Law360, New York (June 27, 2017, 3:58 PM EDT) — Bank of America, Wells Fargo, JPMorgan Chase and Citigroup are accused of scamming U.S. agencies out of some $240 million in a False Claims Act suit unsealed Friday in Illinois federal court, which the government has said it will not join.
Relator Timothy Morgan’s March complaint was unsealed Friday after the U.S. declined to intervene. Morgan claims that the banks refused to pay vendors’ bills for foreclosure activity but still turned around and billed the U.S. for the supposed expenses.
California took another step on Tuesday toward allowing state residents to sue financial institutions for fraud, rather than letting banks force customers to settle disputes in arbitration, as a bill inspired by last year’s Wells Fargo scandal passed a key Assembly committee.
The bill has already passed the state Senate. The full Assembly, the legislature’s lower chamber, is expected to approve it in a vote toward the end of August, after the summer recess.
Under the bill, judges could override contract clauses that require customers to settle disputes through arbitration in cases where a bank commits fraud using customers’ personal information. Arbitration clauses, which have become standard practice since a 2011 U.S. Supreme Court decision, make consumers agree not to sue in the future as a condition of purchasing products or services.
The Los Angeles City Council took a step Tuesday toward divesting city funds from Wells Fargo over the bank’s fake accounts scandal and its support of the Dakota Access Pipeline.
The city does the majority of its banking with Wells Fargo through 800 accounts and holds more than $40 million in securities with the company.
The motion approved on a 14-0 vote does not cancel the city’s contract with Wells Fargo, but directs the Office of Finance and other departments to report on options for doing so and outline criteria and standards the city would have in any future agreements with banks.
Wells Fargo & Co (WFC.N) said on Tuesday it agreed to sell its commercial insurance business to private insurer USI Insurance Services, as the third-largest U.S. bank plans to focus on core banking products and services.
The financial terms of the deal, expected to close in the fourth quarter, were not disclosed by the companies.