Wednesday, July 20, 2011


Fed fines Wells Fargo over US subprime mortgages
WASHINGTON — The US central bank slapped Wells Fargo with an $85 million fine on Wednesday for allegedly "deceptive" practices in selling subprime mortgages before the financial crisis.
The Federal Reserve said its fine against Wells Fargo -- the second-largest US bank in terms of deposits -- was the biggest penalty it has imposed on a bank for consumer-protection violations.
It was also the first action taken by a US bank regulator over unsavory sales tactics in which banks duped borrowers into taking out costly subprime loans during the US housing boom, the Fed said in a statement.
The Fed's penalty was due to alleged actions taken between 2004 and 2008 by Wells Fargo Financial, a subsidiary of the bank which is no longer active.
"Sales personnel steered borrowers who were potentially eligible for prime interest rate loans into loans at higher, subprime interest rates, resulting in greater costs to borrowers," the Fed said.
The employees also "falsified information about borrowers' incomes to make it appear that the borrowers qualified for loans when they would not have qualified based on their actual incomes."
Wells Fargo Financial's failure to rein in its salespeople constituted "unfair or deceptive" practices, the central bank said.
San Francisco-based Wells Fargo did not admit wrongdoing, but pledged to strengthen internal controls over its lending practics.
"The alleged actions committed by a relatively small group of team members are not what we stand for at Wells Fargo," Wells Fargo chairman and chief executive John Stumpf said in a statement.
Before the collapse of the US housing market in 2007 and 2008, lenders sold billions of dollars' worth of risky subprime mortgages, often to poorly qualified borrowers.
The subprime mortgages were bundled into complex mortgage-backed securities which were resold to investors. A plunge in the value of such securities led to the global financial crisis in late 2008.

Fed fines Wells Fargo over US subprime mortgages

AFP - ‎33 minutes ago‎
WASHINGTON — The US central bank slapped Wells Fargo with an $85 million fine on Wednesday for allegedly "deceptive" practices in selling subprime mortgages before the financial crisis. The Federal Reserve said its fine against Wells Fargo -- the ...

Wells Fargo's big mortgage ripoff

Fortune - Colin Barr - ‎46 minutes ago‎
What do you have to do to get slapped with the Federal Reserve's biggest-ever consumer-protection fine? You have to rip off mortgage borrowers by the thousand. The Fed alleges Wells Fargo (WFC) did just that ...

Wells Fargo to pay $85M over mortgage abuses

USA Today - Michael Winter - ‎1 hour ago‎
To settle civil charges, Wells Fargo will pay an $85 million fine and compensate borrowers for allegedly falsifying loan documents and steering some borrowers to higher-interest subprime mortgages, the Associated Press says ...

Wells Fargo settles mortgage-abuse case for $85M

Newsday (subscription) - ‎2 hours ago‎
News Newsday > News Content Preview Newsday/Optimum Online ® subscribers click here for full access Not a Newsday or Optimum Online ® subscriber? Click here Wells Fargo settles mortgage-abuse case for $85M Originally published: July 20, ...

Wells Fargo Settles Allegations with Federal Reserve Regarding Former Business ...

MarketWatch (press release) - ‎2 hours ago‎
SAN FRANCISCO, Jul 20, 2011 (BUSINESS WIRE) -- Wells Fargo & Company /quotes/zigman/239557/quotes/nls/wfc WFC +1.02% announced today an agreement with the Board of Governors of the Federal Reserve that resolves allegations arising from an investigation ...

Fed hits Wells Fargo with $85 mln mortgage penalty

Reuters - Margaret Chadbourn - ‎2 hours ago‎
WASHINGTON, July 20 (Reuters) - The Federal Reserve said on Wednesday that Wells Fargo & Co (WFC.N) agreed to pay $85 million in a civil penalty and will compensate prime borrowers who were allegedly steered into more costly subprime loans. ...

Wells Fargo settles mortgage-abuse case for $85M

The Associated Press - ‎3 hours ago‎
WASHINGTON (AP) — Wells Fargo & Co. has agreed to pay $85 million to settle civil charges that it falsified loan documents and pushed borrowers toward subprime mortgages with higher interest rates during the housing boom. The fine is the largest ever ...

