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Category: Wells Fargo

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Wells Fargo settles bid-rigging case

WFCstagecoachLAmuseumhandout

Wells Fargo & Co. has agreed to pay at least $37 million to settle accusations that it and Wachovia Corp., which Wells acquired in 2008, paid kickbacks to win business from municipal governments.

In its regular quarterly filing with the Securities and Exchange Commission, made Tuesday, the San Francisco bank said it would pay the greater of the $37 million or "65% of the restitution amount of a future settlement, if any, with the various state attorneys general of their investigation of Wachovia."

The agreement, which Wells said was reached Oct. 21, stems from litigation with various municipal governments around the country and consolidated in a federal lawsuit in Manhattan.

The suit accused many investment banks of conspiring to rig the bidding process, “sharing their illegal gains through kickbacks to one another, and making other secret, undisclosed arrangements.”

A Wells spokeswoman said the case mainly involved events at Wachovia that occurred before Wells took over the Charlotte, N.C., bank.

Bank of America, JPMorgan Chase and UBS previously agreed to much larger settlements in the case.

RELATED:

JPMorgan Chase to settle bid-rigging allegations for $211 million

Bank of America settles municipal bid-rigging accusations

UBS to pay $160 million to settle bid-rigging case

-- E. Scott Reckard

Photo: A Wells Fargo stagecoach in the bank's history museum in L.A. Source: Wells Fargo & Co.

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Corporate taxes: Many top U.S. firms paid none, report says

DOLLAR
Many of the nation's most profitable companies are paying far less than the 35% corporate income tax rate, with dozens paying none at all, according to a new report.

Advocacy and research groups Citizens for Tax Justice and the Institute on Taxation and Economic Policy examined 280 companies and concluded that they paid an average 18.5% rate from 2008 through 2010 -- about half the official rate.

Companies lashed out at the findings.

GE accused the report of being “inaccurate and distorted” and said that it expects to pay a 30% overall tax rate this year. Verizon said the study was “union-orchestrated” as well as being “deceptive and politically motivated,” adding that the company paid out $1.8 billion in taxes over the three-year period.

But according to the study, only a quarter of companies paid close to 35% of their U.S. profits, while another quarter paid less than 10%.

The report also found that 78 paid zero -- or had a negative tax rate -- for at least one year due to nearly $223 billion in tax subsidies, 17% of which went to the financial services industry. Thirty companies went tax free for all three years, researchers found.

Wells Fargo alone took in nearly $18 billion in tax breaks over the last three years, followed by around $14 billion for AT&T and $12 billion for Verizon, researchers found.

Over the period, the tax rate of energy company Pepco Holdings averaged out to negative 57.6%, according to the report. General Electric’s was negative 45.3%.

The study, the 10th since 1984, culled from firms listed among the Fortune 500 who were profitable for each of the last three years.  Amid a backdrop of calls from Republican presidential candidates Herman Cain and Rick Perry to lower the existing corporate tax rate, report authors said their findings were not mean to be “anti-business.”

Corporations are also on the hook for state and local corporate income taxes as well as sales, property and payroll taxes, said Will McBride, an economist with the nonpartisan Tax Foundation research group. From 1994 through 2008, he said, corporations paid out more in taxes than they pulled in through after-tax profits for all but three years.

This week, the congressional Joint Committee on Taxation said that in order for the government to bring in a consistent amount of revenue, the corporate tax rate should drop no lower than 28%.

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Gov. Jerry Brown signs Amazon sales tax collection law

Federal government wastes half of every tax dollar: poll

Young people (seem to) support Warren Buffett's tax idea

-- Tiffany Hsu

Photo: Brian van der Brug / Los Angeles Times

Another fee bites the dust: Wells Fargo backs off debit charge

Wells branch-credit Paul Sakuma AP
Joining an industry's retreat in the face of customer protests, Wells Fargo has abandoned the idea of charging debit card fees -- the third major bank to back away from such plans in a day.

The San Francisco banking giant had planned to test a monthly $3 fee for users of its debit cards in five states. It said in a statement Friday that it had called off that pilot program "as a response to customer feedback the bank has received."

"We will continue to stay attuned to what our customers want," said Ed Kadletz, head of Wells Fargo’s debit card division.

A host of critics including President Obama have attacked Bank of America's plan to charge account holders $5 a month if they use their debit cards to make purchases. The populist outrage, highlighted by protests staged by the Occupy Wall Street movement, has caused other major U.S. banks to hold off on imposing similar fees.

Earlier Friday, Bank of America backpedaled, saying it would make it easier for its customers to avoid the fee by waiving the charge if they also used BofA credit cards, maintained minimum account balances or made certain direct deposits. Details of the revised plan had not been finalized, a person familiar with the changes said.

Also Friday, JPMorgan Chase said that after its own eight-month testing of $3 monthly debit card fees it had decided against imposing them on its customers.

Citibank, US Bank and Union Bank are among other major institutions that have now taken the no-debit-fee pledge. However, certain regional banks, such as SunTrust and Regions, already have implemented fees similar to those at Bank of America.

It will be interesting to see what other new charges the banks cook up as they try to make up for revenue lost to new regulations governing credit card, overdraft and debit card practices that were imposed in the aftermath of the financial crisis.   

RELATED:

BofA backpedals on $5 debit fee

Chase opts out of debit-card fee

Debit card users may switch banks over new fees

-- E. Scott Reckard

Photo: Wells Fargo in San Francisco. Credit: Paul Sakuma / Associated Press

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