The board of Wells Fargo & Co plans to oppose a resolution filed by shareholder activists led by the Sisters of St. Francis of Philadelphia seeking a review of the root causes of the bank’s unauthorized accounts scandal, according to a draft document seen by Reuters.
The draft dated Feb. 10 states the board’s position on the measure, to be included in its forthcoming proxy for this year’s springtime shareholder meeting, is that because the bank has its own investigation and reforms under way, the concerns raised by the proposal are being addressed.
According to the document, “our Board and our Company believe we are already providing through our current and anticipated future disclosures…the information requested by this proposal.”
An ongoing disagreement over the resolution could complicate the bank’s drive to regain shareholder confidence.
JPMorgan Chase & Co. has been sued by a participant in its 401(k) plan for allegedly causing employees to pay millions of dollars in excessive fees through a scheme motivated by “self-interest.”
The plaintiff claims JPMorgan, as well as various board and committee members with oversight of the $21 billion retirement plan, breached their fiduciary duties by, among other things, retaining proprietary mutual funds from the bank and affiliate companies for several years, despite the availability of nearly identical, lower-cost and better-performing funds.
As the Obama administration prepared to clean out its collective desks last week, the government announced that it wasn’t quite done dealing with with the events that led to the financial crisis.
In those last few days, the Obama administration announced multi-billion dollar settlements with two foreign banks, Deutsche Bank and Credit Suisse, for each bank’s mortgage securitization practices leading up to the housing crisis.
Republicans are putting a great deal of pressure on President-elect Donald Trump to fire Richard Cordray, director of the Consumer Financial Protection Bureau. He should resist that pressure. Any effort to discharge Cordray would be illegal — and it might even precipitate something close to a constitutional crisis.
Here’s the legal background. Most federal agencies count as “executive,” meaning that their heads serve at the pleasure of the president. But some agencies are “independent” — meaning that by law, the people in charge of them can be removed only for good cause, which Congress often specifies to mean “inefficiency, neglect of duty, or malfeasance in office.”
The Federal Reserve Board, the Federal Trade Commission and the Federal Communications Commission are independent agencies — and so is the CFPB. Under the law, Cordray’s five-year term extends until July 2018.
Both Republican and Democratic presidents have not loved the idea of independent agencies, operating outside of their daily control. But in 1935, the Supreme Court unanimously agreed that the Constitution gives Congress the power to create such entities. The court has stuck with that position ever since — and for decades no president has even tried to remove the heads of independent agencies.
To be sure, some people believe that the 1935 decision was wrong. Suppose President Trump shares that belief and asserts his authority to fire Cordray. On the day of his removal, Cordray would be within his rights to go to court to seek a judgment that the president acted beyond his constitutional authority.
ALBANY, N.Y. (AP) New York state has published a “bill of rights” for home owners facing foreclosure.
Democratic Gov. Andrew Cuomo announced the move Wednesday. It’s one piece of a broader effort to help New Yorkers struggling to stay in their homes.
The bill of rights reminds residents that they have the right to stay in their home and the duty to maintain it during the foreclosure process. It also lets residents known they have a right to be properly notified before a foreclosure suit is filed.
Law360, New York (January 4, 2017, 8:20 PM EST) — Deutsche Bank AG will fork over $95 million to end the U.S. government’s suit accusing it of trying to avoid paying taxes by setting up shell companies, according to a settlement approved Wednesday in a New York federal court.
The settlement comes after the government sued Deutsche Bank in December 2014 for allegedly engaging in a tax evasion scheme by setting up shell companies to hide profits on the appreciation of stock that the bank purchased in 1999. (AP) The settlement, which received the stamp of…
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.
OBERT SIEGEL, HOST:
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.