Federal Reserve Shackles Wells Fargo After Fraud Scandal<br />The central bank blasted Wells Fargo’s board for failing to oversee the bank, and it announced<br />that the company would replace four members of its 16-person board by the end of the year.<br />The move, taking place on Janet L. Yellen’s last working day as the central bank’s chairwoman, is all the more extraordinary because it comes at a time when federal banking regulators appointed by President Trump are working vigorously to relax rules<br />that were imposed in the years following the financial crisis.<br />The decision by the Fed, one of the San Francisco-based bank’s main regulators, follows revelations over the last two years<br />that Wells Fargo had deceived its customers by opening dummy accounts in their names and forcing some to take out unnecessary auto insurance.<br />On a conference call with analysts and investors Friday night, Wells Fargo’s chief executive, Timothy J. Sloan, said the Fed’s actions related to past conduct<br />that the bank was already taking steps to fix and that they did not affect the bank’s financial condition.<br />“I don’t remember the last time the board has ever done anything quite as dramatic as that,” said Evan Stewart,<br />a regulatory lawyer at the law firm Cohen and Gresser, referring to the Federal Reserve Board.<br />I will cut Regs but make penalties severe when caught cheating!”<br />Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported,<br />but will be pursued and, if anything, substantially increased.