Wells Fargo plans more cost cutting - profit up

San Francisco Chronicle - Dakin Campbell - ‎17 hours ago‎
Wells Fargo & Co.'s stock price climbed the most since November as its profit rose to a record level and it announced a goal of cutting $1.5 billion in quarterly costs by the end of next year. Wells Fargo shares advanced 5.7 percent as executives ...

Wells Fargo earns $3.95 billion in second quarter

San Francisco Chronicle - ‎17 hours ago‎
Paul Sakuma / AP That's how much Wells Fargo earned in the second quarter, a record for the San Francisco bank. Not everything is rosy, however. Business is slow, with revenue down 4.7 percent from a year earlier. The company said Tuesday that it ...

BofA, Wells Fargo quarterly earnings in sharp contrast

Los Angeles Times - ‎18 hours ago‎
Mortgage problems trigger a net loss of $8.8 billion for Bank of America in the second quarter. Wells Fargo, on the other hand, posts a record profit of $3.9 billion. A security guard walks past the Bank of America's corporate headquarters in Charlotte ...

Weak Recovery Weighs on Bank of America and Wells Fargo

New York Times (blog) - Eric DashBen Protess - ‎20 hours ago‎
Even as the big banks stanch their losses, they are reckoning with an unfortunate reality: the anemic recovery is hurting their results. Second-quarter numbers on Tuesday from the nation's two biggest consumer lenders, Bank of America and ...

Goldman Sachs' profit disappoints investors

Houston Chronicle - ‎21 hours ago‎
AP NEW YORK — Goldman Sachs more than doubled its profits last quarter, to $1.05 billion, but even that wasn't enough to satisfy its investors. The results announced Tuesday came in well below what analysts were expecting because of a sharp drop in ...

Wells Fargo posts record quarter profit of $3.73 billion, topping Wall Street view

San Jose Mercury News - George Avalos - ‎22 hours ago‎
Wells Fargo reported record earnings Tuesday, but confronted by an erosion in revenue, the giant bank disclosed it has embarked on a cost-cutting push likely to eliminate jobs. San Francisco-based Wells Fargo earned $3.73 billion in ...

Bank Boon: Business Loans?

Wall Street Journal - David Benoit - ‎Jul 19, 2011‎
Even with the economy stuck in neutral, three of the nation's biggest lenders—Bank of America Corp., Wells Fargo & Co. and KeyCorp—are sounding more hopeful that businesses are accelerating their borrowing. The trio of banks reported ...

Wells Fargo looks to cut costs by 12% by end 2012

MarketWatch - Matthias Rieker - ‎Jul 19, 2011‎
NEW YORK (MarketWatch) -- Wells Fargo & Co. /quotes/zigman/239557/quotes/nls/wfc WFC +1.76% Chief Financial Officer Timothy Sloan told investors to expect steady--rather than swift-- progress in the San Francisco-based bank's mission ...

Wells Fargo Profit, Revenue Increase

Bloomberg - Dakin Campbell - ‎Jul 19, 2011‎
Wells Fargo & Co. posted a 29 percent increase in second-quarter profit that beat analysts' estimates. Wells Fargo & Co. posted a 29 percent increase in second-quarter profit that beat analysts' estimates. Photographer: Jin Lee/Bloomberg Wells Fargo ...

Wells Fargo, Coca-Cola, BofA Are Big Market Movers

ABC News - ‎Jul 19, 2011‎
Wells Fargo & Co., up $1.53 at $28.41 Quarterly profit rose 30 percent. The number of uncollected loans and credit card bills dropped sharply. The beverages maker sold more drinks around the world and offset higher ingredients costs by raising some ...

U.S. banks project lower debit card fee losses

Reuters - Joe RauchDavid Henry - ‎Jul 19, 2011‎
CHARLOTTE, North Carolina (Reuters) - Two of the largest US consumer banks said on Tuesday they expect new limits on debit card fees to have less of an impact than originally projected, after regulators softened the rules. ...

