"This Is A Full-Blown Scandal: It’s Unbelievable, Outrageous" - Comptroller Demands Heads Roll At Wells

Tyler Durden's picture

Wells Fargo is in boiling hot water. Again.

One day after the NYT reported the latest major scandal involving Warren Buffett's favorite bank, in which the bank was busted less than a year after its miss-selling fraud cost the former CEO his job, revealing that the bank charged some 800,000 customers for auto insurance they did not need (with some still paying for it), the demands for resignation have arrived.

In a statement from NYC Comtroller Scott Stringer, he demands that Wells Fargo must immediately "jump-start" necessary board change by replacing Chairman Stephen Sanger with a new independent chairperson following the latest "mismanagement" revelations.

In surprisingly harsh words, Stringer does not hold anything back against the worst performing bank stock today (WFC -2.8%):

"This is a full-blown scandal — again. It’s unbelievable, outrageous, sad, and yet quintessential Wells Fargo. This isn’t just a corporate debacle. It’s caused real human harm. It’s reflective of a system that Americans feel is rigged against the little guy, and sadly symbolic of a culture that puts short-term profits ahead of creating sustainable value for shareowners. Everyday families have suffered and tens of millions of hard-earned dollars were stripped from unsuspecting Americans, many of whom are struggling just to get by. In the end, shareowners ultimately suffer the long-term consequences.

He also demands that the Wells board must immediately disclose the circumstances to investors; "we need to know what the board knew and when it knew it and how executives are being held accountable"

“We need accountability and we need it now. Investors have long said this board needs to change, and these new revelations only reinforce that urgency. Wells Fargo must immediately jumpstart this process by replacing Chairman Stephen Sanger with a new independent chairperson. Investors, as well as consumers and everyday Americans, have waited too long for accountability. This board needs to be overhauled — now.

 

“The Wells Fargo board must also immediately disclose to investors the circumstances of this new scandal. We need to know what the board knew and when it knewd it and how executives are being held accountable. While we appreciate that these findings emanated from a report the company itself launched, full transparency and accountability are non-negotiable.”

Meanwhile, realizing that the second round of Congressional hearings are imminent, the bank promptly pulled off the best apology it could: Wells Fargo began examining the way its auto lending unit enrolled borrowers into insurance policies a year ago, but did not plan to disclose problems it uncovered until it was ready to issue reimbursements to affected customers, its head of consumer lending told Reuters on Friday.

In an interview, Franklin Codel said the business started noticing elevated customer complaint volumes in July 2016. It quickly suspended its auto collateral protection insurance (CPI) program and escalated issues to senior management, the board and regulators, he said.

 

"The problem with disclosing to the marketplace today or several months ago is customers start calling and asking when they're going to get their money," he said.

But of course, why would Wells lie about something which reads like clear fraud, especially when one reads it in the NYT and not in a press release? As for customers asking for money, the total amount demanded - and paid out - is about to get much higher.

Finally, we wonder if and when Warren Buffett, whose choice it was to keep the current board after last year's scandal, will have something to say about this latest fraud at America's largest mortgage lender.

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NugginFuts's picture

Don't worry - he'll be working in the WH soon enough. Problem solved!

Looney's picture

 

The Board’s compensation, ALL OF IT, should be clawed back!

Looney

jcaz's picture

Say it ain't so, Uncle Warren!

Ah, some of the shine is finally coming off the Omaha turd.....

What was it you used to say, Warren?  Ah yes-  "It takes  20 years to build a good reputation, and 20 mins to lose it";

Your  20 mins are about up......

NugginFuts's picture
"It’s Believable, Outrageous"

Fixed it. 

besnook's picture

it's nothing until criminal charges are brought and long prison sentences awarded.

NidStyles's picture

Eliminate the Fed by paying them off with a non-transferable Treasury coin, and then automate all the banks.

Don't even need to repeal the Federal Reserve Act. Just nullify it by paying them off with legal tender and start issuing your own again. Watch the bankers lose their shit and all that power they abuse over night.

If they get out of line, take the violent ones down, and jail the rest. Throw the book at them all. RICO them if you have to.

Never One Roach's picture

Under Clinton zero bankers were jailed.

Under Bush zero bankers were jailed.

Under Hussein zero bankers were jailer.

Time will tell about this fellow

LittleGreenMan's picture

Exactly!  The 0.001% (the corrupt, wealthy, elites who own the planet), and their cronies have been above the law.  When are we going to start putting them in jail?

GunnerySgtHartman's picture

Ah, some of the shine is finally coming off the Omaha turd.....

Not to worry, CNBS will get out their turd-polishing cloths and go to work.

robertsgt40's picture

It isn't like management didn't hear from whistleblowers over the years. And they were canned for their "team effort"

anarchitect's picture

You don't get it.  The purpose of a Board is to rubber-stamp executive pay raises and provide orifices for their gratification.

