Wells Fargo Background Based on Public Facts
Wells Fargo & Company is an American Multinational Financial Services Company with corporate headquarters in San Francisco, California; operational headquarters in Manhattan; and managerial offices throughout the United States and internationally. The company has operations in 35 countries with over 70 million customers globally. It is considered a systemically important financial institution by the Financial Stability Board.
Importance of Wells Fargo in the United States
It is the fourth largest bank in the United States by total assets and is also one of the largest as ranked by bank deposits and market capitalisation. Along with JPMorgan Chase, Bank of America and Citigroup. Wells Fargo is one of the “Big Four Banks” of the United States. It has 8,050 branches and 13,000 ATMs. It is one of the most valuable bank brands. Wells Fargo is ranked 41st on the Fortune 500 list of the largest companies in the US.
Wells Fargo Controversies
- The company has been the subject of several investigations by regulators. On February 2, 2018, account fraud by the bank resulted in the Federal Reserve barring Wells Fargo from growing its nearly $2 trillion-asset base any further until the company fixed its internal problems to the satisfaction of the Federal Reserve.
- The Wells Fargo account fraud scandal is a controversy brought about by the creation of millions of fraudulent savings and checking accounts on behalf of Wells Fargo clients without their consent.
- News of the fraud became widely known in late 2016 after various regulatory bodies, including the Consumer Financial Protection Bureau (CFPB), fined the company a combined US$185 million as a result of the illegal activity.
- The company faces additional civil and criminal suits reaching an estimated $2.7 billion by the end of 2018. The creation of these fake accounts continues to have legal and financial ramifications for Wells Fargo and former bank executives as of early 2021
Learn about the Fall of Wells Fargo in the Below Video
U.S. regulators say Wells Fargo has repeatedly misled and overcharged its customers. These allegations have rocked the 170-year-old bank, which still stands as one of the largest lenders in the U.S. The Federal Reserve continues to uphold an unprecedented cap on the bank’s assets in response to the government’s findings.
These ongoing legal issues have weighed on the bank in recent years, sending numerous employees and executives out the door. Reports of fraudulent activity in Wells Fargo’s sales department first surfaced in 2013. The bank opened at least 3.5 million fraudulent accounts for unwitting customers, according to researchers at the Harvard Business School. This and other issues have led the government to fine the bank repeatedly.
Experts said the government has wide authority to limit Wells Fargo, given the reputation senior management has earned for imposing demanding business goals on its workforce. These lofty goals may have led employees to engage in deceitful and at times allegedly illegal behavior.
In a statement to CNBC, Wells Fargo said the bank is revising its management, risk and control frameworks while changing the company’s culture and policies. “They said, “there’s more work that we must do to rebuild trust, and we are committed to doing that work.”CNBC