Wells Fargo reports $3.7 billion profit

Boston Herald - Kirsten Valle Pittman - ‎Jul 19, 2011‎
CHARLOTTE, NC — Wells Fargo & Co. reported record second-quarter profits today, citing higher revenue, more loans and lower expenses. The San Francisco-based bank, which bought Charlotte's Wachovia in ...

Earnings Miss Hits Goldman Sachs Bonds, Too

Forbes (blog) - Andrew Wilkinson - ‎Jul 19, 2011‎
Equity prices went up and bond prices fell as investors were slightly reassured by crumbs of comfort tossed from the table by European officials ahead of a meeting on Thursday out of which many hope for groundbreaking news on sovereign debt crisis. ...

On the Call: Wells Fargo CEO John Stumpf - ‎Jul 19, 2011‎
AP NEW YORK — The growth of its credit card business helped Wells Fargo & Co. post a 30 percent jump in second-quarter profit on Tuesday. While its cards are still a tiny part of the overall credit card market — one industry expert puts Wells as the ...

Wells Fargo Bucks the Trend in Financials: Shares Rising

Barron's (blog) - Avi Salzman - ‎Jul 19, 2011‎
Wells Fargo (WFC) is proving to be the big winner among financial stocks today, as the rest of the sector is mostly trading flat to slightly down today. Shares jumped 3.6% in early afternoon trading. Wells Fargo posted 70 cents of EPS, ...

Fresh blow for banks over US totals

The Independent - ‎Jul 19, 2011‎
The banking sector suffered another blow today after two of the US's financial giants reported worse than expected profits. Investment bank Goldman Sachs earned 1.05 billion US dollars (£653 million) in its second quarter, which was more than twice the ...

Wells Fargo posts record quarter profits of $3.73 billion, topping Wall Street ...

San Jose Mercury News - George Avalos - ‎Jul 19, 2011‎
Wells Fargo powered to record earnings that topped Wall Street's predictions, partly due to lower mortgage losses, which allowed the bank to set aside less to cover sour loans, the bank reported Tuesday. San Francisco-based Wells Fargo ...

All's Well With Wells Fargo: Profits Up 29% To $3.9B

Forbes (blog) - Steve Schaefer - ‎Jul 19, 2011‎
Wells Fargo topped Wall Street's consensus forecast by a penny with its second-quarter earnings per share of 70 cents Tuesday. The bank reported net income of $3.9 billion on $20.4 billion in revenue during the April-June period,...

Summary Box: Wells Fargo 2Q profit up 30 pct

Forbes - ‎Jul 19, 2011‎
AP , 07.19.11, 10:53 AM EDT PROFIT UP: Wells Fargo & Co. posted a 30 percent jump in its second-quarter profit to $3.73 billion, or 70 cents per share. IMPROVING LOANS: Loans written off as uncollectible, known as charge-offs, dropped for the sixth ...

Wells Fargo Profit Jumps 29% on Lower Loan Losses

Wall Street Journal - Matthias RiekerTess Stynes - ‎Jul 19, 2011‎
NEW YORK—Wells Fargo & Co.'s second-quarter earnings rose 29%, amid falling loan losses and strong demand for business loans. "While the economic recovery continues to be slower than expected, there are signs that ...

Wells Fargo profit surges in second quarter - ‎Jul 19, 2011‎
Wells Fargo said today that its profits grew 30% in the second quarter compared to the same time last year. Wells Fargo, the second-largest bank in the US in terms of deposits, said today that its profits grew 30% in the second quarter compared to the ...

Wells Fargo Earns $3.9 Billion, Up 29%

New York Times - Eric Dash - ‎Jul 19, 2011‎
Joe Mahoney/The Richmond-Times Dispatch, via Associated PressA Wells Fargo sign in Richmond, Va. Wells Fargo, the nation's biggest consumer bank, said profit rose 29 percent in the second quarter from the period a year earlier as loan ...

UPDATE 2-Wells Fargo profit rises, beats estimates

Reuters - David HenryJohn Wallace - ‎Jul 19, 2011‎
NEW YORK, July 19 (Reuters) - Wells Fargo & Co (WFC.N), the fourth-largest US bank by assets, posted a higher quarterly profit, beating analysts' estimates, as it dipped into funds previously set aside for bad loans. The San Francisco-based company ...

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