Another uptown Charlotte tower could soon see a sign emblazoned atop the skyscraper.
Wells Fargo is asking the city for a zoning change so it can hoist signage on top of the tower at 550 S. Tryon St., the former Duke Energy building, a rezoning petition filed with the city of Charlotte shows.
The skyscraper — with its iconic handlebar roof and LED light show — is among the tallest and most recognizable towers in Charlotte. The bank-owned building sits adjacent to the Levine Center for the Arts and its “The Firebird” statue.
Wells Fargo’s plan calls for one sign on each side of the existing office high-rise, according to the petition filed Sept. 22. Illustrations show each sign would be 1,880 square feet across the handlebar. The petition does not include wording for the signs.
The signage and enhanced lighting on the building are part of a commitment and effort to make significant investments in Charlotte, Wells Fargo spokesman Josh Dunn told the Charlotte Observer on Wednesday.
“The architecture and design … provides a consistent branding placement opportunity with clear views of the building and Wells Fargo signage,” he said. “We are proud to elevate the Wells Fargo brand and build awareness for our company through building signage, joining numerous other major companies with a presence in Uptown Charlotte.”
Earlier during the year, he said the company earmarked $500 million over the next five years to upgrad workspaces and properties to createa better employee experience across the Charlotte region.
Wells Fargo illustration
Requests are reviewed by the city’s Planning Department, followed by a public hearing and a recommendation from the Planning Commission’s Zoning Committee.
The Charlotte City Council ultimately hears and decides the fate of all requests for rezoning within the city.
Changing Charlotte skyline
Wells Fargo’s plan was first reported by The Charlotte Observer news partner WSOC-TV.
In recent years, Charlotte’s skyline has been changing with more names going on buildings, including Ally, Barings and Regions.
But some of the changes have been met with backlash.
Charlotte-based Truist Financial Corp. said Thursday that it’s agreed to sell a chunk of its insurance business, for a hefty price tag. DAVID T. FOSTER III
On alternating sides of the tower, over 47 stories high are two 558-square-foot logos, opposite two 980-square-foot nameplates.
About Wells Fargo tower
Wells Fargo submitted this image in its rezoning request to place atop the tower at 550 S. Tyron St., a building formerly occupied by Duke Energy, and now filled with the bank’s employees. Wells Fargo
The 48-story, nearly 1.3 million-square-foot tower was developed by Childress Klein, based in Charlotte. The building architect was TVS Design and contractor Batson-Cook Construction, both based in Atlanta.
The building, completed in 2010, includes a 350-seat auditorium, 40,000-square-foot of retail and eight levels of underground parking with 2,100 spaces, according to TVS Design.
Dunn said the upgraded LED lighting on the sides and top of the building will elevate the Wells Fargo Lights program and “provides a unique opportunity to celebrate, support, and promote events, causes, programs and nonprofit organizations that directly connect with the community in Charlotte.”
Wells Fargo moves
In January, Wells Fargo began consolidating its East Coast hub offices in Charlotte.
The bank moved employees out of One and Two Wells Fargo Center buildings into Three Wells Fargo Center and South Tryon Street. The South Tryon Street tower is Wells Fargo’s Charlotte headquarters.
Wells Fargo’s has submitted a rezoning petition for two skyline signs on each side of the 550 S. Tryon St. tower in Charlotte.
Wells Fargo recently renovated 21 floors at 550 S. Tryon and 14 floors at Three Wells Fargo Center at 401 S. Tryon St.
The San Francisco-based bank has its largest employment hub in Charlotte, with about 27,000 workers.
This story was originally published September 27, 2023, 3:44 PM.
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Catherine Muccigrosso is the retail business reporter for The Charlotte Observer. An award-winning journalist, she has worked for multiple newspapers and McClatchy for more than a decade.
Bank of America said on Wednesday that it will raise its minimum hourly pay rate to $23 next month.
Two years ago, the Charlotte-based bank said it planned to increase the minimum hourly wage in the U.S. to $25 by 2025. That’s a 121% increase of nearly $14 per hour since 2010, according to Bank of America.
In the last six years, Bank of America raised the minimum hourly wage five times, to $15 in 2017, $17 in 2019, $20 in 2020, $21 in 2021 and $22 last year.
With the latest increase, hourly full-time employee base pay is nearly $48,000 a year.
“Providing a competitive minimum rate of pay is foundational to being a great place to work,” Sheri Bronstein, chief human resources officer at Bank of America, said in a statement. The pay raise helps attract employees and is an investment in the bank’s workers, customers and communities, Bronstein said.
The bank declined to say how many hourly employee it has in the U.S. and Charlotte area but said the pay increase affects 3.7% of all U.S. employees, and that thousands will benefit from the move.
Bank of America had over 170,000 U.S. employees as of December, according to the bank’s annual report. In 2021, Bank of America had 16,000 workers in the Charlotte area.
Bank of America is giving U.S. hourly workers another pay raise as the bank plans to reach a minimum wage of $25 by 2025. Chris Keane Bloomberg
Minimum hourly wages at other Charlotte banks
Several banks have increased the minimum wage over the past two years in the Charlotte area:
▪ In 2021, Ally Financial raised the minimum hourly rate to $23, according to Ally’s 2022 annual report. In 2021, the digital-only, Detroit-based bank raised the hourly pay rate in 2021 from $17 to $20, affecting 2,300 employees companywide. That same year the bank’s employees began moving into the 26-story Ally building at 601 S. Tryon St., which is expected to house about 2,100 workers.
▪ Last year, Fifth Third Bancorp lifted its minimum hourly pay to $20 last year. The Cincinnati-based bank with hundreds of employees in Charlotte and dozens of area branches, had increased pay to $15 in 2018 then $18 in 2019.
▪ Also last year, Truist Financial, based in Charlotte, raised its minimum wage to $22 per hour nationwide, affecting about 14,000 employees, from $15 to $18 an hour, depending on the region. As of last year, the bank employed more than 50,000 workers throughout the U.S., including more than 3,000 people in the Charlotte area.
▪ In 2021, Wells Fargo raised its minimum wage for hourly workers to $18 to $22, depending on location, following an increase the prior year, which was $16 an hour in Charlotte. The San Francisco-based bank has about 27,000 in the Charlotte region.
▪ Also in 2021, Connecticut-based credit card company Synchrony Financial raised its minimum hourly wage from $15 to $20 an hour for all employees, impacting hundreds of workers in Charlotte.
This story was originally published September 20, 2023, 11:00 AM.
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Catherine Muccigrosso is the retail business reporter for The Charlotte Observer. An award-winning journalist, she has worked for multiple newspapers and McClatchy for more than a decade.
Wells Fargo is based in San Francisco but has its largest employment hub in Charlotte, with about 27,000 workers here and more than 247,000 worldwide.
“We continue to believe we’ve got a lot more to do to make the company as efficient as it should be,” Santomassimo said at the conference.
He did not detail the extent of the coming layoffs.
Santomassimo said employee totals have decreased every quarter since the third quarter of 2020. “Now I’m not suggesting it’s going to be down every quarter forever, right. But I do think that there’s more to do,” he said.
Wells Fargo expects more layoffs and a decrease in office space as the bank looks to continue to reduce expenses. Joshua Komer jkomer@charlotteobserver.com
Where will Wells Fargo job cuts come from?
There is no one specific business line that will be the focus of the layoffs, according to Santomassimo.
“It really just is business by business, group by group,” he said, “making sure we come in every day, every quarter and have a plan to continue to incrementally get better and better.”
Santomassimo also said that attrition rates at the bank have slowed noticeably since last fall. “And so that’s why you see us having to use severance more than what we’ve had to do over the last couple of years,” he said.
Wells Fargo has reduced its employee totals by about 40,000 people over the past couple years, Santomassimo said.
