California's state government has a ban on doing business with Wells Fargo & Co., but the San Francisco-based company is securing contracts nevertheless. The most recent win is for $557.2 million of the state's general obligation bonds.
In the uproar over Wells Fargo's fake accounts scandal, California State Treasurer John Chiang in September 2016 imposed a 12-month suspension on business ties with the bank. In October 2017, Chiang extended the suspension another year. The state's Department of Insurance is also investigating the company for improper auto insurance charges. And California Gov. Jerry Brown has banned mandatory arbitration provisions in financial institutions' contracts.
But in April, the company submitted the lowest — and winning — bid in an auction for the underwriting of $636 million of California general obligation bonds. It then won a $500 million deal to extend the state a line of credit for the Oroville Dam.
With the most recent contract, Wells Fargo now has about 56% market share of the debt California sold competitively in 2017, according to its press release.