History doesn’t repeat, the oft-quoted investment axiom goes, but it rhymes.
It’s been a little more than a year since the Consumer Financial Protection Bureau announced it would fine the country’s largest bank mortgage issuer $185 million for opening millions of bank and credit card accounts customers didn’t want, drawing national attention to the issue. The Wells Fargo scandal has tarnished the bank’s reputation, led to a corporate credit rating downgrade, and cost the company additional millions in fines and possible restitution.
But it hasn’t cost Wells Fargo shareholders much. Shares have not performed as well as the overall S&P 500 stock index, but they’ve risen.
The company has replaced its CEO, and the new boss is scheduled to appear before the Senate Banking Committee on Tuesday in the week ahead. Expect him to be grilled about an external examination finding up to 1.4 million more fake accounts than first disclosed, bringing the total amount of financial fakery to 3.5 million. Those accounts may have contributed millions in revenue to the company. Whether Congress and regulators have the fortitude to force more painful penalties remains to be seen.
Critics may pick up their pressure as a new financial scandal has broken open — credit reporting agency Equifax’s security breach. It exposed personal financial data of half of Americans to hackers. This violation has cost Equifax shareholders. The stock has dropped more than 25 percent since the breach became public.
