Latest news with #Gramm-Leach-BlileyAct
Yahoo
5 days ago
- Business
- Yahoo
Fed loosens the shackles on Wells Fargo nearly a decade after fake accounts scandal
The Federal Reserve is loosening a major restriction on Wells Fargo (WFC) that was put in place following a fake accounts scandal nearly a decade ago, as the fourth-largest US bank will no longer have to operate under a $1.95 trillion asset cap. The move was a victory for CEO Charles Scharf, who said when he took over the top job in 2019 that his "first priority" was to clean up the messes left by his predecessors. 'The Federal Reserve's decision to lift the asset cap marks a pivotal milestone in our journey to transform Wells Fargo," he said in a release. Wells Fargo's stock climbed as much as 4% in after hours trading. Its stock has climbed more than 50% during Scharf's tenure as CEO. The lifting of the cap will help Scharf go on the offensive as he tries to make Wells Fargo into a major investment banking player, edging deeper into a hyper-competitive business where it lags behind Wall Street giants like Goldman Sachs (GS), JPMorgan Chase (JPM), and Morgan Stanley (MS). The Fed imposed the broad restriction as part of a wider consent order in 2018, citing "widespread consumer abuses" at Wells Fargo after federal investigations revealed a wide ranging sales practice scandal in 2016. It couldn't go past the $1.95 trillion in assets it had at the end of 2017 unless regulators said so. "The removal of the growth restriction reflects the substantial progress the bank has made in addressing its deficiencies and that the bank has fulfilled the conditions required for removal of the growth restriction," the Federal Reserve said in a press release. The other provisions in the 2018 enforcement action still remain in place until the bank satisfies the requirements for their termination. Scharf has now ticked off 13 consent orders that regulators had in place when he became boss, seven of which have been lifted this year. "We are a different and far stronger company today because of the work we've done," he added in a release. "We are excited to continue to move forward with plans to further increase returns and growth in a deliberate manner supported by the processes and cultural changes we have made.' In more recent months Scharf and the rest of Wells Fargo's current management team have tried to play down any expectation for an immediate earnings boost once the asset cap is removed. "I would just caution that when it does happen, it's not this kind of light switch moment,' CFO Mike Santomassimo said while speaking at a UBS conference as far back as March 2024. Even with its biggest disciplinary penalty lifted, Wells Fargo still faces other disciplinary actions from regulators. Along with the remaining 2018 Fed consent order, Wells Fargo has a agreement with the OCC that states the bank violated part of the Gramm-Leach-Bliley Act. It also still has a formal agreement with the OCC from last year where its regulator identified "deficiencies" in the bank's anti-money-laundering controls. Fed governor Michael Barr, who recently departed as the Fed's top banking cop, made it clear in a statement that regulators will continue to keep a close eye on the bank. "Removal of the asset cap represents successful remediation to the required standard based on focused management leadership, strong board oversight, and strict supervision holding the firm accountable," he said. "All three will need to continue for the firm to have a sustainable approach." David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-05-2025
- Business
- Yahoo
‘Beyond the pale': Atlanta ‘phantom debt collector' pressured people into paying him for debts they didn't owe
Having debt is never fun. And when a representative from a lender calls you asking for the amount you owe, your nerves may get the best of you. But what if you're being harassed? Worse yet, for a debt you don't really owe? Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Kenneth Redon III, a former debt collector who owned Global Circulation, Inc. (GCI), has been barred for life from the debt collection business after harassing a number of individuals to pay debts that didn't exist, according to a Federal Trade Commission (FTC) release. But this isn't a new scam. Back in 2023, Sherrel Dunn was a victim of the same scheme. 'You just feel violated,' she told WSB-TV. 'You feel helpless.' According to the FTC release, Redon 'threatened consumers with jail time, lawsuits, and wage garnishments to pressure them into paying debt they didn't actually owe.' WSB-TV spoke to FTC Senior Attorney Gregory Ashe about the tactics Redon used. In addition to assuming a number of false names, he also called his victims multiple times a week, sometimes calling several times a day. Ashe also said 'in many instances [Redon] had some forms of the consumer's personal information. And so they would say, 'is this not the last four digits of your Social Security number?'' Redon's company allegedly claimed the business was affiliated with certain lenders to further trick borrowers into paying their phantom debts. The FTC's release also states it filed a temporary restraining order against GCI and said Redon violated parts of the Fair Debt Collection Practices Act (FDCPA) and the Gramm-Leach-Bliley Act. Under the FTC's proposed order, GCI and Redon also have a monetary judgment of $9,684,338 imposed, but this will be suspended once any remaining assets are turned over. However, if Redon and his company are found to have misled or lied about their business finances, then the judgment remains in effect. 'Using a playbook of intimidation and threats of jail time to coerce consumers into paying debts that they don't owe is beyond the pale,' said Christopher Mufarrige, director of the FTC's Bureau of Consumer Protection in the same press release. 