Wells Fargo Scandal Blocks Severance Pay for Laid-Off Workers

For more than 400 employees recently laid off by Wells Fargo, the aftermath of the bank’s scandal over sham accounts has had an unexpected consequence: The bank is prohibited from paying the severance it owes them.

In mid-November, Wells Fargo’s federal regulator, the Office of the Comptroller of the Currency, imposed additional restrictions on the troubled bank. The rules, part of which are intended to curb golden parachute packages, limit what payments Wells Fargo is permitted to make to terminated employees without explicit regulatory approval.

Routine severance pay is sometimes exempted from such restrictions, but the federal rules for golden parachute pay are complex, and Wells Fargo’s severance plan is not eligible for the exemption, according to Diana Rodriguez, a bank spokeswoman.

Wells Fargo Scandal Blocks Severance Pay for Laid-Off Workers

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