Amid the heated-up news about the FTX drama, Ripple CEO Brad Garlinghouse has tried to turn the public’s attention to Wells Fargo money mismanagement. A $3.7 billion fine for mismanagement at Wells Fargo bank was treated as, in Garlinghouse’s words, barely a blip on the radar.
Even after more than one month of unraveling, FTX is still dominating the news section of both crypto and traditional media. But there are equally or more damaging activities that have been carried out by well-known companies with good financial standing that begs similar attention, if not more.
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families.” This is what the Consumer Financial Protection Bureau Director Rohit Chopra said about the whole event. But the world may have been more fixated on the damage done by FTX, while billion-dollar scandals by traditional giants such as Wells Fargo do not receive the necessary attention.
Ripple CEO expressed his concern with the lack of public attention to the Wells Fargo case in his tweet on Dec. 21:
On December 20, the US Consumer Financial Protection Bureau (CFPB) imposed a $1.7 billion civil fine and more than $2 billion in consumer redress on Wells Fargo. The CFPB claims that the bank’s actions lost thousands of consumers their cars and houses as well as billions of dollars in financial hardship.
Wells Fargo Scandal
The Consumer Financial Protection Bureau penalized Wells Fargo $1.7 billion, the highest civil penalty it has ever levied, plus an extra $2 billion for its participation in the improper management of consumer loans for more than 16 million clients.
The CFPB Director referred to the fourth-largest bank in the country as a serial offender and claimed that it has cost its clients billions of dollars in damage, including thousands of people losing their homes and cars. Additionally, the bank was charged with wrongfully repossessing automobiles, charging fees and interest on auto and mortgage loans unlawfully, and improperly allocating customer contributions to auto and mortgage loans.
Even adjustments to mortgages that the regulatory watchdog believed should have been allowed were resisted by the bank. According to the CFPB, the bank allegedly knew about the problem that the rejection caused some borrowers to lose their houses before resolving it years later.
Wells Fargo has done a lot of substantial harm, from charging consumers with check and savings accounts erroneous overdraft fees and other penalties to misfreezing accounts.