better; our country deserves better. Did the banks not learn anything from the financial crisis they caused?"
"Credit unions – not-for-profit, member-owned financial institutions – have their members' best interests at heart," he continued. "By contrast, Big Banks and Wall Street banks are clearly driven by their shareholders' interests at any cost. The flagrant disregard exhibited by Wells Fargo for their customers' trust confirms that."
Under last week's actions, Wells Fargo is also being ordered to pay restitution to the victims, to pay $50 million to the city and county of Los Angeles and to pay $35 million to the Office of the Comptroller of the Currency. The $100 million CFPB fine will go to the bureau's Civil Penalty Fund.
Wells Fargo has also fired 5,300 employees involved in the offending behavior, according to the consent order.
CFPB said thousands of bank employees opened more than 2 million deposit and credit card accounts without permission in order to collect fees and other charges.
In related news, Federal Reserve Board Gov. Daniel Tarullo on Friday said individuals responsible for banks' inappropriate actions should be held responsible in addition to banks paying fines.
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