Amid a storm of negative press, megabank Wells Fargo is coming under scrutiny again for deceptive practices against an Alabama war veteran and his family.
Jimmie Collins was a disabled veteran who passed away in 2014. Prior to his death, he had fallen victim to the practice of dual tracking- an illegal process that pushes through an individual’s mortgage modification application and a foreclosure at the same time.
After Collins passed away, his loved ones reportedly asked the bank to continue deducting monthly payments to ensure the house would remain in the family. Instead, Wells Fargo unexpectedly foreclosed Jimmie Collins’ home.
Now, the family says that his bank- Wells Fargo- must right the painful situation.
“We all say we support our troops, but when this type of incident takes place, we have to stand up and really support our troops then,” the Collins family’s attorney Richard Rice told WIAT. “Rhetoric is good and language is good, but we also have to be willing to take action to show them that we stand with them when they’re being taken advantage of like this by a large bank.”
According to WIAT, the family is fighting back with a lawsuit that accuses the bank of wrongful foreclosure.
The Chicago City Council on Wednesday approved a one-year suspension for Wells Fargo from city business in the wake of its scandal over phony accounts.
The ban includes bond underwriting, brokerage, trustee and other services the bank has provided to Chicago. Wells Fargo WFC 3.20% has earned $19.5 million in fees from Chicago since 2005.
A Wells Fargo executive who reported directly to the bank’s former head of retail banking has left the company, the Observer has learned.
Kenneth Zimmerman, who headed Wells Fargo’s deposit products group, made a personal decision to depart from the company at the end of July, spokeswoman Richele Messick said. Zimmerman left the company after initially making a personal decision in January to take a leave of absence, Messick said.
“He made a decision not to return to the bank … (and) focus on some other priorities,” Messick said. She said Zimmerman’s departure was announced internally.
The move comes as San Francisco-based Wells is embroiled in a scandal over unauthorized accounts that regulators said branch employees opened without customers’ knowledge in order to meet aggressive sales goals.
Zimmerman had reported to Carrie Tolstedt, the executive who ran the community banking unit at the center of the controversy. Tolstedt also announced in July plans to retire at the end of this year, but last week the bank said Tolstedt has already left the company.
Zimmerman had been with Wells for 19 years and like Tolstedt was based in San Francisco, Messick said. An investor presentation in May listed Minneapolis-based Ed Kadletz as the bank’s new head of deposit products.
A Wells Fargo whistleblower who said she tried to warn the company years ago has a friend in Des Moines telling the same story.
The Chicago City Council approved Monday a one-year suspension for Wells Fargo from city business because of its scandal over phony accounts, joining the states of Illinois and California in punishing the bank.
A former coworker of the whistleblower said she is proud information on the company came to light, but sad so many Wells Fargo workers were fired for doing what they felt was necessary to keep their jobs.
Danita Doris said she only lasted a year at the Wells Fargo branch in St. Helena, California because of daily sales pressure.
Her co-worker was Yesenia, the whistleblower who claims she first alerted the Wells Fargo seven years ago about fake accounts forced on unsuspecting customers.
“I’m frustrated that it’s A, taken so long to come to light, and B, that all the higher ups are acting surprised,” Doris said.
Doris said even as a teller the pressure to meet a daily quota was immense, and she and others often participated in helping co-workers meet their goals.
“I would say (I had) 10 different accounts, 15 different accounts,” Doris said.
Nothing clarifies the mind of a bank board member than the loss of lucrative business deals. Wells Fargo’s CEO says he will pay a penalty for presiding over his bank’s fraud wave. Could stricter sanctions follow, perhaps even a criminal investigation?
We spoke with William K. Black Jr., economist and white-collar criminologist, about the implications of the Wells Fargo case and the laws that might have been broken.
Rest of the post is at Huffington Post. Read it here.
NEP’s Bill Black appears on The Real News Network. Topic of discussion is Deutsche Bank, the German bank that was at the center of the LIBOR scandal and is likely to face upwards of $5 billion in a settlement with the Justice Department. Video is below. If you would like to see with a transcript, it is here.
(CN) — A federal judge has ordered the government to turn over documents related to its decision to permanently divert billions of Fannie Mae and Freddie Mac profits from investors to the U.S. Treasury following their $188 billion bailout in 2008.
Fairholme Funds is an investment fund run by Bruce Berkowitz. Mr. Berkowitz was named domestic equity fund manager of the decade by Morningstar Inc. in 2010, but since then his fund has massively underperformed the S&P 500 by nearly 12 percent annually, according to Seeking Alpha.
Part of the fund’s losses are due to its large holdings in Fannie Mae and Freddie Mac.
Value of preferred shares of the mortgage giants has dropped by more than half since Fairholme lost its federal lawsuit challenging the government’s 2012 amendment to the 2008 bailout terms. The amendment diverted Fannie and Freddie profits to the U.S. Treasury and eliminated dividends that normally go to private investors.
Investors described the amendment as requiring “Fannie Mae and Freddie Mac to pay a quarterly dividend to Treasury equal to the entire net worth of each enterprise, minus a small reserve that shrinks to zero over time.”
Here is the court document. Click here.