The week of March 18, Wells Fargo will celebrate its 160th birthday — marking 16 decades of exploiting Massachusetts customers and taxpayers for profit. Read on to learn more about the financial giant’s “proud” history of tax dodging, illegal foreclosures, predatory lending, mass layoffs and taxpayer bailouts.
Wells Fargo is America’s biggest tax-dodger. Wells Fargo put taxpayers on the hook for $43 billion in bailout funds[i], made record profits, and paid negative federal income taxes over the last three years. While we struggle to save our homes and schools, Wells Fargo refuses to pay its fair share.
- Wells Fargo made a three-year US profit of $49.3 billion[ii], with an additional $1.6 billion stashed in offshore tax-havens.[iii] The corporation received $17.96 billion in tax breaks over those 3 years – more than any other company.[iv]
- Wells Fargo didn’t pay any federal income taxes on its billions in profit. Instead, the corporation received a refund of $681 million on federal taxes from 2008 to 2010.[v]
- Despite taxpayer bailout funds and record profits, Wells Fargo slashed 6,385 jobs.[vi] Meanwhile, the top five Wells Fargo executives raked in almost $50 million in one year.[vii]
Wells Fargo is the largest servicer of mortgages in the United States[viii] and leads foreclosure rates on homes, leaving the 99% out in the cold.
- Wells Fargo is the largest servicer of mortgages in the U.S., with $1.82 trillion in mortgage servicing and a 17.7 percent share of the total market.[ix]
- Wells Fargo had $17.5 billion worth of foreclosed homes on its books as of June 2010.
- In the last year before the subprime bubble burst, Wells Fargo originated or co-issued $74.2 billion worth of subprime loans, contributing to the current foreclosure crisis.
- If Wells Fargo wrote down these mortgages to fair market value, it could create nearly
186,000 jobs.[x]
- Wells Fargo was one of five major banks sued by the Attorney General Martha Coakley in 2011 for pursuing illegal and unnecessary foreclosures on property in Massachusetts – as well as deceptive loan servicing. [xi]
Wells Fargo engages in discriminatory and predatory lending – targeting the most vulnerable communities with payday schemes and “ghetto loans.” The taxpayers who bailed out the banks got sold out
by Wells Fargo.
- From 2007 to 2009, Wells Fargo (and mortgage lenders it has since acquired) was 188% more likely to put African-American and 117% more likely to put Latino borrowers into higher-cost, subprime loans.[xii] While mortgage lending to white borrowers increased 34%, it dropped 44% for
African-American borrowers and 38% for Latinos.[xiii]
- Lawsuits have been brought against Wells Fargo in Baltimore, Illinois, Los Angeles, and elsewhere alleging these unfair practices – which Wells Fargo employees in Baltimore referred to as
“ghetto loans.”[xiv]
- Wells Fargo is a major funder of the payday loan industry that preys on cash-strapped working families. It provides credit to six of the seven largest publicly traded payday lenders in the country[xv] which finance nearly a third of the payday lending industry.[xvi]
- Wells Fargo also functions as a payday lender itself[xvii] offering direct deposit cash advances with annualized interest rates of 120%.[xviii]
Wells Fargo made billions of dollars in profit off a taxpayer bailout. Rather than help the 99%, Wells Fargo has foreclosed on homes, laid off workers, and funded job-killing politicians. It’s time Wells Fargo used its vast wealth and gratuitous tax breaks to benefit working families – rather than its political allies and the 1%.
[i] Nomi Prins and Krisztina Ugrin. October 1, 2011. “Bailout Tally Report.” See Page 6 “Subtotal” under Wells Fargo
[ii] Citizens for Tax Justice & the Institute on Taxation and Economic Policy. November 2011. “Corporate Taxpayers & Corporate Tax Dodgers 2008-10.” See Chart on Pg. 34 under Wells Fargo “Three Year Totals”
[iii] 2010 10-K Annual Financial Statement. See page 209 paragraph 4
[iv] Citizens for Tax Justice & the Institute on Taxation and Economic Policy. November 2011. “Corporate Taxpayers & Corporate Tax Dodgers 2008-10.” See Chart on Pg. 6 under under “25 Companies with the Largest Total Tax Subsidies, 2008-10”
[v] Citizens for Tax Justice & the Institute on Taxation and Economic Policy. November 2011. “Corporate Taxpayers & Corporate Tax Dodgers 2008-10.” See Chart on Pg. 34 under Wells Fargo “Three Year Totals”
[vi]Aggregated Wells Fargo announced layoffs – totaling 6,385. Specific announcement links: 1.http://layofftracker.blogspot.com/2009/06/wells-fargo-might-layoff-thousands.html 2. http://www.msnbc.msn.com/id/38135734/ns/business-us_business/
3. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/07/BUF81IS88Q.DTL 4. http://layofftracker.blogspot.com/2011/11/wells-fargo-plans-to-cut-technology-and.html 5. http://layofftracker.blogspot.com/2009_08_16_archive.html 6.http://layofftracker.blogspot.com/2009/07/wells-fargo-cuts-50-jobs.html
[vii] Wells Fargo 2010 Proxy Statement. Total of yearly compensation for top 5 executives
[viii] http://www.insidemortgagefinance.com/blogs/Bank-of-America-Wells-Fargo-Mortgage-Servicing-2011-1000018914-1.html
[ix] http://www.insidemortgagefinance.com/blogs/Bank-of-America-Wells-Fargo-Mortgage-Servicing-2011-1000018914-1.html
[x] The New Bottom Line, August 2011 – The Win/Win Solution. http://www.newbottomline.com/download_report_the_win_win_solution 17.7% mortgage share figure multiplied by 1.05 million jobs nationwide yields an estimated 186,000 jobs.
[xi] Office of the Massachusetts Attorney General, “Five National Banks Sued by AG Coakley in Connection with Illegal Foreclosures and Loan Servicing,” December 11, 2011. http://www.mass.gov/ago/news-and-updates/press-releases/2011/five-national-banks-sued-by-ag-coakley.html
[xii] Based on data from the Home Mortgage Disclosure Act Database.
[xiii] Based on data from the Home Mortgage Disclosure Act Database.
[xiv] http://www.seiu.org/a/profilewells.php
[xv] http://www.nclc.org/reports/content/payday_utility.pdf
[xvi] http://showdowninamerica.org/research/payday-lending
[xvii] Logan, Amanda and Christian E. Weller, “Who Borrows from Payday lenders?” Center for American Progress, March 2009.http://www.responsiblelending.org/pdfs/2b002-payday2005.pdf;
[xviii] Serres, Chris, “Biggest Banks stepping in to payday arena.” Star Tribune, September 9, 2009, http://www.startribune.com/business/57364812.html;https://www.wellsfargo.com/help/faqs/dda_faqs.
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