Wells Fargo office space
Shrinking its real estate portfolio also will help the bank cut expenses.
“We had too much real estate before COVID,” Santomassimo said. “And so we’ve been methodically sort of working through that portfolio over the last few years, and we still have more to do there.”
Office workers working from home since the pandemic has had a major impact on commercial real estate. In Charlotte, for instance, a Charlotte Observer analysis in June found that 1 in 5 uptown office floors is vacant now amid record high vacancy rates.
There is “systematic stress” in the office space portfolio, Santomassimo said. “I personally spent a lot of time going through property by property about where we are, how are we managing it, what are the risks, how are we getting ahead of it.”
One Wells Fargo Center in uptown. Wells Fargo employees have been moving out of the building as the bank consolidates its office space. Arthur H. Trickett-Wile atrickett-wile@charlotteobserver
Wells Fargo stunned the Charlotte office market in January when it said it would be moving all workers from two of its uptown Charlotte towers. That includes leaving its iconic longtime home at 301 South College St., the site of its 1980s-era building that resembles a jukebox.
Then in April, the bank detailed plans for a $500 million upgrade at its largest local campus, in northeast Charlotte.
This story was originally published September 13, 2023, 8:52 AM.
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Award-winning journalist Adam Bell has worked for The Charlotte Observer since 1999 in a variety of reporting and editing roles. He currently is the business editor and the arts editor. The Philly native and U.Va. grad also is a big fan of cheesesteaks and showtunes. Support my work with a digital subscription
That’s the $750-million question facing Truist bank, which disclosed this week it would make three-quarters of a billion dollars in expense cuts in the coming months, including “sizable” layoffs at the Charlotte-based bank.
Truist did not say how many of its workers would lose their jobs, but said the dismissals would happen between the third quarter of this year and the first quarter of 2024. CEO Bill Rogers delivered the presentation about the bank’s plans at a Barclays Global Financial Services Conference on Monday.
The job cuts would result in about $300 million in savings, according to the bank. Additional savings would come from $200 million in technology modernization and optimization, and $250 million from consolidating business operations over the next 12 to 18 months.
Rogers also detailed plans to consolidate the leadership team to have fewer layers of management. In 2019, Atlanta-based SunTrust and Winston-Salem-based BB&T merged in a $66 billion deal to form Truist, and chose Charlotte for the new bank’s headquarters city.
All of the changes have multiple goals, Truist said, including: simplify the business; accelerate franchise growth; lower growth of expenses; improve its capital position; and align compensation to shareholder return.
But Wells Fargo Securities analyst Mike Mayo, in a research note Monday after Truist detailed its plans but before Rogers spoke at the conference, said, “The main question w/(Truist’s) new reorg is whether it goes far enough with a target to reduce expense growth… Yet, it at least shows mgmt is taking tougher actions.”
As of June 30, Truist had assets of $555 billion, making it the seventh largest U.S. bank by asset total.
Truist CEO Bill Rogers delivered a presentation about the bank’s plans cost-cutting plan that include layoffs during a Barclays Global Financial Services Conference. Observer file photo
Truist’s struggles
Mayo has been vocal about the challenges facing Truist.
Investors are at “a boiling point” after the company’s most recent earnings call, Mayo told American Banker last week. Truist reported net income of $1.2 billion in the second quarter ending June 30, compared to $1.5 billion a year ago.
Mayo said Truist has one of banking’s best footprints, but hasn’t capitalized on that potential. “We expect this to change given increased pressure by investors and management’s own comments that it needs to improve the rate of expense growth,” he stated.
A couple weeks ago, Janney Montgomery Scott director of research Chris Marinac told Business North Carolina that Truist contends it met its targets for merger-related expense cuts. But inflation rates and COVID-era wage hikes forced the bank to spend more than it anticipated to spur revenue growth, Marinac said.
On Monday, he told the Winston-Salem Journal that Truist’s new initiatives could be a short-term catalyst for the stock.
Truist stock ended the trading day on Tuesday at $30.01 after starting the day at $30.37.
Some analysts question if Truist’s $750 million cost-cutting plan is enough. Jeff Siner jsiner@charlotteobserver.com
Truist’s planned layoffs
As of last year, the bank employed more than 50,000 workers throughout the U.S., including more than 3,000 people in the Charlotte area. Truist declined to say Tuesday how many jobs will be lost companywide or in Charlotte.
“As we continue to transform Truist to focus on our strengths and drive long-term growth and profitability, we’re hiring in some areas and rightsizing in others through natural attrition and planned staffing reductions,”Truist said in a statement to The Charlotte Observer on Tuesday.
The bank did not respond directly to any questions about its layoff plans.
In his report, Mayo said he suspects job losses “will be more higher-paying middle levels of management.”
Still, with all of the cost cutting that Truist has outlined, Mayo questioned “why more savings don’t reach the bottom line… The hope is that mgmt may be trying to under-promise.”
This story was originally published September 12, 2023, 4:42 PM.
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Catherine Muccigrosso is the retail business reporter for The Charlotte Observer. An award-winning journalist, she has worked for multiple newspapers and McClatchy for more than a decade.
Charlotte-based Truist bank warned at an investors conference this week that it will make “sizable reductions” in its workforce as part of $750 million in companywide cuts in expenses.
Truist did not disclose the number of people who would be laid off, but said the actions would happen between the third quarter of this year and the first quarter of 2024. CEO Bill Rogers delivered the presentation at a Barclays Global Financial Services Conference Monday.
The job cuts would result in about $300 million in savings, according to the bank.
Rogers also detailed plans to consolidate the leadership team to have fewer layers of management. In 2019, Atlanta-based SunTrust and Winston-Salem-based BB&T merged in a $66 billion deal to form Truist, and chose Charlotte for the new bank’s headquarters city.
The changes have multiple goals, Truist said, including: simplify the business; accelerate franchise growth; lower growth of expenses; improve its capital position; and align compensation to shareholder return.
As of last year, Truist had more than 3,000 workers in the Charlotte area, part of more than 50,000 employees companywide.
“As we continue to transform Truist to focus on our strengths and drive long-term growth and profitability, we’re hiring in some areas and rightsizing in others through natural attrition and planned staffing reductions,”Truist said in a statement to The Charlotte Observer on Tuesday.
The bank did not respond directly to any questions about its layoff plans.
Truist had assets of $555 billion as of June 30, making it the seventh largest U.S. bank by asset total.
Trusit bank said it will make sizable jobs cuts and other changes as part of $750 million in expense cuts. DAVID T. FOSTER III
This story was originally published September 12, 2023, 10:56 AM.
After 40 years at Bank of America, Cathy Bessant will succeed Michael Marsicano as the president and CEO of the Foundation for the Carolinas.
Deborah Triplett
The Foundation for the Carolinas — the Charlotte-based nonprofit organization with more than $4 billion in assets — will enter its fourth generation of leadership in 2024.
Veteran Bank of America executive Cathy Bessant will take over the nation’s fifth largest community foundation as its president and CEO in the new year, leaders told reporters Wednesday.
Bessant, who in July announced plans to retire from Bank of America after 40 years, succeeds Michael Marsicano, who grew the foundation’s assets from $245 million in 1999 to nearly $4 billion as its third president.
Bessant, a former chair and longtime FFTC board member, will be tasked with taking over several initiatives — and some controversy — that began under Marsicano’s leadership.
“I don’t think of this as chapter two,” Bessant said. “I think of this as a return to chapter one. I never intended to be a banker for 40 years.”
Bessant said she got a job at the bank to make money before going to law school. She wanted to be a lawyer for the ACLU.
“This is yet another expression of, I think, the person that I’ve always been,” she said.
The foundation originally planned to replace Marsicano before he retired in January, but interim CEO Laura Smith helmed the organization throughout this year.
