Wells Fargo, a bank that's been desperately trying to claw its way back from a massive scandal involving the creation of unauthorized accounts, has set a new target for growth.
The bank's lending division says it will once again start selling mortgage-backed securities, the financial devices that imploded in 2008 and caused the Great Recession.
Wells Fargo & Co (WFC.N), the largest U.S. mortgage lender, is hoping this year to sell bonds backed by mortgages without government guarantees for the first time since the 2008 financial crisis, the head of the bank's consumer lending division said on Thursday. [...]
"This year one of our aspirations is to come back to the market with a couple of deals and we're taking a look at making sure we can structure those properly ... to try to test the market and see what we can do there to help bring confidence back," [consumer lending division chief Franklin Codel] said.
This seems like a bad idea, but it's much worse when you consider our current context.
As you may know, the Republican-controlled House Financial Services Committee recently advanced a bill to repeal a majority of the Dodd–Frank Wall Street Reform and Consumer Protection Act signed by President Obama in 2010. If their bill reaches the Senate, which I expect it will, Democrats will almost certainly filibuster it, but that's not a great comfort.
Even if Republicans in Congress fail to pass their bill to repeal Dodd-Frank and it never reaches the White House, I don't believe we can necessarily assume the executive branch is interested in exercising oversight of the financial industry or enforcing current law. There could still be career civil servants at the SEC who still take their jobs seriously, but their boss may not.
The Trump regime is filled with billionaires who got richer after the 2008 financial crisis, not poorer.
If anyone reading this is a customer of Wells Fargo, you may want to consider switching banks sooner rather than later.