Wells Fargo: Difference between revisions
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== Gold Rush Origins == | == Gold Rush Origins == | ||
Wells Fargo was founded by Henry Wells and William Fargo in 1852 during the California gold rush. The company began as a shipping company, to transport gold and other valuable products, and as a bank. <Ref>https://www.history.com/this-day-in-history/wells-and-fargo-start-shipping-and-banking-company</Ref> | |||
== Lawsuits against Wells Fargo == | == Lawsuits against Wells Fargo == | ||
=== 2008 Baltimore lawsuit === | === 2008 Baltimore lawsuit === | ||
Revision as of 19:55, 29 December 2022
Gold Rush Origins
Wells Fargo was founded by Henry Wells and William Fargo in 1852 during the California gold rush. The company began as a shipping company, to transport gold and other valuable products, and as a bank. [1]
Lawsuits against Wells Fargo
2008 Baltimore lawsuit
In 2008 the city of Baltimore initiated a lawsuit against Wells Fargo claiming the bank had targeted Black communities for deceptive, predatory and other unfair loan practices, otherwise known as "reverse redlining" which resulted in thousands of foreclosed homes. Between 2000 and 2009, 33 thousand homes in Baltimore had been placed into foreclosure. The lawsuit said that these foreclosures hurt the city by reducing property values and reducing city revenue via decreased property taxes and real estate transfer fees. The lawsuit cited surveys done in Chicago and Philadelphia regarding the negative effects of foreclosed homes on the surrounding areas through decreased property values. [2] [3] Lawyers in the proceedings provided evidence about how the majority of Wells Fargo foreclosures were concentrated in Black neighborhoods.
Between 2000 and 2004, nearly half of Wells Fargo's foreclosures were concentrated in census tracts with African American populations exceeding 80 percent. Nearly two-thirds were in tracts that were at least 60 percent African American. Yet fewer than 15 percent of Wells fargo's foreclosures were in areas that had a Black population of 20 percent or less. These patterns continued and even increased slightly between 2005 and 2007. The complaint revealed that Wells Fargo's foreclosed homes were concentrated in neighborhoods with a population at least 75 percent Black...
During this period of time while other lenders foreclosed on homes Wells Fargo foreclosed more homes than any other lender. [4]
Wells Fargo's lawyers responded to the lawsuits claiming their loan officers were "color blind," and their lending practices were solely based upon credit worthiness. In 2009 two former Wells Fargo employees came forward challenging this idea. One of the former employees alleged that while working at Wells Fargo
...loan officers referred to Blacks as "mud people" and described subprime loans as "ghetto loans." He reported that his supervisor characterized minority customers as "people who don't pay their bills," who "have bad credit," and who live in "slums and hoods."... "the company put 'bounties' on minority borrowers" as a way to encourage aggressive marketing of subprime loans in minority communities.
[5] [6] In 2010 the judge dismissed the case claiming it did not make sense to blame one bank when other banks conduct the same practices.
The judge did not make this ruling based on the city's actual complaint or even on evidence gathered through discovery, but rather on the basis of the vague new "plausibility" standard that the Supreme Court established in its 2009 ruling on the Iqbal v. Ashcroft case. Crafted by a conservative Supreme Court expressly to limit the ability of individuals to make civil rights complaints against powerful institutions, the new plausibility standard allowed the judge to use "common sense" and personal perceptions about the context of the case to make his ruling.
