The city of Minneapolis began the process of dumping Wells Fargo last week when the city council voted unanimously to study what it’ll take to move to a publicly owned bank, or establish its own.
Councilwoman Alondra Cano happened to make it about the Dakota Access Pipeline -- the issue of the day that has been bringing protesters to Wells Fargo buildings, bent on preventing employees from getting to work.
Wells Fargo has $467 million invested in the pipeline when Minneapolis prefers to “create a more sustainable future,” Cano said, meaning the two should go their separate ways.
She also mentioned, almost as an afterthought, that it actually wasn’t so long ago that the bank was caught opening 2 million fake accounts for clients without their knowledge. It fired some 5,000 low-ranking employees under intense pressure to make sales. CEO John Stumpf walked away with $130 million.
Shortly after, in the midst of plummeting stocks, Wells Fargo released a groveling TV commercial featuring a slow-motion stagecoach and voiceover begging customers to trust it with their money again.
But it now appears the bank was running additional scams. Employees may have also been signing up Spanish-speaking clients for insurance policies without their consent, even going so far as withdrawing monthly premiums from their bank accounts, according to a lawsuit filed by three whistleblowers in New Jersey.
In a partnership with Prudential, Wells Fargo bankers had been incentivized to nudge customers toward signing up for life insurance.
When news broke in September that bankers were creating fraudulent accounts for their own clients, Prudential assigned investigators to see if the same shenanigans were occurring with the insurance policies. They found that a suspicious abundance of Spanish speakers had been calling Prudential, complaining about insurance policies they hadn’t signed up for.
According to the whistleblower suit, the evidence was pretty obvious. Most of the insurance policies that Wells Fargo bankers sold lapsed after one or two months, only to be reopened, closed again, and reopened. Prudential didn’t make any money from those accounts, but the bankers got credit for making sales.
When they went to Prudential with the bad news, the investigators were fired. So they sued, and now everyone gets to smell the dirty laundry.
Wells Fargo and Prudential are both investigating.
Minneapolis is part of a growing movement of cities around the country, including San Francisco, Los Angeles, Philadelphia, Chicago, and Seattle, that are considering severing ties with Wells Fargo largely because of two reasons: the Dakota Access Pipeline, and the millions of sham accounts.
In some cases, Wells Fargo has been portraying the threat of divestment as a very difficult thing to carry out, says Jeff Ordower of Forego Wells, a watchdog organization.
"What's interesting and innovative about this, and certainly Minneapolis and folks in Philadelphia are a part of this too, is the fact that while Wells is bad, lots of these banks are band, and cities are losing millions and millions of dollars in horrible deals with Wall Street," Ordower says. "So [divestment] is often twinned with, 'Well how do you feel about developing public banks so cities aren't getting ripped off by Wall Street?'"
Other ways in which cities have sanctioned Wells Fargo include temporarily suspending it from city business, allowing its contracts to expire with renewal, and toughening responsible banking ordinances so that the bank could not meet bidding requirements in its current state.