The search for a new president was “no easy task,” said Jada Grandy-Mock, who sits on the Board of Directors and search committee.
“It was a long search that was done with intent, as well as a whole lot of focus,” she said. “We didn’t want to rush in identifying the best candidate for this foundation, for this community.”
Smith’s staff gave the search committee the flexibility to spend time looking for the best candidate, Board of Directors Chair Arrington Mixon added.
Bessant, the daughter of a public-school teacher and nonprofit leader, graduated from the University of Michigan Ross School of Business. She is a breast cancer survivor and earned the “Most Powerful Woman in Banking” designation from American Banker magazine three times in a row.
At Bank of America, Bessant served as the president of Global Corporate Banking, chief marketing officer and, most recently, as vice chair of Global Strategy in Paris. She said she looks forward to returning to Charlotte and the Carolinas, which will always be her home.
“There isn’t a better job in a better city at a better time,” Marsicano said in 2019 when asked what advice he’d give his successor.
Bessant will also manage the foundation’s partnerships and donor-directed funds, $20 million of which were funneled to anti-immigration groups from 2006 to 2018, a 2019 Charlotte Observer investigation found.
With the foundation’s long-standing donations to area nonprofits that support asylum-seekers and refugees, its pass-through donation in the Center for Immigration Studies and Federation for American Immigration Reform — designated hate groups — boggled and upset some.
While charitable grants from the foundation did not go to anti-immigration groups, “donor-advised” funds did, the Observer previously reported. In most cases, donors determine where money goes, and the foundation can channel it to any organization recognized as a nonprofit by the federal government.
“Philanthropy is a form of freedom of speech,” Marsicano previously told the Observer, “and I don’t think any institution should be cutting off freedom of speech on fund holders.”
Bessant said deliberating funds and partnerships is “an incredibly important part of the mission of the CEO” but did not say if the foundation would change the way it funds groups.
With four months until Bessant assumes her position, there are things about the foundation’s work she does not yet know, she said.
This story was originally published September 7, 2023, 11:30 AM.
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Charlotte Observer breaking news reporter Julia Coin has covered local and statewide topics, including illegal gambling, school systems, infectious diseases and air quality. She previously covered sexual assault near the University of Florida, Hurricane Ian damage and Florida legislature. She also led one of the largest student-run newsrooms as the Independent Florida Alligator’s editor-in-chief. Support my work with a digital subscription
Wells Fargo has agreed to pay a $35 million civil penalty to settle charges of overcharging more than 10,900 customers for advisory fees.
Financial advisers from Wells Fargo and its earlier firms made handwritten or typed changes on clients’ advisory agreements to show reduced fees when their investment accounts were opened, the Securities and Exchange Commission said in a recent news release. But employees failed to honor the agreements by not setting them up in the billing system after negotiations, according to the SEC.
Certain customers who opened accounts before 2014 though the end of December 2022 were overcharged for advisory fees, which totaled more $27 million, the SEC stated.
Wells Fargo is based in San Francisco but has its largest employment base in Charlotte, with about 27,000 workers here. The penalty is the latest in a series of fines, penalties and settlements that the beleaguered bank has faced in recent years.
“For years, Wells Fargo and its predecessor firms negotiated reduced advisory fees with thousands of clients, but failed to honor them, overcharging those clients millions of dollars as a result,” Gurbir Grewal, director of the SEC’s Enforcement Division, stated in the news release. “Today’s enforcement action underscores the need for firms growing their businesses through acquisition to ensure that their growth does not come at the expense of client protection.”
SEC Investigators also said Wells Fargo failed to have written compliance policies and procedures to determine if billing systems had accurate data to prevent overbilling.
Wells Fargo paid $40 million, including interest, to compensate account holders overcharged by advisers.
According to the news release, the bank also agreed to pay a $35 million penalty and didn’t admit or deny the SEC charges, but consented to findings about the firm violating sections of an investment advisers act, and agreed to a cease-and-desist order and censure.
Wells Fargo will pay a $35 million penalty to settle SEC charges that it charged excessive advisory fees. File photo
Other Wells Fargo penalties
The SEC announcement is one of several financial scandals involving Wells Fargo,
The bank has faced a series of regulatory sanctions since its 2016 fake accounts scandal, when it was discovered hundreds of thousands of Wells Fargo workers opened millions of accounts for customers without their permission in order to meet sales goals for over a decade.
And following an investigation, a $145 million settlement was reached last September after the U.S. Labor Department looked into concerns about Wells Fargo’s contributions to its 401 (k) plan.
Earlier this month, North Carolina House Speaker Tim Moore said a medical marijuana bill is likely dead for this session.
It passed the Senate. And a majority of House members back it.
But a majority of the GOP House caucus isn’t on board, and Moore said he wants a House Republican majority to support anything that moves forward.
So for now, North Carolina remains one of the most strict states when it comes to marijuana. The Old North State is one of just 12 states that doesn’t allow either recreational or medical marijuana.
But while lawmakers are squabbling over medical marijuana, they are missing the (hemp) forest for the trees.
Stores across Charlotte are now selling legal hemp-based products that will get you high. I did a story about it for WFAE. You can read it here.
The background:
In 2018, the federal government removed hemp from a list of controlled substances, so long as it contained less than 0.3% Delta 9 THC. That’s part of the plant that gets you high.
In North Carolina, lawmakers last year passed a law that aligned the state’s hemp regulations with the federal government, specifically allowing for hemp derivatives.
Over the last few years, the power of the market went to work. Growers and manufacturers found ways to extract psychoactive substances from hemp that doesn’t have Delta 9 THC.
Some, like Delta 8, have been around for a while. One of the newest products is THC-A, which is not psychoactive on its own. But…
Back in April and May, investors saw juicy yields on regional bank stocks, some paying twice the rate on the 10-year Treasury note but wondered how safe they were if earnings fell out of bed — or how low the stocks might trade. After all, PacWest Bancorp in May slashed its quarterly payout to a nominal penny a share , down from 25 cents. Since then, banks have paid up. Western Alliance Bancorporation of Phoenix left its dividend unchanged at 36 cents a share in May and yields 3%. Truist Financial Corp. of Charlotte, North Carolina, in late April kept its dividend unchanged at 52 cents a share, and today still yields a whopping 6.3%. This Wednesday, Rhode Island’s Citizens Financial left its dividend unchanged at 42 cents a share, equal to a 5.4% yield, still above a two-year Treasury. Similar-sounding commitments from other super regional banks on their recent second-quarter earnings calls reassured investors who may have doubted banks were able and willing to pay what are, in some cases, still sky-high dividends in the wake of the failures of Silicon Valley Bank and First Republic Bank earlier this year. Take Cleveland-based KeyCorp , for example. As of Friday, the bank’s common stock still yields 7.1%, albeit down from 8.5% as recently as May. Comerica Bank in Dallas pays a dividend equivalent to a 5.5% yield, down from 7.9% in May. The banks’ yields have fallen as the stocks have recovered some of their losses from earlier in the year. The S & P 1500 Composite Regional Bank Index, for example, has rallied 10.3% in the past month, according to FactSet, and 6.6% in the past three months, but remains 22% lower so far in 2023. As a group, the 93 banks in the index yield 3.6%, not far from the 10-year Treasury note yield of 3.83% as of Friday. The two-year Treasury note yields about 4.85%. To judge the safety of bank dividends, take a look at their dividend payout ratios , which measure the percentage of earnings paid out in dividends. As weak as bank profits are expected to be this year and the next, Truist’s dividend payout ratio is only estimated to rise to 51.4% in 2023 and 54% in 2024, according to Janney Montgomery Scott. At the height of the Covid-19 pandemic in 2020, the ratio got as high as 58.4%. In a report this week, Janney analyst Daniel Cardenas warned investors, “While current expectations do call for challenging conditions in 2H23 and 2024, we think investors should remain focused on companies with proven track records of performing well during tough times and that offer an attractive yield with a manageable payout ratio.” Janney recommended Los Angeles-based Hanmi Financial , yielding 5.8% with an estimated 2024 payout ratio of 30.7%; San Jose, California-based Heritage Commerce , 5.6% and 47.9%; Northrim BanCorp in Alaska, 5.0% and 49.9%; Premier Financial of Ohio, 6.7% and 55.1%; and Valley National Bancorp of New Jersey, 4.7% and 35.2%. — CNBC’s Michael Bloom contributed reporting.
