The US Federal Reserve is imposing more penalties on Wells Fargo & Co, freezing the bank’s growth until it can prove it has improved its internal controls. In addition, the bank has agreed to replace four board members.
It is the latest blow against the San Francisco bank that has had its reputation tarnished by revelations it opened phony customer accounts and sold auto insurance to customers who did not need it.
The new penalties were announced late on Friday on Fed Chair Janet Yellen’s last day at the central bank.
Photo: AP
“We cannot tolerate pervasive and persistent misconduct at any bank,” Yellen said in a statement. “The enforcement action we are taking today will ensure that Wells Fargo will not expand until it is able to do so safely and with the protections needed to manage all of its risks and protect its customers.”
The Fed said it is restricting the bank’s assets to the level where they stood at the end of last year until it can demonstrate that it has improved its internal controls.
The announcement came after the close of trading on Wall Street on Friday. Wells Fargo’s stock fell more than 6 percent in after-hours trading.
“We take this order seriously and are focused on addressing all of the Federal Reserve’s concerns,” CEO Timothy Sloan said.
Wells Fargo said it is confident it can satisfy the Fed’s requirements and reiterated that it remains “open for business.”
The bank said that it would continue to meet customer’s financial needs, including saving, borrowing and investing.
It said it has the flexibility on its balance sheet to pull back from certain activities to meet the Fed’s growth limits, although its exact steps have not been determined.
Sloan also emphasized that the order is related to prior issues, not any new matters.
The company has agreed to replace three directors by April and another one by year-end. It did not specify which board members would be affected.
The Fed’s new order marked the latest chapter in a series of scandals that have rocked the bank in the past few years.
Wells Fargo has said that employees opened more than 3 million fake accounts in order to meet sales quotas. It ended up paying US$185 million to regulators and settled a class-action suit for US$142 million.
It has also said that it signed up hundreds of thousands of auto loan customers for auto insurance they did not need. Some of those customers had their cars repossessed because they could not afford both the auto loan and insurance payments.
Wells Fargo also offered refunds to customers last year after acknowledging that its mortgage bankers unfairly charged them fees to lock in interest rates on mortgages.
Taiwan will prioritize the development of silicon photonics by taking advantage of its strength in the semiconductor industry to build another shield to protect the local economy, National Development Council (NDC) Minister Paul Liu (劉鏡清) said yesterday. Speaking at a meeting of the legislature’s Economics Committee, Liu said Taiwan already has the artificial intelligence (AI) industry as a shield, after the semiconductor industry, to safeguard the country, and is looking at new unique fields to build more economic shields. While Taiwan will further strengthen its existing shields, over the longer term, the country is determined to focus on such potential segments as
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
RSS