Washington State to Get $16 Million from Wells Fargo
Wells Fargo bank will pay $575 million in a settlement with many states over the allegation of improper practices in banking operation.
The settlement will be with all the 50 states and District Columbia for the deceitful sales practices incurred from 2002 to 2017. The Washington State will get $16 million as its share from the $575 million.
The bank was alleged to open bank accounts, issue credit cards, link insurance policies and charge improper mortgage rates without the consent and knowledge of its consumers. It is reported that the bank has been forcing insurance policies to its auto lending consumers.
The biggest payment will be going to the California State where the bank is based at. It will be paying $149 million to California.
As per a report, Wells Fargo expenditure has been increased owing to fines and legal settlements. The bank has allegedly opened 3.5 million bogus accounts without the consent of the customers. The reason for this to have happened is unrealistic targets given to employees. The bank also has a policy of job loss and career stagnation in case of inability to achieve of sales target.
California Attorney General Xavier Becerra said that the customers of Wells Fargo had entrusted their wealth with the bank, instead of providing service the bank had played with the emotions of the customers by selling unnecessary products to the consumers.
This settlement tells us the importance of state regulation over the organizations of such importance. Though we have deregulated the banks, the financial supervision is needed as it is one of the most important factors of the economy. The states were now reluctant to sit only on the trust of federal agencies, so states may in future have some kind of regulations on the financial market.
The bank said that it had already set aside $400 million for the settlement and the rest will be provided after the fourth quarter results.
The CEO of the bank Tim Sloan said that he had taken strong cognizance of the whole episode, and would ensure no such things happen in the future.
This year has been an expensive one for the bank. It would pay $1 billion to the federal regulators for consumer mistreatment, $480 million for investment class action lawsuit. Also, it has settled with the Federal Government for mortgage-related issue in $2.09 billion.
The customers of the bank should be well aware of their rights and all the transactions happening in their bank accounts. The same way the Governments, both the provincial and federal should think of regulating bank at least for consumer protection if not for financial monitoring.