Howard County’s finance department is reconsidering its five year-long relationship with Wells Fargo, reports The Baltimore Sun. The bank has come under intense scrutiny for allegedly opening more than half a million credit card accounts and 1.5 million fake checking and savings accounts since 2011 as a result of employees’ efforts to hit sales targets. The bank is paying $190 million to settle the case over the allegations.
The county uses the bank for banking services, settling investment securities and for revolving fund loans, among other uses.
The State of Maryland has reviewed its inventory of assets and relationships with Wells Fargo in an effort to reevaluate its business relationship, reports The Baltimore Business Journal. Maryland’s treasury office has determined that it does not have any underwriting or securities contracts, but several state agencies do have relationships with the bank. The office intends to seek advice from Attorney General Brian Frosh regarding whether to investigate grounds for potential suspension or disbarment. The Board of Public Works would ultimately need to take any such action.
Maryland and Howard’s efforts follow a series of suspensions and investigations by state and local governments involving the bank. The states of California, Illinois, and the City of Chicago have suspended their relationships for at least one year, reports Governing, and Massachusetts, Oregon, Philadelphia and New York City are currently investigating the natures of their relationships. Opines Governing:
The Takeaway: Suspending business with a bank has real, immediate implications. Not only do governments have accounts with the bank, they also use the firm to help underwrite municipal bond sales. This all amounts to a lot of money.