Wells Fargo may have committed $110 million to settle its sordid fake accounts scandal, but this chapter appears to be far from over – and the bank will have even more fights on its hands in the coming months.
Reports surfaced that the proxy advisory firm Institutional Shareholders Services (ISS) is recommending that Wells Fargo shareholders vote to remove 12 members of the bank's board of directors. ISS says lax corporate governance oversight contributed to the fabrication of at least 2 million consumer credit card and savings accounts.
The recommendations from ISS came a few days after another proxy adviser, Glass Lewis and Co., suggested in a shareholder resolution that six board members be replaced after they were accused of overlooking the scandal’s potential risks for the bank’s reputation.
ISS also urged shareholders to vote yes on another resolution that would require the bank to disclose how its involvement in the Dakota Access Pipeline could have an impact on Native American communities and traditional lands.
Wells Fargo has vigorously defended its involvement in the controversial pipeline, insisting it is not the lead bank for the project -- and that its business involvement “will continue to support our customers on both sides of the issue.”
Opponents of the pipeline retort that any amount of investment, including Wells Fargo’s reported $120 million stake in the project, is too much when considering the risks of damage to both local communities and the environment.
The lingering effects of Wells Fargo’s fake accounts scandal, as well as its investment in the Dakota Access Pipeline, prompted some municipal leaders to urge their cities to sell off their holdings in the banking giant.
Last month, five members of the Washington, D.C. City Council introduced a resolution urging the city to sever any ties with Wells Fargo. Those council members also mentioned Wells Fargo’s policy of lending to prison lenders, another business interest that has increasingly been the focus of activists who oppose the bank’s lending policies.
Additional cities that have either divested or are considering ending their relationships with Wells Fargo include Seattle; Missoula, Montana; Ashville, North Carolina; and Los Angeles. Two additional California cities, Davis and Santa Monica, ended their banking contracts with Wells Fargo after details of the fake accounts scandal emerged last fall.
Meanwhile, accusations of how the company treated whistleblowers who raised awareness about onerous sales quotas and the fake accounts scandal continue to paint an unflattering portrait of Wells Fargo.
As CNNMoney reported last week, one Southern California retail branch manager called the company’s confidential ethics hotline to document what she believed to be unethical behavior – only to be fired last September after the company accused her of abusing alcohol.
Federal prosecutors said the bank may have also violated Occupational Health and Safety Administration, Sarbanes-Oxley and Dodd-Frank laws when she was terminated, and also indicated that Wells Fargo may have to hire back its former employee.
Image credit: Ken Lund/Flickr
Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.
Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.