343 Guilty Spark's picture

The corporation should lose their corporate charter tbh.  They have shown clear disregard for the rule of law and betterment of the community/society.  This should be the impetus for the governement to start breaking up the banks.

38BWD22's picture
Lots and lots of very interesting scandal news today!  Ahh, it's Friday, it'll all be gone by Monday.
Shitonya Serfs's picture

The Russians will be back Monday. And/or McStain will die (fingers crossed).

markovchainey's picture

But I want McStain to suffer a long, slow, painful, embarrassing death!  

Nobody For President's picture

Alas, you are all too right DC - although this one *may* not go away...

gigadeath's picture

Nationalize the Federal Reserve.

Francis Marx's picture

Look.. their bankers. The prince of this world is Satan as Jesus said. They are the minions of Satan..

Ignatius's picture

I note that the tellers at Wells have been extraordinarily "friendly" these last few years to the point of being downright annoying.

I guess now we know why.

techpriest's picture

I'm friends with a WF teller. That company does not value surface customers, they will put on a nice face, but off-duty, expressions like "they shoved us off to some phone line like we're a customer" are pretty typical. The guy is learning new skills for a new job.

Catullus's picture

Happens every time I walk in.

I get to sit down one of these "senior" bankers.  They end up just sitting down at their desk and calling their help desk. Like you walk in to a retail location so you watch someone sit on hold.

small axe's picture

why overhaul the board? It must be very pleased at the way Wells execs continue to screw their customers. In the eyes of the company and board, the only crime was that they got caught.

Or maybe Uncle Warren could have a little chat with them and rap their knuckles. That would teach them.

 

SoDamnMad's picture

We will learn later (maybe) that Uncle Warren heard this was coming and dumped a lot of Wells and bought tons of puts through his off-shore accounts. 

Win-win-customers lose-lose

GlassHouse101's picture

Will bank for food!

Seasmoke's picture

Hang Warren Buffett for Treason for 300 million to see. And then the country can finally get back to being honest.

silverer's picture

Put them in jail.

jamesmmu's picture

and what you gonna do about it? LOL - Wells fargo

yellowsub's picture

If no criminal charges then it's just another show...

What?  You're goign to fine them and they won't admit to any wrong doing?  That worked out well to deter...

ToSoft4Truth's picture

Car insurance isn't cheap.  Do you posters blindly pay bills that pop into the box?

 

Opening a debit account:

 

"What's this extra $80.00 a month charge?"

'That's a line item.'

"Oh, OK." 

rockstone's picture

That's how a 'get me on' replies. A 'get me on' is someone with credit so bad, they'll pay whatever fee or condition you throw on them. Thus if you can "get me on" I'll take the car, the crib etc.

They also have other distinctive characteristics. One is pronouncing "birthday" with an F.

Seasmoke's picture

Wells Fargo stole my townhouse. Judge tried to make look like the scam artist. What do you have to say now Your Honor ???? You fucking asshole.

NoWayJose's picture

Here is what happens - they get hit with a Billion Dollar fine - but 70% of that is chewed up and split between lawyers. The remaining balance is never directly paid out in cash, but rather provides 'extra insurance' to the affected customers!

NugginFuts's picture

or the billion dollars is paid when "free checking" becomes "fee checking".

 

VWAndy's picture

 RICO them all.

souljaboy's picture

And here I was thinking it was Thursday.

seabiscuit's picture

These bastards need to be punished again with a bailout. BAIL OUT Bitchez! 

chunga's picture

When national banks behave this way and don't lose their charters we have a Banana Republic.

chosen's picture

Fuck all the big banks.  Take your money out and put it in a community bank or online bank.

VWAndy's picture

 I had a friend that worked there. Scratched him off my list of friends back in 09.

TheNuclearGenie's picture

Wells Fargo is a fine bank with long traditions. They just made a couple of errors, like all businesses do eventually.

jcaz's picture

Yes, "long traditions" of playing outside the lines;

Been a member of ZH for 15 whole weeks, eh Uncle Warren?   

Nobody For President's picture

You forgot the /sarc tag, and so far, 6 idiots fell for it. Bravo!

Do we have a new MDB at his early best, before people started catching on?

One can only hope. 

Edit:

6 is now 10! Double Bravo!

Now 13. Congratulations.

swmnguy's picture

Go back into your bottle.

But I got the joke.  I'm your greenie vote.

malek's picture

Down-voted for extremely poor and unfunny sarcasm.

Ban KKiller's picture

We'll...I'M not shocked, at all. Their attorneys are paid for many reasons. 800,000 reasons!

insanelysane's picture

"It’s reflective of a system that Americans feel is rigged against the little guy, ..."

"It’s reflective of a system that IS rigged against the little guy, ..."  Fixed it for ya.