Financial institutions have brought better living to people around the world for hundreds of years. Without the wonder of currency, modern society likely wouldn’t have online shopping, supermarkets, or any other wide-open stores with countless products, as we’d still be operating on the bartering system, trading cows for cheese, and stuff.
However, because the largest financial institutions in the United States of America serve a majority of the country’s population, they possess a great deal of power that has effectively made the class of them impervious to failure.
Take, for example, the 2008 financial crisis. After the largest banks in the United States had lent billions of dollars to underqualified prospective homeowners in the form of mortgages, many borrowers began defaulting on their housing payments, resulting in a market-wide financial crisis that came closer to rivaling the Great Depression of the 1920s than any recession in the United States since that happened just short of 100 years ago.
Wells Fargo & Company was one of them
Wells Fargo & Co., often shortened to nothing more than “Wells Fargo,” began making headlines about two years ago for all the wrong things. Just yesterday, on Friday, April 13, 2018, Wells Fargo executives made public that the two regulating governmental bodies – the CFPB, or the Consumer Financial Protection Bureau, and the OCC, or the Office of the Comptroller of the Currency – responsible for the bank’s oversight will soon demand roughly $1 billion to resolve countless problems with its customers’ accounts.
Here’s how that one-billion-dollar manifestation started out
On September 8, 2016, the aforementioned CFPB, together with the OCC and the Los Angeles City Attorney, billed a fine of $185 million to Wells Fargo for its wrongful opening of a whopping 2 million customer accounts, both credit cards and checking or savings accounts – customers that already had accounts at Wells Fargo – throughout the four-year period beginning in May 2011 and rounding up in July 2015.
About 5,300 employees were fired from the ranks of Wells Fargo for wrongfully opening up accounts, the sole purpose of which was to boost the reported financial performance of Wells Fargo, all in an attempt to yield more investments from investors and steal consumers’ business from other banks.
According to economic and financial analysts, the $1 billion fine is slated to be one of the largest in all of consumer financial services market history.