After two years of fallout from a scandal in its consumer bank, Wells Fargo is sensitive to criticism about how it handles customer accounts.
So it’s no surprise that complaints by Nikki Fried, a candidate for Florida agriculture commissioner, that the San Francisco-based company shut down her campaign’s account because she supported patient access to medical marijuana caught the bank’s attention. The issue, the lender says, is more nuanced.
“In recent days, there have been assertions that Wells Fargo elected to close an account in Florida because of our presumed political viewpoint regarding medical marijuana,” the company said in a statement on Wednesday. “That assertion is completely false. The company has no political position on the matter.”
Instead, Wells Fargo said, it closed Fried’s account because the federal prohibition of marijuana usage and sales bars national banks from serving customers engaged in the business or related activities. A long-simmering debate about marijuana usage, whether medical or recreational, has grown even more heated this year after the Trump administration reversed an Obama-era policy placing a lower priority on cannabis-related prosecutions.
More than half of U.S. states – including Florida – allow use of marijuana for medical treatments, and eight of them, along with the District of Columbia, allow recreational usage, according to the National Conference of State Legislatures.
Fried, an attorney from Fort Lauderdale who wants to expand access to medical marijuana, said a representative of Wells Fargo contacted her campaign in July, about a month after the account was opened, inquiring about her marijuana platform and whether the campaign would receive any donations from the industry.
When the campaign replied that it would, informing the bank that Fried herself had worked as a lobbyist for the industry, Wells Fargo formally terminated the relationship, citing a need to “oversee and manage banking risks,” Fried said.
“This is not an unfamiliar story,” she said in a news conference Monday at the Florida Capitol Building in Tallahassee. Although states have legalized medical marijuana and “licensed businesses to practice and distribute marijuana to patients and caregivers, access to financial stability is virtually impossible” for them to obtain, she said.
“Outdated federal laws allow for this sort of discrimination,” Fried added, “and big banks like Wells Fargo do everything they can to block progress.”
While Fried found another bank to handle her account, she said Wells Fargo’s actions embody “what is wrong with our government and politics today,” describing her work as an attorney fighting the bank’s foreclosure on home loans during the financial crisis and recounting the creation of more than 3 million fake accounts by workers trying to meet ambitious sales targets.
An initial $185 million settlement with federal and local regulators on that matter in late 2016 cost Wells Fargo lucrative bond deals with government agencies, led to contentious congressional hearings and spurred the abrupt retirement of then-Chairman and Chief Executive Officer John Stumpf.
Subsequent investigations of its auto and mortgage businesses only exacerbated regulators’ concerns, and early this year, the Federal Reserve imposed a cap on Wells Fargo’s growth until it improves corporate oversight.
The directive requires the San Francisco-based lender to keep its assets at or below the roughly $2 trillion held at the end of December 2017. At that time, it was the nation’s third-largest bank, behind New York-based JPMorgan Chase and Charlotte, N.C.-based Bank of America.
Later, in April, Wells Fargo agreed to pay $1 billion in civil penalties to settle the automotive- and mortgage-lending probes after talks with the Consumer Financial Protection Bureau and the Comptroller of the Currency’s Office.
The government said the lender sold some auto borrowers insurance they didn’t need under the pretense they might not qualify for loans otherwise and charged fees to mortgage customers that it was supposed to be absorbing.
