Monthly Archives: December 2016

You can use campaign funds to go see the president-elect in New York?

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Calif. Firms Join Forces in Employee RICO Suit Against Wells Fargo

Amid a flurry of lawsuits and government probes spinning out from Wells Fargo & Co.’s fake-accounts scandal, a group of California plaintiffs lawyers teamed up this week to bring a new employment suit, looking to test out an expanded set of legal theories.

Los Angeles-based lawyer Jonathan Delshad joined forces with a trio of other plaintiffs firms in California—Schonbrun Seplow Harris & Hoffman of Venice, McCracken Stemerman & Holsberry of San Francisco and Pessah Law Group of Los Angeles—to bring a proposed class action on behalf of former Wells Fargo employees.

The new suit, filed Dec. 27 in Oakland federal court, follows an earlier class action complaintin California state court that Delshad brought in September. Both are grounded in similar allegations that Wells Fargo set unreasonably aggressive sales goals for low-level employees and that, in turn, employees often wound up using fake customer contact information to open new accounts and meet sales quotas.

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New York wants to cut ties with disgraced Wells Fargo

New York to Wells Fargo: fuhgeddaboudit!

New York City is the latest state or city to consider cutting business ties with the embattled San Francisco banking giant in the wake of a sham-accounts scandal that exploded in September, The Post has learned.

Wells Fargo inked a contract with New York’s Department of Finance earlier this year to process credit-card transactions.

The deal runs from July 1 to June 30, 2021.

Wells Fargo will pocket $1.3 million a year under the deal, according to a copy of the paperwork obtained by The Post.

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Wells Fargo Settles With Brokers Over Claims of Racial Bias

  • Bank to pay $35 million to about 500 black financial advisers
  • Wells Fargo says it still disagrees with brokers’ claims

Wells Fargo & Co. settled a dispute with a group of black brokers claiming the bank failed to give them the same career opportunities as their white colleagues.

The bank will pay $35 million to more than 500 financial advisers and trainees, according to a settlement agreement filed Friday. Wells Fargo also agreed to add employees tasked with recruiting and coaching black brokers, and to set up a $500,000 business-development fund.

“We do not agree with the claims in the lawsuit, but believe that putting this matter behind us is in the best interests of our team members, clients and investors,” Helen Bow, a spokeswoman for the San Francisco-based bank, said in an e-mail.

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For Whistleblowers, Repercussions Are Felt Beyond Wells Fargo

Former workers at Wells Fargo who resisted pressure to push banking products on customers who didn’t want them say the bank retaliated against them by docking their permanent record, sabotaging future job prospects.


2016 saw one of the biggest banking scandals in U.S. history. Regulators say Wells Fargo opened as many as 2 million credit card and checking accounts in customers’ names without their approval. On top of that, former Wells Fargo workers tell NPR that the bank destroyed their careers after they tried to report wrongdoing. Capitol Hill is investigating. We should say, NPR receives financial support from Wells Fargo. NPR’s Chris Arnold has our story.

CHRIS ARNOLD, BYLINE: It hasn’t been the happiest holiday season for a former Wells Fargo worker named David. After the bank fired him from his job at a branch in Florida last year, David’s been making half of what he used to. He can’t afford his rent anymore. So instead of wrapping up presents, David’s been packing up his belongings.

DAVID: It is a strain. I’m packing boxes, putting stuff in storage. And I’m moving a one-bedroom apartment into a storage unit and then moving into one room in a person’s house.

ARNOLD: Which is not where David wants to be at 54 years old and heading into the new year.

DAVID: On New Year’s Eve, I will be moving.

ARNOLD: Over the past few months, NPR has talked to former Wells Fargo workers in Florida, Pennsylvania, New Jersey, Los Angeles and San Francisco. They all say that managers at the bank retaliated against them for calling the company’s ethics line and pushing back against intense sales pressure to sign customers up for multiple credit cards and checking accounts.

DAVID: There’s no need to have all those accounts, especially when they’re charging you fees.

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Two Ohio-based banks settle “redlining” allegations

A pair of banks based in Ohio must begin increasing mortgage lending in minority neighborhoods in certain areas of Ohio and Indiana as part of a settlement with theDepartment of Justice, which accused the banks of “redlining.”