2012 Class Action Lawsuit
In 2012 the United States department of justice reached a 184.2 million dollar settlement agreement with Wells Fargo over their discriminatory mortgage lending practices to African-American and Hispanic borrowers. At the time it was the second largest settlement of its nature. [8] In regards to the court case the justice department stated:
"The settlement, which is subject to court approval, was filed today in the U.S. District Court for the District of Columbia in conjunction with the department’s complaint, which alleges that between 2004 and 2008, Wells Fargo discriminated by steering approximately 4,000 African-American and Hispanic wholesale borrowers, as well as additional retail borrowers, into subprime mortgages when non-Hispanic white borrowers with similar credit profiles received prime loans. All the borrowers who were allegedly discriminated against were qualified for Wells Fargo mortgage loans according to Well Fargo’s own underwriting criteria.":
401K Lawsuit
Between 2013-2018, the United States department of labor found, Wells Fargo employees had overpaid for the companies stock in their retirement plans. Wells Fargo agreed to pay out 131.8 million dollars directly to individuals affected by the overpriced stock and was also made to pay an additional 13.2 million dollars in penalties. [9] [10]
U.S. v. Wells Fargo Bank NA, U.S. District Court, Southern District of New York, No. 12-07527
https://www.reuters.com/article/us-wellsfargo-housing/wells-fargo-to-pay-1-2-billion-in-u-s-mortgage-fraud-settlement-idUSKCN0VC1KO -- expand upon
2020 Civil and Criminal Settlement
In February of 2020 Wells Fargo agreed to a 3 billion dollar settlement to settle criminal and civil lawsuits pertaining to unlawful sales practices between 2002-2016. The department of justice stated Wells fargo and its subsidiaries:
have agreed to pay $3 billion to resolve their potential criminal and civil liability stemming from a practice between 2002 and 2016 of pressuring employees to meet unrealistic sales goals that led thousands of employees to provide millions of accounts or products to customers under false pretenses or without consent, often by creating false records or misusing customers’ identities, the Department of Justice announced today.
The 3.5 million illegally opened accounts [11] resulted in Wells Fargo collecting millions of dollars in fees and interests and negatively affecting customer's credit scores in some cases. [12] [13] John Stumpf, CEO of Wells Fargo between 2007-2016, was banned from ever working at a bank again, because of the criminal actions of Wells Fargo, by the federal government and agreed to pay a 2.5 million dollar fine to the SEC. [14]
In September of 2021 Wells Fargo was fined 250 million dollars by the Office of the Comptroller of currency for failing to meet its repayment requirements regarding the lawsuit. [15]
Connections To Police Organizations
Atlanta
Wells Fargo is a donor and sponsor of the Atlanta Police Foundation, a private-public institution, which helps fund the Atlanta Police department, and is currently funding the new construction of a police training facility dubbed "cop city" by a loose coalition of individuals resisting its construction. [16]
Seattle
Wells Fargo has donated money to the Seattle Police Foundation, a private-public institution funneling money into the Seattle police department. [17]
GEO Group and CoreCivic
GEO Group and CoreCivic (previously Corrections Corporation of America) are the two largest private prison operators in the so called United States. They are both structured as Real Estate Investment Trusts,
which allows them to pay very low taxes – GEO paid only $1.5 million in Federal taxes in 2015 – while giving 90% of their taxable income to shareholders. As a result of this structure these companies have limited cash reserves and rely wholly on these banks to extend credit to keep their operations going. Simply put, if the banks rescinded their credit agreements these companies would struggle to continue being operational.
GEO and CoreCivic depend upon revolving credit arrangements with a syndicate of banks including Wells Fargo. CoreCivic received 444 million dollars in loans through their revolving credit as of 2016- the largest contributors being SunTrust, Bank of America, Wells Fargo, and JPMorgan Chase. GEO Group recieved 450 million from BNP Parlbas, Bank of America, Barclays, JPmorgan Chase, SunTrust and Wells Fargo through 2016.[19]
Investment In Fossil Fuels
From 2016 to 2021 Wells Fargo invested 271.819 billion dollars into fossil fuel companies, third only to JPMorgan Chase and Citi Bank. Wells Fargo alongside Bank of America, JPMorgan Chase and Citi Bank are the top four fossil fuel financiers in the world, with Wells Fargo and JPMorgan Chase increasing their fossil fuel financing in 2021. Wells Fargo increased fossil fuel financing by 20 billion dollars in 2021.[20]
Greenwashing
Enbridge
Wells Fargo is one of Enbridge's largest investors, [21] and invested 3.86 billion dollars into their line 3 pipeline, which faced large opposition from a litany of groups, organizations, and Indigenous Nations.