RALEIGH, N.C. (AP) — North Carolina House Speaker Tim Moore confirmed on Friday that his record fifth two-year term presiding over the chamber will be his last, saying legislative colleagues have known about his decision going back a year.
Moore, a Cleveland County Republican, has served in the House since 2003 and was first elected speaker in 2015 while succeeding now-U.S. Sen. Thom Tillis at the job.
He’s helped push a conservative fiscal and social agenda through the General Assembly with Senate leader Phil Berger and built GOP seat margins back to veto-proof majorities.
The U.S. House majority is in play next year after an anemic showing by Republicans in the midterm elections and a surprise Supreme Court ruling that will likely bring two new safely Democratic districts.
House Republicans in North Carolina are pitching an overhaul of public education laws in the final days of the session that would take power away from superintendents and the State Board of Education while giving parents more control.
Democratic Gov. Josh Shapiro is backing off his insistence on money for a new private-school funding program, giving Pennsylvania’s Democratic-controlled House the opening to pass a new state spending plan after a days-long stalemate.
Republicans who control Pennsylvania’s Senate are advancing spending legislation ahead of Saturday’s start of a new fiscal year, but they lack agreement with the Democratic-controlled House of Representatives.
Moore, 52, said in an interview that he told fellow House Republican leaders in spring 2022 about his plans not to run for speaker after the 2023-24 term ends. And he said he told the current GOP membership the same thing last fall when they assembled their slate of candidates for chamber positions.
“All of my caucus members knew — I made it clear that this is my last term as speaker,” Moore said, adding that he would serve out his term through the end of 2024. A successful run for speaker by any Republican in 2025 would be all but contingent on the GOP retaining a seat majority.
Leading up to the 2022 elections, Moore had weighed running for a congressional seat in a potential open district west of Charlotte, but he declined. Then-U.S. Rep. Madison Cawthorn initially announced he wanted to run in that region. The congressional lines ultimately had to be redrawn last year and Cawthorn ran and lost in another mountain-area district.
The General Assembly will again redraw the state’s 14 U.S. House districts later this year in time for the 2024 elections, raising the potential for Moore to run for Congress now.
When asked Friday about his future, Moore didn’t completely reject running for his state House seat again in 2024. Some previous speakers over the past 30 years have remained rank-and-file members of the legislature.
Still, Moore said that he would be “looking at potentially other offices or other options.”
With his election as speaker in January, the Kings Mountain attorney made history by breaking a tie with two former speakers who had served four two-year terms: Democratic Rep. Liston Ramsey of Madison County and Rep. Jim Black of Mecklenburg County.
Rep. Jason Saine, a Lincoln County Republican and top budget writer, said Friday that Moore had mentioned not running for speaker in 2025 on “multiple occasions” to the GOP caucus.
Moore last month was the subject of a lawsuit by a man who alleged Moore broke up his marriage by having an affair with his wife. Moore, who is divorced, defended his actions and vehemently rejected allegations in the lawsuit. Attorneys for Moore and the husband announced last week the matter was resolved, and the husband ended the lawsuit July 5, according to a state courts website.
Saine, who has been mentioned as one of many on a list of potential successors to Moore as speaker, said Moore’s decision was made long ago and had no connection to the legal matter.
“No one is pushing the speaker out,” Saine said in a text message. “He’s been very open and honest that he would not seek another term as our speaker.”
After being allowed to work remotely since the pandemic, employees of Charlotte-based Truist have been ordered back to the office, a spokesman confirmed Saturday.
Truist is Charlotte’s second-biggest bank by deposits. Truist and nine other Charlotte companies were named among “the most trustworthy” in April by Newsweek, The Charlotte Observer reported at the time.
“As we return to a normal, post-pandemic working environment, we believe we do our best work when we have the ability to collaborate in-person,” according to a statement provided to the Observer by Truist spokesman Kyle Tarrance.
“We greatly value the feedback of our teammates, and we’re actively working to raise awareness of the numerous resources available to our teammates for important benefits like child care, parking assistance, commuter benefits and more,” according to the statement.
It was unclear Saturday how many Truist workers have been working remotely, including “hybrid” weeks split between home and office.
Truist, Charlotte’s second biggest bank by deposits, is ending remote work for its employees. Jeff Siner jsiner@charlotteobserver.com
Truist office-based and hybrid workers must return to the office by June 30, Observer news partner WSOC reported.
Employees were caught off guard after the company notified them of the return-to-office order, and some were in tears, according to the station’s report.
While some banks have embraced hybrid work models, Charlotte-based Bank of America and others have emphasized in-office working, the Observer previously reported.
Bank of America updated its remote work policy last fall, including adding a provision allowing some in-office employees to work from home two days a week.
This story was originally published June 17, 2023, 2:55 PM.
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Joe Marusak has been a reporter for The Charlotte Observer since 1989 covering the people, municipalities and major news events of the region, and was a news bureau editor for the paper. He currently reports on breaking news. Support my work with a digital subscription
A bus driver and passenger opened fire on each other on a moving Charlotte transit bus earlier this month, leaving both injured, transit authorities said.
The incident started when a bus passenger, who authorities identified as Omarri Shariff Tobias, got up while the bus was in motion and asked the driver to let him off between designated bus stops, according to a news release from Charlotte Area Transit System.
The driver, David Fullard, told Tobias he would have to wait until the next approved stop. After about a two-minute exchange, Tobias pulled out a gun and pointed it at Fullard, the transit system said.
At this time, Fullard also pulled out a firearm, the transit system said. Both men fired their guns “in rapid succession,” although it is unclear who shot first, company spokesperson Brandon Hunter told CNN by phone Saturday.
Fullard was struck in the arm and Tobias was struck in the abdomen, according to the transit system.
Dramatic video of the encounter shows Fullard stopping the bus and pushing open the shattered driver barrier, as he stands up with his gun still drawn. As Tobias crawled toward the back of the bus, where the two other passengers on board had moved, Fullard fired his gun again from the aisle of the bus.
Tobias and another passenger exited the bus through the side door and Fullard exited through the front door, firing his gun again, the transit system said.
Both Fullard and Tobias are in stable condition and expected to recover, and the other two passengers were unharmed, the transit system said in a statement released Wednesday.
Tobias was charged with assault with a deadly weapon inflicting serious injuries, communicating threats, and carrying a concealed firearm, the Charlotte-Mecklenburg Police Department said in a news release. It’s unclear whether charges will be brought against Fullard.
Fullard was fired by his employer, RATP Dev, which employs the transit system’s bus operators, Hunter told CNN Saturday. CNN has reached out to RATP Dev for comment.
Possession of a firearm or other weapons while on duty or on company property is prohibited by the company’s workplace policy and employees can be discharged after the first violation, according to the transit system.
The Charlotte Area Transit System said Fullard did not follow proper protocol.
“It would have been reasonable for the operator to attempt to de-escalate the situation by allowing the suspect/passenger to exit the bus before arriving at the next bus stop,” the transit system said.
Fullard is still recovering from his injuries, his attorney told CNN Saturday, noting Fullard was “a dedicated employee and treasured his employment,” who worked as a driver for more than 19 years.
