New York Times: Punishing Wells Fargo: Just dessert, or beating a dead horse?

New York Times, April 19, 2018: Punishing Wells Fargo: Just dessert, or beating a dead horse?

Wells Fargo investors got yet another jolt of bad news on Thursday with the disclosure that regulators are poised to impose a $1 billion penalty on the bank for infractions related to mortgage rate extensions, auto loans, risk compliance and other matters.

That comes on top of the $4.25 billion the bank set aside last year for liabilities related to its fake accounts scandal and the mortgage-backed securities issues it had before the financial crisis. It also paid a fine of $185 million in 2016 over the accounts scandal.

In February, the Federal Reserve ruled that the bank could not expand its balance sheet beyond the nearly $2 trillion in total assets that it reported at the end of 2017; it’s believed to be the first time the Fed has imposed such a curb on growth at a major bank.

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p class=”story-body-text story-content”>But with the new $1 billion penalty, which is expected to be announced as soon as Friday, even I have to wonder: Has Wells Fargo been punished enough?

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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