Will Wells Fargo’s “Ghost Accounts” Fiasco Drive Down Their Safety Rating?

Wells Fargo got a slap on the wrist last Thursday, for opening more than 2 million unauthorized deposit and credit card accounts since 2011. Bank employees were secretly opening accounts in order to meet their sales quota. The total fine Wells Fargo will pay? $185 million. A ton of money for an average Joe, but only about a tenth of a percent of the total assets of the bank. That’s a tiny drop in the bucket for a financial institution with $1.7 trillion in total assets.

It’s also quite small compared to fines paid by Wells Fargo in the past, like the $1.2 billion dollars it paid to the U.S. government for not disclosing the poor condition of its FHA (Federal Housing Administration) loans in the years leading up to 2008 housing crash.

The recent scandal, which resulted in the firing of 5,300 employees, surely hurt the bank’s reputation, but from past experiences with such scandals within large banks, it will most likely be forgotten within a few months.

Wells Fargo Bank, National Association, the second largest bank in the country, behind JPMorgan Chase Bank, National Association, currently holds a C+ Weiss safety rating. It has maintained a C rating since the upgrade from a D in 2012. It’s not very likely that such a small loss will affect the bank’s financial safety, therefore, there’s a good chance the rating will remain at the current level.

If you’re looking for a safe bank to entrust with your money, visit our website where you can see all recommended banks, meaning they have a Weiss Safety Rating of B+/A-/A, or A+.

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