(Adds comment, background)
NEW YORK Oct 14 The state of Ohio on Friday
joined a growing list of municipalities to suspend business
relationships with Wells Fargo & Co over a scandal
involving as many as two million bogus accounts.
Governor John Kasich announced that for one year he is
barring Wells Fargo "participating in future state debt
offerings and financial services contracts initiated by state
agencies under his authority," and will seek to exclude the
California-based bank from participating in debt offerings
initiated by the Ohio Public Facilities Commission.
"While Wells Fargo only does limited retail banking in Ohio,
it does regularly seek state bond business so I have instructed
my Administration to seek services from other banks instead, and
I'll cast my votes against Wells Fargo on the Public Facilities
Commission," Kasich said in a statement.
"This company has lost the right to do business with the
State of Ohio because its actions have cost it the public's
confidence," he added.
Last month, the bank agreed to pay a $190 million settlement
over its staff opening as many as 2 million accounts without
customers' knowledge. The misconduct, carried out by low-level
branch staff to meet internal sales targets, shattered the
bank's folksy image and triggered a raft of federal and state
The scandal cost former chief executive and chairman, John
Stumpf, his job when he was forced to resign on Wednesday after
34 years with the bank.
Ohio joins other states and local municipalities, including
California, Illinois, and Chicago in banning Wells Fargo from
participating in bidding for bond underwriting and other types
In addition to outright sanctions, the states of
Massachusetts and Oregon, as well as the city of New York, have
said they would press for reforms at the bank, await results of
investigations while also reviewing their business relationship
with the company.
Kasich did say he could possibly revisit the decision in the
coming year if Wells Fargo were to "make progress in restoring a
culture of integrity."
(Reporting by Daniel Bases; editing by Andrew Hay, Bernard Orr)