Right over the weekend, just out of the news cycle, Wells Fargo & Co reached a “record breaking” $1.2 billion settlement with the U.S. Department of Justice.
The settlement with Wells Fargo, the largest U.S. mortgage lender and third-largest U.S. bank by assets, was filed on Friday in Manhattan federal court. It also resolves claims against Kurt Lofrano, a former Wells Fargo vice president.
According to the settlement, Wells Fargo "admits, acknowledges, and accepts responsibility" for having from 2001 to 2008 falsely certified that many of its home loans qualified for Federal Housing Administration insurance.
Kurt Lofrano was the supervisor of thousands of shit-loan-certifications. So, he gets off pretty easy. The “record-breaking” nature of the settlement is due to the fact that Wells Fargo held out longest. The DOJ hasn’t been particularly hard on any of these banks but since these banks are completely guilty, evidence is so profoundly clear-cut in all of these cases, these trials have amounted to a negotiation of both groups being able to save face while no one goes to prison.
Wells Fargo was served papers for fraud the Los Angeles, California last year. Those charges are that the people towards the bottom, the sales teams, were engaged in fraudulent behavior—victimizing customers. I wonder where those guys learned that from?
No one has been criminally charged in the probes, and the Justice Department reserved the right to pursue criminal charges if it wishes, according to the settlement.
Franklin Codel, president of Wells Fargo Home Lending, in a statement said the settlement "allows us to put the legal process behind us, and to focus our resources and energy on what we do best -- serving the needs of the nation's homeowners."
[My emphasis]
But you don’t do that “best.” You are really not very good at it at all. Some would argue, correctly, that you do it criminally. What Wells Fargo is “best” at, in my estimation, is stealing American citizens’ money.
Wells Fargo on Feb. 3 said the settlement would reduce its previously reported 2015 profit by $134 million, to account for extra legal expenses.
Let’s put that into perspective. Here is Wells Fargo’s 2015 news release of their financial earnings.
▪ Full year 2015: ◦ Net income of $23.0 billion, consistent with 2014 ◦
[...]
▪ Fourth quarter 2015: ◦ Net income of $5.7 billion, stable compared with fourth quarter 2014
Shame.
