Ohio Governor John R. Kasich announced Oct. 13 that, for one year, he is barring Wells Fargo & Company from participating in future state debt offerings and financial services contracts initiated by state agencies under his authority and that he will seek to exclude Wells Fargo from participating in debt offerings initiated by the Ohio Public Facilities Commission .
Kasich is taking the action in response to the recent news that Wells Fargo engaged in business practices that drove employees to create more than two million new accounts without customers’ knowledge or authorization in order to generate new fee revenue. As a result, the bank was fined $185 million by the federal government and more than 5,000 employees were fired for the practice. Furthermore, some employees who objected to the practices were penalized or fired.
“It’s clear that Wells Fargo’s culture was compromised by greed and by a desire to make money that was stronger than a commitment to following proper ethical standards. While Wells Fargo only does limited retail banking in Ohio, it does regularly seek state bond business, so I have instructed my Administration to seek services from other banks instead, and I’ll cast my votes against Wells Fargo on the Public Facilities Commission. This company has lost the right to do business with the State of Ohio because its actions have cost it the public’s confidence. Policymakers’ first instinct in these situations is often to just write another law, but we’ve seen that that doesn’t always make a difference. We need to send a message to this company—and every other company—that the public must be respected, that ethical standards must be respected and when they’re not it comes with a cost,” Kasich said.
Kasich may revisit the decision in the coming year if the company makes progress in restoring a culture of integrity.
Information for this story was provided by the Governor’s office.