Happy Thursday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL— Federal bank watchdog charges five former Wells Fargo execs over accounts scandal: The Office of the Comptroller of the Currency (OCC) filed charges against five former senior Wells Fargo executives, seeking $37.5 million in fines over a series of sales scandals dating to the early 2000s.
- The OCC charged five former Wells Fargo consumer banking and compliance officials with violating federal bank regulations and will seek to permanently ban them from the banking industry.
- The bank regulator on Thursday also announced it reached a settlement with former Wells Fargo chief executive John Stumpf, who agreed to pay $17.5 million in penalties and forgo any future management role at a U.S. bank.
“The actions announced by the OCC today reinforce the agency’s expectations that management and employees of national banks and federal savings associations provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations,” said Comptroller of the Currency Joseph Otting. We explain what happened here.
The breakdown: The OCC’s charges are the latest legal blow for Wells Fargo and its former executives over a toxic culture driven by bank brass centered on unrealistic sales targets and high-pressure tactics.
- Wells Fargo admitted to charging customers fees on millions of accounts opened without their consent or sold through misleading tactics.
- The bank has paid billions of dollars in fines and legal settlements since 2016, and is operating under an unprecedented cap on asset growth imposed by the Federal Reserve.
- The OCC’s suit includes the first charges filed against individual Wells Fargo executives related to a series of sales scandals that resulted in the ouster of Stumpf and his replacement, Timothy Sloan.
LEADING THE DAY
Mnuchin: White House working on new tax package to ‘fuel the economy’ The White House is working on a new tax-cut package focused on boosting economic growth, Treasury Secretary Steven Mnuchin said Thursday.
“The president has asked us to start working on what we call ‘tax 2.0,'” Mnuchin said in a CNBC interview in Davos, Switzerland, site of the World Economic Forum. “That will be additional tax cuts that fuel the economy.”
Mnuchin’s comments come after President Trump told The Wall Street Journal earlier this week that he expected a new tax package to be unveiled in the next 90 days.
The catch: Trump said that passage of the proposal would be contingent on him winning reelection this year and Republicans keeping control of the Senate and winning back the House.
Biden, Sanders tax plans would raise less revenue than claimed: Tax proposals from two leading 2020 Democratic presidential candidates, former Vice President Joe Biden and Sen. Bernie Sanders (I-Vt.), would raise less revenue than the campaigns say they would, according to analyses released Thursday by the nonpartisan Penn Wharton Budget Model (PWBM).
PWBM released three analyses Thursday. One looked at Sanders’s wealth tax proposal, and a second looked at Sanders’s proposal to expand the estate tax. The third examined nine tax changes proposed by Biden.
The analyses were released less than two weeks before the Iowa caucuses, and The Hill’s Naomi Jagoda breaks them down here.
SPONSORED CONTENT – PRESENTED BY WELLS FARGO
Rising housing costs are forcing families to sacrifice basic needs like food, health care and education.
Wells Fargo is committing $1 billion in philanthropic giving over the next six years to reduce the cost burden of housing – and help American families move into safe, stable, and affordable homes.
GOOD TO KNOW
- The New York City Council on Thursday voted to ban businesses in the city from only accepting credit, debit or digital payments, amid concerns such policies discriminate against lower-income customers.
- Goldman Sachs CEO David Solomon said Thursday that the powerful investment bank will only finance initial public offerings (IPOs) for companies that have at least one board member who is not a white male.
- The National Treasury Employees Union (NTEU), which represents about 70,000 IRS employees, on Thursday issued a call for more funding for the agency ahead of the tax-filing season.
ODDS AND ENDS
- The alleged hacking of Amazon CEO Jeff Bezos’s phone by Saudi Arabia’s crown prince has alarmed members of Congress and experts, raising fresh concerns about the kingdom’s cyberspace powers.
- Treasury Secretary Steven Mnuchin on Thursday dismissed Greta Thunberg’s call for countries around the world to immediately divest from fossil fuel investments, saying that the teen climate activist should study college economics before making such requests.