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Wells Fargo: Illinois Suspends Doing Business With Bank Amid Scandal

Image: Wells Fargo: Illinois Suspends Doing Business With Bank Amid Scandal

A woman walks past a Wells Fargo ATM in Pasadena, California, on Sept. 28, 2016. (Frederic J Brown/AFP/Getty Images)

By    |   Tuesday, 04 Oct 2016 06:21 AM

Illinois has suspended business with Wells Fargo in the wake of the company's scandal regarding 2 million potentially fake accounts, state treasurer Michael Frerichs announced Monday.

The one-year moratorium on $30 billion of investment activity includes suspending investments in Wells Fargo debt securities and use of the bank as a broker/dealer for investment purchases, The Wall Street Journal reported. The state also will conduct an audit into whether the bank has followed Illinois law on returning unclaimed property to consumers.

The decision follows a similar announcement last week by California Treasurer John Chiang.

U.S. and California regulators have fined Wells Fargo $185 million related to the scandal, the Los Angeles Times reported. The company also has fired more than 5,000 employees in the wake of the scandal.

The Times called the two states restrictions' "largely symbolic," noting that they likely would cost the bank only a few million dollars in fee income, compared with the $22 billion in revenue it reported for its most recent quarter.

“Wells Fargo is a big financial player in Illinois,” Frerichs said on Twitter. “I hope to send a message that their unscrupulous practices will not be tolerated.”

He also called the bank's behavior "downright shameful," the Wall Street Journal reported.

The bank could face more public backlash. New York’s Metropolitan Transportation Authority is reviewing MTA bond deals related to the scandal, according to the WSJ, and a Chicago city council committee on Wednesday will review a proposal by Alderman Edward Burke for a two-year moratorium to keep the city from doing business with Wells Fargo, Bloomberg reported.

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Illinois has suspended business with Wells Fargo in the wake of the company's scandal regarding 2 million potentially fake accounts, state treasurer Michael Frerichs announced Monday.
illinois, wells fargo, business, suspended
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2016-21-04
Tuesday, 04 Oct 2016 06:21 AM
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