The Chicago City Council on Wednesday approved a one-year suspension for Wells Fargo & Co from city business because of its scandal over phony accounts, joining the states of Illinois and California in punishing the bank.
The ban includes bond underwriting, brokerage, trustee and other services the bank has provided to the city. Wells Fargo has earned $19.5 million in fees from Chicago since 2005.
Watch What Else Is Making News
- Varun Gandhi Under Attack Over Defence Deals: Here’s How
- This Diwali, Let Blind Students Brighten Up your Homes With Candles & Diyas
- CBI Files Supplementary Chargesheet In Sheena Bora Murder Case
- Soha Ali Khan And Vir Das Starrer 31st October Audience Reaction
- Sahara Chief Subrata Roy’s Parole Extended Till November 28
- Simple Tips To Secure Your Debit Card From Fraudsters
- New Zealand & India Team Being Welcomed In Chandigarh
- Mumbai Call Centre Scam: All You Need To Know
- Jammu Kashmir Chief Minister Mehbooba Mufti Appeals To Police: Here’s What She Said
- Shocker From Ahmedabad: Find Out What Happened
- Bigg Boss 10 Day 3 Review: Celebs Fail To Do Well in First Task
- Airtel Offers 10GB Data At Rs 259 For New 4G Smartphone Users
- Aamir Khan Starrer Dangal’s Trailer Launched: First Impressions
- TMC Supporters Attack BJP Leader Babul Supriyo
- Sri Lankan Navy Apprehends 20 Indian Fishermen
Wells Fargo staff opened checking, savings and credit card accounts without customer approval for years to satisfy managers’ demand for new business, according to a $190 million settlement with US regulators and California prosecutors reached on September 8. The bank said it fired 5,300 employees over the issue.
“I hope this action by the city of Chicago will echo around the nation and make it clear to other institutions this conduct is unacceptable,” said Alderman Edward Burke, who heads the council’s finance committee.
Illinois penalized the bank earlier this week while California announced a 12-month-long sanction against Wells Fargo, that state’s oldest financial institution, on September 28. California replaced Wells Fargo as a lead underwriter on two bond sales in the wake of its decision.
On Wednesday, Wells Fargo said it would continue to serve Chicago customers and support non-profit community agencies, educational institutions and foundations.
“Wells Fargo is disappointed that the Chicago City Council has chosen to suspend a relationship with one of the nation’s safest and strongest financial institutions at a time when the city needs access to dependable financial partners,” the bank said in a statement.
Following the vote, Chicago Mayor Rahm Emanuel told reporters: “The city’s disappointed in Wells Fargo.”
Illinois Governor Bruce Rauner’s office, which included Wells Fargo in a pool of senior underwriters for bond sales, said on Sunday the state would not be using the bank for debt deals “until further notice.”
Illinois Treasurer Michael Frerichs on Monday suspended $30 billion in state investment activity with the bank. Those activities include investments in Wells Fargo debt and bank broker/dealer services.
Also on Wednesday, Connecticut’s state treasurer Denise Nappier told Reuters in a statement that Morgan Stanley was added as a co-bookrunner for an October bond sale because of troubles at Wells Fargo.
“The addition of Morgan Stanley was made in an abundance of caution to help ensure the success of the sale,” the statement said. “Wells Fargo had been assigned as the sole bookrunner prior to the recent revelations of regulatory actions against the bank.”
In addition to outright sanctions, the states of Massachusetts and Oregon, as well as the city of New York, have said they will press for reforms at the bank, await results of investigations while also reviewing their business relationship with the firm.