The DOJ defines redlining as a “discriminatory practice by banks or other financial institutions of denying or avoiding providing credit services to consumers because of the racial demographics of the neighborhood in which the consumer lives.”

In this case, the DOJ accused Union Savings Bank and Guardian Savings Bank, which are based in Cincinnati and share common ownership and management, of redlining “predominantly African-American” neighborhoods in Cincinnati; Columbus, Ohio; Dayton, Ohio; and Indianapolis.

The complaint alleged that from at least 2010 through 2014, the banks extended credit to the residents of predominantly white neighborhoods to a “significantly greater extent” than they extended credit to majority African-American neighborhoods in the same cities.

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Wells Fargo Customers: Bank’s Contract Can’t Be Used To Allow Illegal Activity

Even though Wells Fargo has admitted that bank employees opened millions of fraudulent, unauthorized accounts in customers’ names, the bank has avoided or delayed class-action lawsuits over this fake account fiasco by citing terms in customer contracts that prevent account-holders from bringing lawsuits against Wells. However, one group of customers is arguing that the bank can’t use these contracts to shield itself from being held liable for illegal activity.

On Dec. 13, a federal court judge in Utah pressed pause on a potential class action against Wells while the court weighed whether or not to shunt the dispute out of the courtroom and into private arbitration.

Like most major banks — and telecom/cable companies, online retailers, nursing homes, for-profit educators, and just about everything else — Wells Fargo’s customer contracts usually include a clause that allow either party to force any legal dispute with the bank out of the courtroom and into arbitration.

The clauses also generally prohibit customers from joining together with other wronged customers in a class action, even through arbitration. That means each of the more than two million Wells account holders would need to go through this process, rather than being represented in court as part of a class.

If all of the customers who had fake accounts opened in their name were to enter into arbitration, that could be a logistical nightmare for the bank, which would have to deal with hundreds of thousands — potentially millions — of arbitration cases, but research shows that very few people know about this process, and so only a small number of individuals ever go the arbitration route.

The plaintiffs in the Utah case recently filed their objections [PDF] to the bank’s motion to compel arbitration, arguing that the bank can’t use a contract to conduct illegal activity.

The plaintiffs contend that if Wells Fargo intended the Consumer Account Agreements (CAA) to allow the bank to act illegally, that “would void the contract on numerous grounds.” And if these contracts are not intended to cover illegal bank actions, then the arbitration clause can’t be used to shield the bank from liability for fraud.

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Whistleblower sues Wells Fargo amid accounts scandal

SAN FRANCISCO — A former branch manager for Wells Fargo has filed a federal lawsuit against the embattled bank, claiming that supervisors harassed her after she had alerted them to improper sales and account activity by employees.

Diana Duenas-Brown, who worked for Wells Fargo for 14 years, including 11 as a branch manager in a Sonoma County community, reported at least 25 instances of illegal or improper sales activity by employees in the bank district where she worked, according to the federal lawsuit.

“This case presents a classic example of whistleblower retaliation,” Duenas-Brown stated in the lawsuit, which was filed on Dec. 9. The former branch manager told her supervisor of “fraudulent, illegal, and deceptive practices against Wells Fargo customers,” according to the litigation.

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Fidelity National Unit Said to Near Settlement Over Robo-Signing

A Fidelity National Financial Inc. subsidiary is in final talks to pay as much as $65 million to resolve U.S. government accusations that it contributed to improper and fraudulent foreclosures after the 2008 credit crisis, according to a person familiar with the deal.

Federal banking regulators agreed that a $65 million penalty could settle the case involving so-called robo-signing of foreclosure papers tied to the firm formerly known as Lender Processing Services Inc., according to the person, who requested anonymity because the negotiations aren’t public. Fidelity National acquired the company during the lengthy settlement talks with the Federal Reserve and other agencies, and it has been divided among subsidiaries including ServiceLink Holdings and Black Knight Financial Services.

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United Shore lands on DOJ hit list, will pay $48m for FHA lending violations

United Shore Financial Services will pay $48 million to settle allegations brought by the Department of Justice, which accused United Shore of violating the False Claims Act by “knowingly originating and underwriting” mortgages that did not meetFederal Housing Administration standards, the DOJ announced Wednesday.

The settlement makes United Shore just the latest in a long line of mortgage lenders that settled with the DOJ over alleged FHA lending violations.

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