Illinois’ chief financial officer is pulling state money out of a disgraced bank.
State Treasurer Michael Frerichs said Monday that his office would stop brokering investments through banking giant Wells Fargo after the bank was fined $185 million for bilking customers out of millions.
Wells Fargo created 2 million fake accounts for unknowing customers, leading to millions in fees since 2011. The tax-dollar shutout will last for one year.
Frerichs told reporters in Chicago that the conduct of Wells Fargo shouldn’t be rewarded with state investments.
“Their illegal actions to meet sales target and compensation incentives are downright shameful,” Frerichs said. “Wells Fargo is a big financial player in Illinois, and I hope to send a message that their unscrupulous practices are not welcomed and will not be tolerated.”
State Sen. Jacqueline Collins, D-Chicago, who is the Senate Financial Institutions Committee chairwoman, said Wells Fargo should have nothing to do with Illinoisans’ tax dollars.
“Treasurer Frerichs has made the right decision in not allowing the investment of taxpayers’ hard-earned money to enable corporate irresponsibility on the backs of the middle class.”
The State Treasurer’s Office oversees more than $1 trillion in investment activity annually, approximately $30 billion of which is brokered by Wells Fargo.
Frerichs said this will cost the bank millions, but couldn’t provide an exact number. The treasurer is recommending that the Governor’s Office and State Board of Investments also drop their business with Wells Fargo.
An official with Gov. Bruce Rauner’s office said the state will not be doing any bond deals with Wells Fargo until further notice.
–Illinois News Network