• U.S.

Chicago Suspends Business With Wells Fargo Over Fraudulent Accounts Scandal

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The Chicago City Council approved on Wednesday a one-year freeze on city business with Wells Fargo over the bank’s fraudulent accounts scandal.

Chicago joins the states of Illinois and California in punishing Wells Fargo over the scandal, Reuters reports. In September, Wells Fargo agreed to pay $190 million in penalties and customer fees after staffers opened bogus accounts without the knowledge of its customers.

The city will suspend Wells Fargo banking services including bond underwriting and brokerage, according to Reuters. Chicago has payed the bank $19.5 million in fees since 2005.

“I hope this action by the city of Chicago will echo around the nation and make it clear to other institutions this conduct is unacceptable,” said Alderman Edward Burke, head of the the city council’s finance committee.

Illinois suspended $30 billion in state investment activity with the bank on Monday, while California declared a 12-month sanction against Wells Fargo in late September.


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