'The FTC will not hesitate to act against phantom debt collectors to shut down their operations.' Read more: This is how American car dealers use the '4-square method' to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs The Consumer Financial Protection Bureau says the Fair Debt Collection Practices Act prevents debt collection companies from contacting you during certain hours. They are forbidden from abusing, harassing or making misleading statements to individuals who owe debts. As an example, a debt collector is not allowed to call or contact you repeatedly, especially with the intention of threatening or annoying you. Debt collectors are required to identify themselves and can't call before 8 a.m. or after 9 p.m. If you're on the phone with a debt collector or have received a letter, you have a right to know how much you supposedly owe and what the debt is for. You can also dispute the debt or verify whether the debt is actually yours. Even if the debt is legitimate, you still have a right to take some space and ask the debt collector to stop contacting you. That doesn't mean you don't owe the debt, though, they'll just take another legal approach. A major red flag is if a debt collector refuses to tell you the name of the lender you allegedly owe, or if the collector is vague about their own identity or the amount owed. Get as much information as you can in writing to ensure the claim is real. If someone calls you and refuses to provide written documentation, then they're most likely a scammer. Remember, you have the right to ask the debt collector for information about the original lender, assuming the debt was transferred to another company. If a person calls you saying that they are a collector and tries to threaten you or to confirm sensitive information (like your Social Security number), hang up and contact the alleged debt collection company yourself to see if it's legitimate. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Yahoo
29-04-2025
- Business
- Yahoo
Wells Fargo clears 12th consent order; 2 remain
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. The Consumer Financial Protection Bureau has terminated its 2018 consent order against Wells Fargo, leaving two yet to be resolved, including the Federal Reserve's asset cap, the bank announced Monday. This marks the 12th consent order closed by Wells Fargo since 2019, and the sixth resolved this year. 'Today's termination, along with the recent closure of other consent orders, demonstrates that we have completed much of our common risk and control infrastructure work, including work that is required by other orders,' Wells CEO Charlie Scharf said in a statement Monday. 'I am proud of the work done by our teams and remain confident that we will complete the work needed to close our other open consent orders. Wells Fargo is a different and stronger company today as we focus on creating long-term value for our customers, clients, communities and shareholders.' The terminated order concerns the bank's compliance risk management program. The Office of the Comptroller of the Currency terminated a similar order in February – clearing up a multiagency complaint associated with a single issue. Analysts are viewing the lifting of the CFPB consent order as a signal that the Fed's asset cap might be lifted sooner rather than later. 'The biggest consent order investors are expecting to be lifted is the Federal Reserve's 2018 cease and desist order that has the asset cap linked to it,' analysts at Royal Bank of Canada wrote in their research note Monday. 'In view of the six consent orders being lifted this year and Treasury Secretary [Scott] Bessent's commentary regarding loosening the regulatory 'corset' around the banking system, we believe the Federal Reserve's 2018 order could be lifted in the 2Q25 and possibly real soon.' Meanwhile, Piper Sandler analysts noted the 'increasingly rapid resolution pace' of Wells orders and linked improved compliance and risk management to the potential lifting of the asset cap, adding that regulators now appear comfortable with the bank's approach. A Wells spokesperson, however, declined to comment on the asset cap. The other remaining consent order dates to 2015 regarding Gramm-Leach-Bliley Act violations and was brought by the OCC, the spokesperson confirmed. Wells Fargo also has a formal agreement (an enforcement action, but not a consent order), issued by the OCC last September, related to the bank's anti-money laundering efforts, the spokesperson added. The OCC, for its part, disclosed Friday it has settled with two former Wells Fargo auditors in connection with the lender's nearly decade-old sales practice misconduct. The OCC issued a $100,000 civil penalty against David Julian, former chief auditor, and a $50,000 civil penalty against Paul McLinko, former executive audit director at the bank, and personal cease-and-desist orders to both former executives. The order resolves a 2020 investigation by the OCC that engulfed several Wells executives in the 2016 scandal in which members of the bank's sales team enrolled customers in services and products without their knowledge to meet certain incentives. The OCC asserted Julian failed to plan and manage audit activity that would detect and document sales practices misconduct. Further, Julian failed to adequately escalate the sales practices misconduct, the regulator said in January, when it initially fined the ex-executive $7 million. The OCC handed McLinko a $1.5 million fine in January on similar grounds, additionally citing his failure 'to maintain professional independence from the Community Bank.' Wells Fargo declined to comment on the OCC's settlement with Julian and McLinko. Recommended Reading Wells Fargo clears 10th consent order; 4 remain
