You might think that I revel in the woes of Big Banks too much, but…
Oh heck I admit it.
But this is fun. Wells Fargo announced today that they have agreed to pay $1.2 Billion to resolve claims against it related to wrongdoing leading up to and during the mortgage crisis. They were accused of engaging in “a regular practice of reckless origination and underwriting” of government-backed loans. Unlike the other Big Banks, they initially chose to fight the prosecution, but eventually decided to settle.
Lest you think this will destroy Wells, however, please note that they earned a net profit of $25 Billion last year, and after the announcement their shares dropped…not at all. In fact, Wells Fargo stock has significantly outperformed the KBW Bank Index for the last year, so their housing-crisis woes do not seem to be hurting them at all.
Still, it’s nice to see them finally taking some responsibility for their role in the housing crisis.
Sources for this story include: