Published March 28, 2017 17:24
WELLS FARGO “NEEDS TO IMPROVE” ITS APPROACH TO COMMUNITIES
March 28, 2017, San Francisco, CA---In response to Wells Fargo receiving a “double downgrade” in its Community Reinvestment Act rating (released earlier today), Paulina Gonzalez, executive director of the California Reinvestment Coalition, released this statement:
“A double downgrade for Wells Fargo (to Needs to Improve) was absolutely appropriate, considering the harm caused by Wells’ practices and products in communities throughout the US, especially in low-income communities, and communities of color.
Under the CRA, banks are expected to meet the credit needs of the communities where they do business. But Wells Fargo has a troubled CRA track record, with a number of costly settlements and lawsuits due to how the bank has treated student loan borrowers, homeowners, members of our military, and customers who had accounts opened for them that they had never requested.
It’s worth noting that over 95% of banks receive a “satisfactory” rating on their CRA exams or better. A rating of “Needs to Improve” is very rare, and is a reflection of just how damaging the bank’s behavior has been. This should be a wake-up call to the board of directors at Wells that the status quo isn’t working, that regulators like the OCC expect better, and that the bank has a long road ahead of it in repairing trust with its customers and with communities.”
Wells Fargo’s last CRA rating was published in 2008. CRC has been critical of the multi-year delay in the release of the CRA rating, and was one of several advocacy organizations who urged a downgrade to Wells’ CRA rating during the 2012 public comment period for this exam.
CRC is supporting a Wells Fargo shareholder resolution, sponsored by the Interfaith Center on Corporate Responsibility, that would require the bank to commission a comprehensive report on the root causes of the identity theft fraud, and steps the bank has taken to improve risk management and control processes.
Last year, the LA City Attorney, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau announced settlements and consent orders with Wells Fargo related to widespread fake accounts being created by bank employees for Wells Fargo customers. As part of the consent orders and settlement, the bank agreed to pay $185 million in penalties to the LA City Attorney ($50 million); OCC ($35 million); and CFPB ($100 million- the largest penalty ever leveled by the CFPB).