“I have represented a substantial number of CATS drivers over the years. Some of whom who have been assaulted, shot at or shot during their work activity,” attorney Ken Harris told CNN in an email.
“They consider themselves public servants. In light of their commitment, dedication and the workplace dangers that they encounter, we have continuously encouraged the CATS system to enhance security measures for drivers,” Harris said.
Tobias is currently being held in lieu of $250,000 bond and is next due in court June 6. CNN has not been able to locate an attorney for him.
Police say they are continuing to investigate the case.
The legislation, SB3, passed the Senate in late February. On Tuesday, it will get its first hearing in the North Carolina House. The bill lays out tight regulations to make medical marijuana legal for a list of conditions, including cancer, AIDS/HIV and post-traumatic stress disorder.
What You Need To Know
A North Carolina House committee will take up legislation Tuesday that would legalize medical marijuana
The Senate already passed the N.C. Compassionate Care Act with bipartisan support
The bill lays out tight regulations for producing, prescribing and selling medical marijuana in North Carolina
The legislation limits the numbers of conditions for which patients could get a marijuana prescrption, incluing AIDS/HIV, cancer and PTSD
Powerful Republican Sens. Bill Rabon and Michael Lee and Democrat Sen. Paul Lowe are the primary sponsors on the bill in the Senate. They shepherded the same bill through the Senate to pass last year, but that effort stalled out in the House.
“It seems to me that the idea is gaining momentum and obviously there’s strong support in the Senate,” Rep. Jon Hardister, a Guilford County Republican and the majority whip in the House, said as the bill passed the Senate 36-10 in late February.
The Charlotte FBI suspended an analyst after his actions and comments about the Capitol riot raised questions about his “allegiance” to the country. Meanwhile, Bank of America is under fire by Republicans who claim the bank shared confidential data placing customer near the Capitol on Jan. 6.
FBI
A suspended FBI employee from Charlotte who gave whistleblower testimony Thursday to a Republican-led congressional subcommittee had his security clearance revoked over his handling of a Jan. 6-related investigation, and amid questions from his superiors about his “allegiance to the United States.”
Meanwhile, an interim subcommittee report released earlier in the day accuses Bank of America, headquartered in Charlotte, of targeting conservatives by turning over confidential consumer data from customers who used their credit cards in Washington, D.C., around the time of the Capitol attack.
Marcus Allen, a staff operations specialist with the FBI Charlotte Field Office’s Joint Terrorism Task Force, was to testify before the House Judiciary Select Subcommittee on the Weaponization of the Federal Government over how the FBI is allegedly “purging” agents and other employees with conservative political views.
However, in a letter to the subcommittee’s chairman, Ohio Republican Rep. Jim Jordan, FBI Assistant Director Christopher Dunham said Allen’s top-secret security clearance had been revoked by his Charlotte superiors this month after he had “expressed sympathy for persons or organizations that advocate, threaten or use force or violence,” the New York Times and other outlets reported.
Allen’s actions, according to Dunham, raised security concerns in the Charlotte Field Office about his “allegiance to the United States.” Allen has been suspended without pay since February 2022.
The subcommittee’s report claims that Allen and several other FBI employees scheduled to testify were punished for either doing their jobs or speaking out against “the politicization” of the bureau.
In an email to The Charlotte Observer on Thursday, the FBI said the retaliation claims are not true.
“The FBI’s mission is to uphold the Constitution and protect the American people,” the bureau said. “The FBI has not and will not retaliate against individuals who make protected whistleblower disclosures.”
The subcommittee’s report also alleges that Bank of America “voluntarily and without any legal process,” gave the Washington office of the FBI “a list of individuals who made transactions in the Washington, D.C., area using a BoA product” between Jan. 5-7, 2021.
Customers in the D.C. area at the time who had used a BoA credit card to buy a gun in the past were “reportedly elevated to the top of the list,” according to a now retired FBI analyst who testified to the subcommittee in March, the report states.
Under questioning by the subcommittee, however, the retired analyst, George Hill, acknowledged that he merely had seen a record about the bank’s activities in the FBI’s case-management system but did not open it, CNN reported.
The FBI Office in Charlotte says it suspended an analyst last year after his actions concerning the investigation of the Capitol riot raised questions about “his allegiance to the United States.” Charlotte Observer file image Charlotte Observer file image
Based on court files tied to its Jan. 6 investigation, the FBI frequently received court approval to acquire banking and communications records to pinpoint the locations of suspects or to search for evidence of crimes.
The subcommittee’s report, however, described Bank of America’s actions in more critical terms — as “an invasion of the privacy of American citizens (that is) decidedly concerning.”
In response to the subcommittee’s allegations, a spokeswoman for Bank of America told the Observer on Thursday that the bank “follows all applicable laws and regulatory requirements to receive, evaluate, process, safeguard, and narrowly respond to law enforcement requests.”
The weaponization subcommittee was formed by the House Republican majority to investigate purported corruption and bias in the federal government — from the so-called “Deep State” probes of former President Donald Trump to alleged improper business activity by Hunter Biden as well as the FBI’s supposed “anti-parent” investigations into angry school protests over books, curriculum and pandemic response.
Its FBI whistleblower report involving Jan. 6 comes the same week as the release of the findings of a Trump administration-appointed special prosecutor that criticizes the FBI’s probe of possible links between Russia and Trump’s 2016 campaign.
Nonetheless, Russell Dye, a spokesman for Jordan, dismissed Dunham’s letter as a “last-minute Hail Mary” by the FBI “to salvage their reputation after John Durham illuminated their election interference and before brave whistleblowers testify about the agency’s politicized behavior and retaliation against anyone who dares speak out.”
The report and subcommittee hearing spotlights the roles of Charlotte and other FBI field offices in the massive federal investigation of Jan. 6., when thousands of Trump supporters violently stormed the Capitol to block congressional certification of President Joe Biden’s election win.
More than 1,000 arrests have been made to date. At least 28 have come from North Carolina. Ten N.C. residents have already been sentenced to prison.
‘Excercise extreme caution‘
Allen, according to Dunham’s letter, sent an email from his bureau account to co-workers several months after the Capitol attack, urging them to “exercise extreme caution and discretion in pursuit of any investigative inquiries or leads pertaining to the events” of Jan. 6.
He also sent an email linking to a website stating that “federal law enforcement had some degree of infiltration among the crowds gathered at the Capitol,” which Allen said raised “serious concerns” about the U.S. government’s participation in the riot, according to The Times.
In addition, when Allen was asked to conduct “open source searches on a Jan. 6 subject” from North Carolina, he reported that he found nothing to show that the suspect “engaged in criminal activity nor did he find a nexus to terrorism.”
As a result of Allen’s summary, the case was closed. It was reopened when another FBI employee provided “readily available” information that the subject in question had assaulted a Capitol police officer on Jan. 6 — “information … that should have been obtained by Mr. Allen when he conducted his search,” according to Dunham.
At least seven N.C. defendants have been convicted or accused of assaulting police on Jan. 6. Overall, 140 officers were injured defending the Capitol from the mob.
When asked by the Observer for the identity of the target of Allen’s investigation and whether that person has been charged, the FBI did not respond.
In a federal lawsuit filed in South Carolina, Allen said his suspension letter on Jan. 10, 2022 — which he says he received in the parking lot of a Cracker Barrel restaurant off Carowinds Boulevard — accused him of espousing “conspiratorial views” and promoting “unreliable information which indicates support for the events of January 6th.”
Allen, who lives in Lancaster, S.C., denies the allegations.
He joined the FBI in 2015 after previous serving as a Marine intelligence specialist in Operation Iraqi Freedom. He received the “Employee of the Year Award” from the Charlotte Field Office in 2019.
In his complaint against Christopher Wray, he accuses the FBI director of multiple First Amendment violations, including “content- and viewpoint-based discrimination,” as well as retaliation.