The militarized response to Line 3 protests and alleged violation of constitutional rights amplifies legal and reputational risk to Wells Fargo and its shareholders. Enbridge reimbursed U.S. law enforcement over $2 million for policing protests against Line 3, which has been tied to harassment, surveillance, illegal blockades, allegations of torture (pain compliance), and use of “less-than-lethal” weapons.vii Over 900 arrests, citations, and charges have been levied against Water Protectors, many of which are allegedly disproportionate or excessive.viii Line 3 has additionally been tied to instances of sex trafficking and violence against women.ix
Dakota Access Pipeline
Wells Fargo was one of 17 banks to invest in the Dakota Access Pipeline. [23]
TransCanada
Wells Fargo partly funded TransCanada's Keystone XL pipeline. [24] [25]
Trans Mountain Pipeline Expansion
Wells Fargo has helped finance the proposed Trans mountain pipeline expansion. [26] The expansion will build 980 KM of new pipeline. [27]
Sources
- ↑ https://www.history.com/this-day-in-history/wells-and-fargo-start-shipping-and-banking-company
- ↑ How Racism Takes Place, George Lipsitz, Page 106
- ↑ https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1011489
- ↑ How Racism Takes Place, George Lipsitz, Page 106-107
- ↑ How Racism Takes Place, George Lipsitz, Page 108
- ↑ https://cappellonoel.com/class-action-wells-fargo-discrimination/
- ↑ How Racism Takes Place, George Lipsitz, Page 109
- ↑ https://www.justice.gov/opa/pr/justice-department-reaches-settlement-wells-fargo-resulting-more-175-million-relief
- ↑ https://www.forbes.com/sites/dereksaul/2022/09/12/wells-fargo-shells-out-145-million-to-end-feds-401k-investigation/?sh=565f623c4724
- ↑ https://www.dol.gov/newsroom/releases/ebsa/ebsa20220912
- ↑ https://www.forbes.com/sites/maggiemcgrath/2017/08/31/wells-fargo-admits-to-more-unauthorized-accounts-increasing-tally-to-3-5-million/?sh=326e07f21f1b
- ↑ https://indiancountrytoday.com/archive/wells-fargo-preyed-on-natives-elderly-and-college-students
- ↑ https://www.justice.gov/opa/pr/wells-fargo-agrees-pay-3-billion-resolve-criminal-and-civil-investigations-sales-practices
- ↑ https://www.forbes.com/sites/dereksaul/2022/09/12/wells-fargo-shells-out-145-million-to-end-feds-401k-investigation/?sh=565f623c4724
- ↑ https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-95.html
- ↑ https://boingboing.net/2020/07/28/chevron-shell-wells-fargo-fu.html
- ↑ https://readsludge.com/2020/06/19/corporate-backers-of-the-blue-how-corporations-bankroll-u-s-police-foundations/
- ↑ https://news.littlesis.org/2018/06/21/who-is-profiting-from-incarcerating-immigrant-families/
- ↑ https://www.inthepublicinterest.org/wp-content/uploads/ITPI_BanksPrivatePrisonCompanies_Nov2016.pdf
- ↑ https://www.bankingonclimatechaos.org//wp-content/themes/bocc-2021/inc/bcc-data-2022/BOCC_2022_vSPREAD.pdf
- ↑ https://www.ienearth.org/wp-content/uploads/2019/03/Banking_on_Climate_Change__2020_vF.pdf
- ↑ https://www.sec.gov/Archives/edgar/data/72971/000121465922005068/o411222px14a6g.htm
- ↑ https://www.yesmagazine.org/issue/good-money/2019/01/02/standing-rocks-surprising-legacy-a-push-for-public-banks
- ↑ https://www.greenpeace.org/usa/research/four-tar-sands-pipelines-are-heavily-financed-by-25-key-banks/
- ↑ https://www.sierraclub.org/compass/2017/12/wells-fargo-has-choice-make-keystone-xl-tar-sands-double-down-or-divest
- ↑ https://www.greenpeace.org/usa/research/four-tar-sands-pipelines-are-heavily-financed-by-25-key-banks/
- ↑ https://www.transmountain.com/project-overview