SACRAMENTO, Calif.–The state of California will keep in place its financial sanctions against Wells Fargo for a second year in the wake of additional disclosures related to bad practices at the bank since its sham accounts scandal was revealed.
“The opaque manner with which the bank continues to do business and the frequency of new disclosures of wanton greed and lack of institutional control makes this decision so clear that there really was no choice at all,” State Treasurer John Chiang said in a statement.
The sanctions suspend investments by the Treasurer’s Office in Wells Fargo securities, bar use of the bank as a broker-dealer for the purchase of investments and bar the bank as a managing underwriter for bond sales in which the treasurer has the authority to appoint the underwriter.
California first imposed the measures on the San Francisco bank in September 2016, shortly after Wells Fargo agreed to a $185-million settlement with regulators for creating millions of unauthorized checking, savings and other accounts. Since that time, additional unauthorized accounts have also been discovered, and the bank has also been flagged for illegal practices related to auto loans, mortgages and small business lending.
In response, Wells Fargo issued a statement that it has “met and exceeded all of Treasurer Chiang’s expectations” and cited a list of initiatives it has undertaken, including separation of chief executive and chairman positions, and expansion of the company’s customer complaint-resolution process.
“We will continue serving the state and rebuilding trust with Californians as we take steps to become a better bank, regardless of politics,” the bank said.