Allen also wants his security clearance restored and to be returned to his job.
This story was originally published May 18, 2023, 5:18 PM.
Michael Gordon has been the Observer’s legal affairs writer since 2013. He has been an editor and reporter at the paper since 1992, occasionally writing about schools, religion, politics and sports. He spent two summers as “Bikin Mike,” filing stories as he pedaled across the Carolinas.
Bank of America, based in Charlotte, is opening a wholesale investment branch in Luxembourg.
Mammoth Charlotte-based Bank of America is expanding in Europe and coming to one of the world’s smallest but wealthiest countries — Luxembourg.
The bank has opened a branch in the capital city of the same name, Luxembourg, Bank of America said Wednesday in a news release. The landlocked country is surrounded by Belgium, France and Germany.
Customers for the wholesale investment branch are corporate, commercial and NBFIs (non-bank financial institutions), not retail clients, Bank of America spokeswoman Megan Pearson told The Charlotte Observer in an email from London.
Bank of America chose Luxembourg because it’s the second largest investment fund center in the world after the U.S. By going there the bank said it will “deepen its global cash management services to these NBFIs.”
Luxembourg also is the second wealthiest country in the world with GDP per capita, purchasing power parity of $142,490, according to Global Finance, a corporate finance magazine, behind Ireland. The U.S. ranks at No. 9 with a GDP per capita, purchasing power parity of $80,035. Purchasing power parity is the exchange rate used to compare countries with different currencies expressed in international dollars, according to the report.
“Many multi-national companies have chosen Luxembourg as a European hub for their activities,” Fernando Vicario, CEO of Bank of America Europe Designated Activity Company, said in a statement.
The Luxembourg branch will be available for setting up local bank accounts and provide in-country transaction banking products and services, according to Bank of America.
Global Transaction Services accounts for over 10% of Bank of America’s overall revenue and about a third of its deposits, according to the bank. Bank of America has operations throughout the U.S., its territories and over 35 countries.
Bank of America is expanding into the small but wealthy European country of Luxembourg. Chris Keane Bloomberg
Fun facts for Luxembourg, Charlotte and Bank of America
Population: Luxembourg 660,924 residents; Charlotte estimated 880,000 residents.
Size: Luxembourg, 2,586 square miles. It’s slightly smaller than Rhode Island. Mecklenburg County covers 546 square miles.
Age: Luxembourg was founded in 963, making it 1,060 years old. It was established a century before the Battle of Hastings that led to the Norman conquest of England. Charlotte was founded in December 1768, some 254 years ago and a little over six years before the Revolutionary War started.
Labor force: Luxembourg, excluding foreign workers, has 334,000 workers. Bank of America has about 218,000 employees, including over 18,000 in the Charlotte region.
Airports: Luxembourg has two airports, one of which is paved. Pre-pandemic, Luxembourg Airport had passenger traffic in 2018 of 2.1 million. Charlotte-Douglas International Airport, which also is paved, had nearly 48 million passengers last year.
Economies: Bank of America has $3.051 trillion in assets and is the second biggest bank in the U.S. by assets (behind only JPMorgan Chase) and seventh biggest in the world. Luxembourg’s GDP is $71 billion.
One more thing: The country, a constitutional monarchy, is the only grand duchy in the world. A grand duchy is a country whose official head of state is a monarch with the title of grand duke or grand duchess. The country’s current monarch is Henri, the 68-year-old Grand Duke of Luxembourg. He has ruled over the country since 2000, and reportedly had a net worth around $4 billion.
This story was originally published May 11, 2023, 6:30 AM.
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Catherine Muccigrosso is the retail business reporter for The Charlotte Observer. An award-winning journalist, she has worked for multiple newspapers and McClatchy for more than a decade.
FedNow, a service from the Federal Reserve, is scheduled to be released in July.
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Getty Images/iStockphoto
The Federal Reserve’s new payment system, FedNow Service, is expected to launch this summer, promising a new way for people and businesses to send and receive money quickly.
The “instant payment” program has been in development for years, and some banks with large presences in Charlotte say they’re already gearing up to bring the system to their private and commercial customers.
And despite some claims to the contrary, the FedNow system is not part of a broader plan to eliminate current U.S. currency or give the federal government more control over your money.
Here’s what to know about the FedNow Service and when it will be available to those who bank with some of Charlotte’s biggest financial institutions.
What is FedNow? How will it work?
FedNow Service is “a new instant payment infrastructure developed by the Federal Reserve that allows financial institutions of every size across the U.S. to provide safe and efficient instant payment services,” the Federal Reserve says.
The “instant payments” will “allow individuals and businesses to send and receive payments within seconds at any time of the day, on any day of the year,” the group says, so “that the receiver of a payment can use the funds almost instantly.”
The service “will be available to depository institutions,” such as banks, “eligible to hold accounts at the Reserve Banks under applicable federal statutes and Federal Reserve rules, policies, and procedures,” though banks don’t have to participate in FedNow.
“Merchants, consumers, or non-bank payment service providers” will be able to use FedNow to send and receive money through their banks if their bank is part of the system “as they do today with other payment systems,” the Federal Reserve says.
“The initial launch” of FedNow is set for July, but the Federal Reserve has not announced an exact release date.
The service “will be deployed in phases,” with the first wave to “provide baseline functionality.”
Will Charlotte banks use FedNow right away?
Some major banks with large customer bases in Charlotte are already making plans for releasing FedNow once the service is available.
Wells Fargo is “ready” to launch in July after about four years of planning, according to Joe Hussey, head of Wells Fargo’s global treasury management payables and receivables department.
“What we’re really hoping for here is to really expand this product out to more users,” he told The Charlotte Observer, adding that the product will be available to individuals as well as businesses who bank with Wells Fargo.
Fifth Third Bank plans to “make the FedNow service available to customers later this year,” the company said in a statement.
“We will be piloting a limited rollout in the fourth quarter to a group of commercial clients,” spokeswoman Adrienne Gutbier said.
Charlotte-based Truist will be “sharing more about” its FedNow plans “later this year,” the bank explained.
Bank of America did not immediately return a request for comment from the Observer on its FedNow plan.
Will FedNow replace PayPal, Venmo or Zelle?
FedNow will be “slightly different” than other payment services such as PayPal, Venmo and Zelle, according to Hussey.
While those apps are typically used for person-to-person payments, such as splitting a tab with friends, FedNow will likely be used more for things like paying your utility bill or car insurance dues or transferring money between accounts you may have at different banks, he said.
Is FedNow a form of currency?
FedNow will not replace physical cash as currency in the U.S.
FedNow is a payment service, not a form of currency, and the Federal Reserve has repeatedly stated it is not getting rid of cash, the Associated Press reported.
The Federal Reserve has done separate research on potential digital currency, the AP added, but “that research is in its early phases and there isn’t uniform support among Fed officials for issuing such a currency.”
Will the government control your bank account through FedNow?
Some political figures and social media users have claimed that the Federal Reserve is developing programs, including FedNow, that will allow the federal government to track your spending and block purchases.
U.S. law does not allow the government to exercise that kind of surveillance or control, the fact-checking group Politifact reported.
There are “a variety of technical, legal and political reasons” why such a thing is impossible in the U.S., Politifact said.
Related stories from Charlotte Observer
Mary Ramsey is a service journalism reporter with The Charlotte Observer. A native of the Carolinas, she studied journalism at the University of South Carolina and has also worked in Phoenix, Arizona and Louisville, Kentucky. Support my work with a digital subscription
Wells Fargo’s Mary Mack, a top executive in Charlotte, will retire this summer after nearly 40 years in the banking industry and navigating a massive scandal at the bank.
Mack led the transformation of Wells Fargo’s retail bank branch network as CEO of its consumer and small business banking for the past seven years.
