Bloomberg - Evening Briefing - ‘Repeat offender’

Wells Fargo reached a $3.7 billion settlement with US regulators—including a record $1.7 billion fine—over allegations it mistreated millions of customers. For years, the San Francisco-based bank has illegally repossessed vehicles, bungled record-keeping on payments and improperly charged fees and interest, the government alleged. “Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families,” Consumer Financial Protection Bureau Director Rohit Chopra said. “The CFPB is ordering Wells Fargo to refund billions of dollars to consumers across the country. This is an important initial step for accountability and long-term reform of this repeat offender.”

Rohit Chopra Photographer: Ting Shen/Bloomberg

Wells Fargo has been under pressure to resolve a raft of costly scandals that emerged in 2016 with revelations that it opened millions of bogus accounts, ultimately leading the Federal Reserve’s to cap its assets. In today’s settlement, the government alleged the bank (which didn’t admit to the allegations as part of the deal) improperly denied mortgage modifications, with some customers losing their homes, and in more than 1 million instances unlawfully froze consumer accounts. And this accord is unlikely to be the last. Chopra warned Wells Fargo’s efforts to boost profit through product launches and other growth initiatives has delayed key reforms—more restrictions may be coming. —Margaret Sutherlin 

China appears to be seeing an increase in Covid deaths across a swath of the country that aren’t being reported in government figures, according to a flurry of social media posts. It is fueling renewed skepticism that Chinese officials are hiding the full impact of their abrupt shift away from Xi Jinping’s “Covid-zero” restrictions. The skepticism stems from the rest of the world’s experience with a pathogen that’s killed at least 6 million people, and a studies that warn the new wave in China could kill a million more. 

A temporary fever clinic in a Beijing sports center Photo: Bloomberg 

The US Federal Trade Commission is deepening an investigation into Twitter’s privacy and data security practices in the wake of the company’s takeover by Elon Musk. In the past few months, the regulator has interviewed several senior executives as part of a probe first opened when Twitter’s former cybersecurity head filed a whistleblower complaint.

House Democrats are poised to release Donald Trump’s tax records, capping a three-year legal fight. Democrats argued the records should be released for transparency and that the former president’s unwillingness to make them public has heightened speculation around their contents. The anticipated action comes in the waning days of the House Democratic majority and one day after Trump was referred for criminal prosecution by Congress’s bipartisan Jan. 6 committee. 

It’s the golden age of cocaine. The illicit industry produces about 2,000 tons per year, almost double the amount being made a decade ago. And thanks to those massive cargo ships sailing the seas, markets everywhere are being flooded, bringing violence, corruption and huge profits. 

A farmer holds cocaine paste in Colombia. Colombia’s Putumayo province is a key source of the unprecedented increase in cocaine production. Photographer: Esteban Vanegas/Bloomberg

Bank of Japan shocked markets by doubling a cap on 10-year yields, sparking a jump in the yen and a slide in government bonds. Many economists interpreted the move as laying the groundwork for exiting a decade of extraordinary stimulus policy. In the US, Treasuries slumped, but stocks snapped a four-day losing streak. Here’s your markets wrap.

The energy crisis in Europe gets more complicated by the day. A new move to cap natural gas prices threatens to curb supply to the region, which is already tight because of Russia’s war on Ukraine. In the first full week of G7 sanctions targeting Moscow’s oil revenues, Russian seaborne crude exports have collapsed. And an explosion forced Russian gas flows to continue via alternative links for a pipeline that runs through Ukraine. The blast sent prices soaring earlier in the day.

In the aftermath of the 2008 financial crisis, major US banks promised to support more Black homebuyers, with giants like JPMorgan and Bank of America vowing to boost loans. But in 2021, JPMorgan underwrote just 122 additional mortgages for Black homebuyers. And then there’s Wells Fargo: The bank made the boldest pledge of all by saying in 2017 that it would loan $60 billion to create 250,000 Black homeowners within a decade. Last year, Wells Fargo hit a 15-year low in its lending to Black homebuyers. 

Terrance Jones outside his former family home in Baltimore, which was repossessed by Wells Fargo.   Photographer: Nathan Howard/Bloomberg

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

• FTX founder Sam Bankman Fried’s extradition may finally happen.
• In Afghanistan, the Taliban outlawed higher education for women.
• 3M says it will stop making or using “forever chemicals.” 
• Here’s why Apple stock is outperforming other tech companies. 
• There’s a new $24 billion crisis headed right for US childcare. 
• Your 401(k) tanked this year. Here’s how to prepare for 2023.
• Argentina’s World Cup winners return home to a crowd of four million.

In 2019, some of the world’s biggest plastic and petroleum producers made a big show of supposedly taking a stand on plastic waste. Exxon Mobil, Dow Chemical and Chevron Phillips and others invested big in an organization to promote recycling and plastic cleanup. But an investigation by Bloomberg has found that the organization, based in Singapore, is dominated by petrochemical companies that have a stake in keeping the world hooked on plastic.

Local workers from the nearby village sorting and collecting plastics washed ashore on a Sri Lankan beach. Photographer: Jonathan Wijayaratne/Bloomberg

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