On her way out the door of the Fed, Janet Yellen gave Wells Fargo a well-deserved kick in the pants. Yellen’s last day in office was Friday, and the Federal Reserve announced that day that it is restricting Wells Fargo’s growth and demanding the replacement of four board members in response to “widespread consumer abuses and compliance breakdowns,” according to NPR.
The punishment sounds harsh, but considering that Wells Fargo opened up as many as 3.5 million fake bank accounts and credit cards, sold unneeded auto insurance to 570,000 customers, and allegedly fired anyone who reported the unethical behavior, it’s pretty fitting.
“We cannot tolerate pervasive and persistent misconduct at any bank,” Yellen said in a statement. “The consumers harmed by Wells Fargo expect that robust and comprehensive reforms will be put in place to make certain that the abuses do not occur again.”
In addition to these new penalties, Wells Fargo has already paid a $185 million fine, was hit with a well-deserved $142 million class-action lawsuit, and said adieu to CEO John Stumpf. In addition, it will have to have a third-party review of its risk compliance plan to make sure this nonsense and abuse of power never happens again. Unless the Trump Administration’s incoming Fed chief decides to overrule the penalty, of course.