Illinois State Treasurer Michael Frerichs promised more actionagainst Wells Fargo &Co. after his office announced that it is suspending about $30billion in annual investment activity with the bank.
Frerichs said during an Oct. 3 press conference that the actionwould cost the bank "millions" in fees. "Wells Fargo is a bigfinancial player in Illinois, and I hope to send the message that theirunscrupulous practices are not welcomed and will not be tolerated,"Frerichs said. Other relationships with the bank will be placed under review todetermine contractual terms and obligations, he added.
The state treasury office had announced Oct. 1 that it wouldsuspend itsinvestment business with the bank for a year, which includes using it as amunicipal bond underwriter, citing the bank's recent consent order with federalregulators and the revelation that the bank secretly opened millions of illegalcustomer accounts.
Frerichs did not provide an exact figure on how much the bankearned from state-related business activity last year.
He said his office will audit whether the bank violated thestate's unclaimed property laws. He also said the bank's account-opening practiceswere "shameful" and noted that in 2012 the bank agreed to asettlement of about $175 million related to claims that it engaged indiscriminatory lending practices in Illinois.
After the year-long suspension is over, the treasury office willre-evaluate the bank's governance, Frerichs said.