Amid the heated-up news steam about the FTX drama, Ripple CEO Brad Garlinghouse hastried to turn the public’s attention to another case regarding the misdeeds of traditional finance. A $3.7 billion fine for mismanagement at Wells Fargo bank was treated as, in Garlinghouse’s words, “barely a blip on the radar.”
Ripple CEO expressed his concern with the lack of public attention to the Wells Fargo case in his Twitter post on Dec. 21:
The world is (appropriately) outraged by SBF and FTX’s fraud, but when Wells Fargo mismanages billions in customer funds as well, it’s barely a blip on the radar. Food for thought…. pic.twitter.com/uHnumn4Ryi
— Brad Garlinghouse (@bgarlinghouse) December 21, 2022
On Dec. 20, the United States Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo to pay more than $2 billion in redress to consumers, as well as a $1.7 billion civil penalty. According to the CFPB, the bank’s conduct led to billions of dollars in financial harm to its customers and cost thousands of customers their vehicles and homes.
Over several years Wells Fargo systematically charged its customers with ill-assessed fees and interest charges on auto and mortgage loans, unlawful surprise overdraft fees and incorrect charges to checking and savings account. There are 16 million affected customers in the case.
In his statement, CFPB Director Rohit Chopra said:
“Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families. The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender.”
It wasn’t the first time one of the biggest banks in America broke the law and harmed customers. In 2016, Well Fargo — which has a market capitalization of $156.6 billion — was fined $185 million by CFPB for creating millions of fraudulent savings accounts on behalf of its clients without their consent. In2020, Wells Fargo agreed to pay $3 billion to resolve its potential criminal and civil liability for this activity.