Wells Fargo fires 2 over US probe into LIHTC purchases

by Francis Monfort13 Nov 2018

Wells Fargo has dismissed two employees in its community lending and investment division in relation to a federal investigation into the bank’s negotiation and procurement of low-income housing tax credits (LIHTCs), according to a report by Bloomberg.

People familiar with the matter told the publication that Rick Davis, a senior vice president, and Bob Klixbull, a vice president, have been fired.

The two executives had been previously suspended by Wells Fargo in connection with the investigation. Davis and Klixbull were based in the Charlotte, N.C., area.

The Department of Justice looked into whether the bank colluded with developers to submit lowball bids on tax credits for low-income housing projects. An investigation that started in Miami was referred to the Justice Department’s corruption unit, which then investigated Wells Fargo deals across the country. Banks are the biggest buyers of the tax credits because they get both a tax write-off and credit under the Community Reinvestment Act.

Beth Richek, a spokeswoman for Wells Fargo, declined to comment on personnel matters, Bloomberg reported.

“Wells Fargo is committed to providing financial solutions to support the development and rehabilitation of affordable multifamily housing in areas where there are the biggest needs,” she said in an email.

“Our investment in affordable housing has helped improve access to housing in cities across the country, and we remain committed to the affordable housing industry, including LIHTC projects,” Richek said.


Should CFPB have more supervision over credit agencies?