Illinois suspends business with Wells Fargo

Wells Fargo (WFC) is losing another big business customer: the state of Illinois.




 
 
Illinois Treasurer Michael Frerichs said Monday that his office is suspending its annual $30 billion in investment activity with Wells Fargo for at least one year. The office oversees more than $1 trillion in annual investment activity, Frerichs says, and Wells Fargo stands to lose “millions of dollars” in investment fees from the action.

“Wells Fargo is a big financial player in Illinois and I hope to send the message that their unscrupulous practices are not welcomed and will not be tolerated,” Frerichs said during a news conference.

The repercussions come in the wake of Wells Fargo’s agreement last month to a $185 million civil settlement for restitution and fines after admitting that employees had opened accounts not authorized by customers. Wells Fargo says it has reimbursed fees incurred and fired more than 5,000 employees.
 

Illinois state Treasurer Michael Frerichs says Wells Fargo will lose millions of dollars in fees after the state suspended $30 billion in investment activity with the troubled bank on Monday.
 
Since that settlement was announced last month, the Labor Department has begun an investigation into the bank’s labor practices.

Also in recent days, Senate and House committees have grilled Wells Fargo CEO John Stumpf and he has agreed to give up $41 million in unvested stock awards following the board of directors’ investigation into the bank’s sales practices. Wells Fargo is one of the nation’s largest banks.

Frerichs’ action follows the proposal Friday from two Chicago aldermen that the city ban doing business with Wells Fargo for the next two years.




 
 
The state will also audit all other business it does with Wells Fargo, Frerichs said.

Last week, California Treasurer John Chiang said the state would suspend several of its key banking relationships for 12 months to sanction the firm following allegations of “fleecing its customers.”

The company didn’t immediately respond to a request for comment.
 

 
Source: www.usatoday.com

Leave a Reply

Your email address will not be published. Required fields are marked *