Tracking big banks
Last week, financial services giant Wells Fargo agreed to pay $575 million to resolve claims that bank employees opened accounts, transferred funds and completed credit card applications – all without the consent or knowledge of customers.
All 50 states and the District of Columbia filed claims against San Francisco-based Wells Fargo for the alleged actions. New Hampshire Attorney General Gordon MacDonald said the exact amount destined for the Granite State as result of the $575 million claim is about $1.1 million.
According to the bank’s website, Wells Fargo has $1.9 trillion in assets.
That’s right: $1.9 trillion in assets.
Our calculations show that for about 0.03 percent of the company’s assets, Wells Fargo will move on from claims made by all 50 states and Washington, D.C. that its employees created millions of fake accounts.
In a separate matter reported by The Telegraph on Dec. 1, New Hampshire financial regulators imposed a $450,000 fine against New York City-based investment bank Morgan Stanley after one of the firm’s former employees engaged in “excessive trading and other unauthorized activity.”
Wells Fargo and Morgan Stanley are two of the U.S.’s six largest banks, with J.P. Morgan Chase, Bank of America, Citigroup and Goldman Sachs being the others. Their actions, or reported actions, continue to face scrutiny from U.S. Sen. Bernie Sanders, I-Vt.
“No financial institution should be so large that its failure would cause catastrophic risk to millions of Americans or to our nation’s economic well being,” Sanders said in October while introducing legislation that would cap the size of America’s largest financial institutions at $584 billion.
The former and possible future Democratic presidential candidate named each of the six institutions while discussing his legislation.
We are not likely to endorse the plan Sanders promotes, but we find it easy to see why a candidate will have political success by railing against the “big banks.” If Wells Fargo employees did what all 50 states and Washington, D.C. accused them of doing, it seems the bank deserved a more severe punishment than simply paying a fine equal to about 0.03 percent of the company’s value.