Mack also served as president and head of Wells Fargo Advisors, and other leadership roles in consumer banking, brokerage, commercial banking and corporate and investment banking, according to a bank news release Thursday.
“Mary has spent her entire career at Wells Fargo, which spans nearly four decades,” CEO Charlie Scharf said Thursday in a statement. “I can think of few Wells Fargo colleagues who have done as much for our company — and who have been as visible in the communities that we serve — over such a long period of time.”
Mary Mack, head of community banking for Wells Fargo in Charlotte, is retiring after a 40-year career. Observer file photo Observer file photo
Mary Mack’s leadership at Wells Fargo
In 2016, Mack became one of Wells Fargo’s first top executives in Charlotte leading community banking after Carrie Tolstedt stepped own — right before the San Francisco-based bank was fined $185 million over fake accounts.
Wells Fargo employees created millions of fake accounts for customers without their knowledge in order to meet aggressive sales goals. Mack was tasked with winning back angry customers, reinventing the sales culture for 94,000 employees and restoring a tarnished brand.
“Mary is not intimidated by a challenge,” retired Wells Fargo executive John Tate, who hired her into a position at Charlotte-based First Union in the 1980s, told The Charlotte Observer in 2016. “She will meet it head on.”
Under Mack, the community banking division underwent an overhaul including eliminating product sales goals for bankers who sell traditional products like checking accounts and credit cards. The bank also launched a nationwide ad campaign that said the bank was founded in 1852 and “re-established” in 2018, referring to changes that were made to move forward.
Mack was lauded in the financial community for her actions in the aftermath of the scandal, which included “listening tours” with Wells employees across the U.S. in the scandal’s wake.
Mary Mack, Wells Fargo’s CEO of consumer and small business banking, has also been active in the Charlotte community. Diedra Laird dlaird@charlotteobserver.com
Career and community
A native of Augusta, Ga., Mack graduated from Davidson College. Her first job in banking was as a commercial lender in 1984 at Charlotte-based First Union. She eventually managed commercial banking for the East Coast and health care banking group in the capital markets side of the business.
In 2001, when First Union bought Winston-Salem-based Wachovia, she was a regional president in the community bank. By 2006, Mack ran the brokerage business inside bank branches. In 2008, Wells Fargo acquired Wachovia.
In Fort Mill, S.C., the Mary Warner Mack Dog Park at the Anne Springs Close Greenway is named in honor of Mack’s eldest of three daughters who died at age 23 in 2014. Mack and husband Barry were credited as major drivers of the project.
Fortune magazine named Mary Mack one of the “50 Most Powerful Women in Business” for six consecutive years, starting in 2016, and she made American Banker magazine’s top 10 list of “Most Powerful Women in Banking” in 2021 and last year. Diedra Laird dlaird@charlotteobserver.com
Mack also has been involved in the community, including Habitat for Humanity International, Charlotte Executive Leadership Council and United Way Worldwide’s Board of Trustees, according to Wells Fargo website.
Fortune magazine named her one of the “50 Most Powerful Women in Business” for six consecutive years, starting in 2016, and she made American Banker magazine’s top 10 list of “Most Powerful Women in Banking” in 2021 and last year.
New roles after Mack’s departure
Saul Van Beurden, head of technology at Wells Fargo, will succeed Mack, effective May 15. Tracy Kerrins, head of consumer technology, will fill Van Beurden’s seat.
Van Beurden also held senior leadership roles at ING Group, running operations and technology for international retail and direct banks.
Kerrins has worked in the technology and finance industries for over 20 years.
More about Wells Fargo in Charlotte
Wells Fargo is headquartered in San Francisco but has its largest employment hub in Charlotte, with about 27,000 workers.
In late January, the bank announced it was moving all of its workers out of two uptown towers to consolidate into one space. The bank also is spending over $500 million in the next five years to upgrade its northeast Charlotte campus.
Since the 2016 scandal, regulators identified additional problems with how the bank handled mortgages, auto loans and consumer deposit accounts. That culminated in a $3.7 billion charge in fines and restitution from the Consumer Financial Protection Bureau last year.
This story was originally published April 13, 2023, 1:47 PM.
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Catherine Muccigrosso is the retail business reporter for The Charlotte Observer. An award-winning journalist, she has worked for multiple newspapers and McClatchy for more than a decade.
Carrie Tolstedt, the former head of Wells Fargo’s retail banking division, has agreed to plead guilty to obstructing a government examination of the bank’s misconduct.
File photo
Wells Fargo’s scandalous practice of billing customers for unauthorized accounts could send a former top executive to prison and already has saddled her with millions of dollars in fines.
Under an agreement announced Wednesday in the California federal courts, Carrie Tolstedt, the longtime head of Wells Fargo’s retail banking division, agreed to plead guilty to obstructing a government examination of the bank’s misconduct.
Tolstedt, 63, faces up to 16 months in prison, a $100,000 fine and three years of supervised release, according to her plea agreement.
In a separate civil settlement also announced Wednesday, Tolstedt has also been banned from working in the banking industry and must pay a $17 million penalty.
She is expected to make her first appearance on the criminal charge in the Los Angeles federal courts on April 7. Her plea agreement must be approved by a judge.
Former Wells Fargo community bank head Carrie Tolstedt
“Today’s plea agreement holds the defendant accountable for her role in obstructing the examination into the unlawful sales practices at Wells Fargo, which deceived millions of clients who placed their trust in the institution,” said Acting Inspector General Tyler Smith of the Federal Deposit Insurance Corp., Office of Inspector General, in a statement that followed the announcement of Tolstedt’s upcoming criminal plea.
Wells Fargo, based in San Francisco, maintains a massive financial and employment presence across the Charlotte area, with some 27,000 employees. It came to North Carolina in 2008 with the purchase of Wachovia.
Anatomy of a scandal
For more than a decade, Tolstedt served as the bank’s senior executive vice president of community banking, overseeing Wells Fargo’s consumer and small business retail business.
The Community Bank, which Tolstedt also directed, managed such products as checking and saving accounts, CDs, debit cards and other products.
But to meet excessive sales goals, thousands of Community Bank employees opened millions of accounts and other financial products from 2002 to 2016 that were unauthorized or fraudulent, prosecutors say.
In short, the bank’s customers did not want the products or know about them.
Yet Wells Fargo collected millions of dollars in fees and interest, damaged their customers’ credit ratings and unlawfully used sensitive personal information to both grow and hide the fraud.
Bank employees forged customer signatures, created phony PINs, and moved millions of dollars from actual accounts to the phony ones, practices known internally by bank employees as “gaming.”
Tolstedt, according to the plea agreement, became aware of the practices by 2004.
While the Community Bank under her watch eventually took steps to identify the sales misconduct, it did not look very hard. According to prosecutors, for every bank employee flagged internally for improper sales, more than 100 conducting the same frauds were never examined.
In May 2015, when banking regulators had begun examining Wells Fargo’s sales practices, Tolstedt contributed to an attempted cover-up that significantly downsized the scope of the scandal, according to Wednesday’s court filing.
Prosecutors say she helped prepare a memo that failed to disclose the actual number of employees fired or resigned for sales misconduct, or the tiny fraction of bank workers who were flagged internally.
Tolstedt retired from the bank in 2016.
In 2020, Wells acknowledged its misconduct by agreeing to pay a $3 billion fine to settle civil and criminal allegations with the U.S. Attorney’s Offices in Los Angeles and Charlotte, which continue to prosecute the case.
That same year, Tolstedt was still proclaiming her innocence.
“Ms. Tolstedt acted appropriately, transparently and in good faith at all times,” her attorney said. “We look forward to setting the record straight and clearing her name.”
This story was originally published March 15, 2023, 5:37 PM.
