Tag Archives: Wells Fargo

Court rules Wells Fargo subject to penalty on foreign tax credits

NEW YORK (AP) — A federal court has ruled that Wells Fargo is liable for a negligence penalty in a tax case that involved foreign tax credits, but the bank prevailed in another part of the case that could mute any payment.

The case involves Structured Trust Advantaged Repackaged Securities, or STARS.

Wells Fargo said the structure exempted it from tax, which the IRS disputed. A jury ruled last year that Wells Fargo’s STARS were two products, a loan and trust. The trust was ruled to be simply for tax purposes, while the loan was not.

A court found Wells liable for a 20 percent penalty Wednesday tied to tax credits, but also that it could deduct interest expenses from the loan.

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Could Wells Fargo’s scandal boost mortgage discrimination lawsuits? L.A., other cities hope so

A recent Supreme Court decision that will allow mortgage discrimination cases against Wells Fargo and other banks to proceed is more than just another bad headline for the San Francisco financial giant.

As those cases progress, they represent yet another way that the bank’s practice of opening unauthorized accounts for customers could come back to haunt it.

Attorneys for the cities of Philadelphia and Oakland are arguing that the unauthorized accounts scandal — and the bank’s own admissions as to what caused it — bolsters their claims that Wells Fargo improperly steered black and Latino home buyers into pricier mortgages than white buyers.

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Wells Fargo Must Fully Compensate Victims in Account-Scandal Settlement

SAN FRANCISCO (CN) – Wells Fargo must guarantee full compensation and credit history repairs for an estimated 2.73 million victims of its sham accounts scandal before a judge will approve a proposed $142 million settlement.

U.S. District Judge Vince Chhabria laid out his conditions for approving the deal in a ruling Wednesday night, less than one week after several lawyers urged him to reject the settlement during a May 20 hearing.

The class action settlement in Jabbari v. Wells Fargo would release the bank from liability over its employees opening an estimated 3.5 million unauthorized accounts and lines of credit from 2002 to 2017 to meet aggressive sales goals.

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Wells Fargo scandal may force New York City to find new bank

City rules may require New York to yank its deposits from Wells Fargo, one of 20 banks approved to hold the city’s cash.

A commission is set to meet next week to decide which banks are approved for city deposits for the next year — and advocates point to the city’s own rules to argue officials are legally required to bump the embattled bank from the list.

Wells Fargo — embroiled in a scandal over the creation of up to 2 million fake accounts — was knocked down to a “needs improvement” rating by federal regulators in March under the Community Reinvestment Act, citing an extensive pattern of discriminatory and illegal lending practices.

New York City rules say that in order to be designated to get government deposits, a bank must have at least a “satisfactory” rating.

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$142M Wells Fargo Deal Moves Forward Despite Objections

SAN FRANCISCO (CN) – A federal judge said Thursday he will likely approve a $142-million Wells Fargo settlement, despite objections that the deal lets the bank off easy for opening millions of unauthorized accounts.

The class action settlement in Jabbari v. Wells Fargo would release the bank from liability for opening an estimated 3.5 million fraudulent accounts and lines of credit from 2002 to 2017.

Alabama attorney W. Lewis Garrison, Jr. is one of several lawyers who traveled to San Francisco Thursday to urge U.S. District Judge Vince Chhabria to reject the deal. Garrison represents plaintiffs in four separate class actions against the bank in Florida, Georgia, North Carolina and Alabama. State law claims of identity theft could make the bank liable for a potential $2 billion, Garrison told the judge.

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New lawsuit filed against Wells Fargo by Jackson couple

A Jackson couple has filed a federal lawsuit against Wells Fargo and a home windows company claiming the financing scheme devised by the companies is a “fraud and a scam.”

Wilbert and Esther McCoy filed the lawsuit Friday in U.S. District Court in Jackson against Wells Fargo and The Window Source.

The lawsuit says: “In fact, the defendants, without any authorization or agreement from their customers, sign their customers up for what turns out to be a Visa Home Projects credit card, issued by Wells Fargo.

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Philadelphia sues Wells Fargo over discriminatory lending

Bad news for Wells Fargo…

Housingwire:

The city of Philadelphia announced Monday that it is suing Wells Fargo for alleged discriminatory lending practices against minority borrowers.

Philadelphia’s announcement specifically cites the recent Supreme Court decision, which stemmed from a lawsuit brought by city of Miami against Bank of AmericaCitigroup, and Wells Fargo in 2013.

In its lawsuit, Miami claimed that the banks engaged in predatory lending to minority borrowers in the city, and accused the lenders of “reverse redlining,” which led to a large number of foreclosures, lower property tax collections, and increased cost to the city to deal with the resulting property value loss and blight.

The Supreme Court ruling granted cities the right to sue banks under the Fair Housing Act, but established that the city must prove direct harm to itself caused by the lender’s actions.

Philadelphia is taking that challenge head-on.

According to the city’s announcement, its complaint alleges that beginning in 2004 through today, Wells Fargo violated the FHA by “steering African-American and Latino borrowers towards high-cost or high-risk loans even where those borrowers’ credit permitted them to obtain more advantageous loans.”

Philadelphia’s complaint also alleges that Wells Fargo was “aware and, in fact, incentivized the marketing of the high-cost or high-risk loans to minorities.”

According to the city, the incentivized loans included “lender credit” loans, in which Wells Fargo pays the borrower’s closing costs in exchange for receiving a loan with a higher interest rate.