Related stories from Charlotte Observer
Michael Gordon has been the Observer’s legal affairs writer since 2013. He has been an editor and reporter at the paper since 1992, occasionally writing about schools, religion, politics and sports. He spent two summers as “Bikin Mike,” filing stories as he pedaled across the Carolinas.
The new CEO of failed Silicon Valley Bank is a familiar name to many in Charlotte’s banking community — Tim Mayopoulos was fired as general counsel of Bank of America in 2008 in the midst of the financial crisis and escorted out of the office by an HR representative.
Silicon Valley Bank failed after numerous companies transferred their cash from the bank when it couldn’t raise more capital after a $1.8 billion loss, TheStreet reported Saturday. The huge loss stemmed from a bond investment that was sold since depositors wanted to recoup their cash deposits, according to the financial news site.
In a message on LinkedIn and the new bank’s website clients Monday, Mayopoulos never mentions his ties to Bank of America. He referred to the job he landed next, noting that he was part of the new leadership at mortgage financing company Fannie Mae after the 2008-09 financial crisis.
Mayopoulos was CEO of Fannie Mae from 2012 to 2018, he said. He commuted from Charlotte to Fannie Mae headquarters in Washington, D.C., The Charlotte Observer reported in 2014.
“I am very proud of work we did there to restore the company to profitability and to stabilize the housing finance system in a period of unprecedented challenge,” Mayopoulos wrote in his message.
Fired by Bank of America
In testimony on Capitol Hill in 2009, Mayopoulos said he was stunned when Bank of America fired him in December 2008 and told him to leave immediately, The Charlotte Observer reported at the time.
He was the bank’s top lawyer during its negotiation to buy Merrill Lynch for $50 billion at the height of the financial crisis in September 2008. Mayopoulos gave prepared remarks to a House committee examining the bank’s purchase of Merrill Lynch and the accompanying $20 billion federal loan.
His termination came in December 2008, nine days after he advised the bank that it didn’t have the grounds to back out of its bid for Merrill Lynch despite that company’s mounting losses, the Observer reported.
Mayopoulos testified that he was in a meeting on Dec. 10, 2008, planning how to merge the legal departments of Bank of America and Merrill, when his assistant interrupted him.
An HR representative was waiting outside his office. The rep immediately took his company ID card, company credit card, Blackberry and office keys, and told him he couldn’t take anything with him, Mayopoulos told the committee.
The HR rep escorted him out to the executive parking garage, and Mayopoulos said he drove home.
The Moynihan connection
It wasn’t clear at the time if the advice about Merrill got Mayopoulos fired or if it was an executive drama involving Brian Moynihan, the current CEO of Bank of America, the Observer previously reported.
In fact, Moynihan came close to leaving the bank in late 2008 and Bank of America even prepared a news release announcing the departure, according to 2010 court filings, the Observer reported at the time.
Bank of America CEO Brian Moynihan was offered the bank’s general counsel role in 2008, a day before general counsel Tim Mayopoulos was fired from the post, The Charlotte Observer previously reported. Diedra Laird FILE PHOTO
Moynihan, who became CEO in January 2010, likely wouldn’t have gotten the job if he’d left the bank in December 2008, according to the Observer archives. He was head of the investment bank at the time, but would have lost the job to Merrill Lynch CEO John Thain after Bank of America closed on its purchase of Merrill, the Observer reported.
According to the 2010 court filings, the bank even prepared a draft news release announcing Moynihan’s departure. But after several board members objected, CEO Ken Lewis and another bank executive offered Moynihan the general counsel job. The bank fired Mayopoulos the next day, the Observer reported.
Romantic relationship headlines
In 2016, Mayopoulos made headlines of a different sort.
Fifth Third Bancorp fired its general counsel, a former lawyer for Bank of America, because of her romantic relationship with Mayopoulos, The Wall Street Journal reported at the time.
Mayopoulos, who was 57 and separated from his wife, disclosed the relationship to Fannie Mae’s compliance and ethics office in March 2016, according to The Wall Street Journal.
In a statement to the Observer at the time, Fannie Mae said Mayopoulos disclosed the relationship to the company’s office of compliance and ethics, and that its CEO followed the office’s guidance.
Mayopoulos “has no involvement in Fannie Mae’s relationship with Fifth Third Bank,” according to the statement.
More about Mayopoulos
Until recently, Mayopoulos was president of a Silicon Valley-based software firm that provides technology to financial institutions to serve consumer banking customers. He led digital mortgage platform Blend, Reuters reported in 2021.
“I know how important Silicon Valley Bank has been and continues to be to the success of its clients and the innovation ecosystem,” he wrote on the bank’s website.
Mayopoulos said the bank was “doing everything we can to rebuild, win back your confidence, and continue supporting the innovation economy. We recognize the past few days have been an extremely challenging time, and we are grateful for your patience.”
Business editor Adam Bell contributed to this report
This story was originally published March 15, 2023, 4:53 PM.
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Joe Marusak has been a reporter for The Charlotte Observer since 1989 covering the people, municipalities and major news events of the region, and was a news bureau editor for the paper. He currently reports on breaking news.
California-based Silicon Valley Bank had a building permit to do renovations at an office suite at The Line, a 16-story office tower in South End. Those plans are in limbo given its collapse Friday and takeover by the FDIC.
Sycamore Brewery
It’s not near the top of its problems, but a California bank’s plans to renovate an office suite at a South End office tower is in limbo after regulators closed down the bank Friday.
Silicon Valley Bank’s closure by regulators Friday is the largest bank to fail since the 2008 financial crisis, The New York Times reported. The Federal Deposit Insurance Corp. took over the bank in what is the second biggest bank failure in U.S. history, The Washington Post reported.
Late last year, Silicon Valley Bank received a Mecklenburg County building permit for a $7 million renovation of a suite at The Line, a 16-story office tower that opened last May.
The bank already had already moved into the building, a bank spokeswoman told The Charlotte Observer at the time. It was planning on opening additional office space in the building this year.
Those plans likely are not front of mind for Silicon Valley Bank.
The bank on Wednesday announced it had sold off $21 billion of its most liquid investments; borrowed $15 billion; and organized an emergency sale of its stock to raise cash, The New York Times reported. The bank’s stock dropped 60% on Thursday, according to The Times.
Here’s what else to know about the closure, and the bank’s presence in Charlotte.
The 16-story office tower called The Line in South End. Silicon Valley Bank had already moved into the building as of late last year, but those office plans are in limbo. Courtesy of Bogza
Silicon Valley Bank’s in Charlotte
Silicon Valley Bank was planning an upfit to Suite 1100 at The Line.
The office tower was developed by Atlanta-based Portman Holdings. It has 285,000 square feet of office and nearly 30,000 square feet of retail. It will be home to Sycamore Brewing, which is moving from next door.
The building sold last year to CBRE Investment Management for $206 million, according to county property records.
It was not clear how much square footage Silicon Valley Bank took up at The Line or how many employees it had here. SVB Securities, the bank’s investment banking division, had already moved in, the Observer reported in January.
The bank had been hiring for several open positions in Charlotte, including a business risk officer role.
Silicon Valley Bank did not return a request for comment on Friday.
The bank is federally insured, meaning if it can’t pay its depositors, they will get some money from the federal government, according to The Post.
Shares in other banks fell Thursday, including a 6.2% drop from Wells Fargo, The Post reported.
The bank, which dates back to 1983, is described as a tech start-up. It is a commercial bank with a focus on startups, technology and healthcare companies, according to its website. It has worked with clients like ZipRecruiter, Wayfair and Pinterest.
This story was originally published March 10, 2023, 2:17 PM.
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Gordon Rago covers growth and development for The Charlotte Observer. He previously was a reporter at The Virginian-Pilot in Norfolk, Virginia and began his journalism career in 2013 at the Shoshone News-Press in Idaho.
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