Wells Fargo got some good news this week. Federal regulators on Tuesday announced they’re lifting a severe punishment on the bank related to its fake accounts scandal from nearly a decade ago. For more on what this means for the bank — and other business stories — I’m joined now by Tony Mecia, of the Charlotte Ledger Business Newsletter, for our segment BizWorthy.
Marshall Terry: Remind me what was this fake accounts scandal? And what was Wells Fargo's punishment?
Tony Mecia: Yes, Marshall. This is a scandal that emerged in 2016 when it came out that Wells Fargo employees were opening millions of fraudulent accounts largely to meet sales goals. Over the next several years, Wells Fargo reached settlements with regulators. They paid out billions in fines, and the main punishment was this asset cap. The regulator said, you cannot grow your assets beyond your current amount until you've figured this all out and you have everything together so that you won't do this again. And so this week the regulator said, you've reached that goal and we're going to allow you to continue to grow.
Terry: And now that it's been lifted, is that the main thing it means for the bank? And what about Wells' rivals?
Mecia: Yes, it's going to allow Wells Fargo to compete maybe in a way that it hasn't been able to compete before. It can start going after business in a way that it hasn't before — because if it competed for business and got more business, that would violate the asset cap. So the thinking now is that Wells Fargo can be a little more assertive in how it pursues business — that could be good for consumers if it creates more competition.
Terry: Let's go to South End now. A new office tower there, 110 East, that had been empty not too long ago is starting to fill up. Who's going in there?
Mecia: There's a digital currency platform called Coinbase that this week said it would take about 60,000 square feet at 110 East. It'll take the entire 18th and 19th floors. This is an office building that opened last year. And it's been a little bit slow getting some tenants in, but it's announced several new tenants in the last month or two. One of the other main tenants is going to be SouthState Bank, Humana — the health administration company — is going in there, as well as Patterson Pope, which is a storage company. There's also going to be a restaurant on the bottom floor called The Iberian Pig, which is a Spanish tapas restaurant.
Terry: Now, you and I have talked at length about how the demand for office space in Charlotte has gone down as people continue to work a hybrid schedule. Is this a sign that that's changing?
Mecia: You still have very high vacancy rates. There are still a lot of people working from home. The hope has always been that as Charlotte grows and attracts new companies, that they're able to fill some of these spaces — and that's certainly happening here.
The larger picture about 110 East — it suggests that some of these office towers, even the new ones, they're starting to fill up. And, so, is that going to create a demand to build more office towers? Because there are currently no office towers under construction in Charlotte.
And so some brokers worry that, in a year or two, are we going to have no place to put a bunch companies that want to move here? So this could create demand for additional office construction.
Terry: Finally, a new era began in Charlotte this week with the opening of the massive development in Midtown known as The Pearl. It includes, among other things, Charlotte's first medical school, which will start classes in the fall. But there is more to The Pearl than just the school, right?
Mecia: Yeah. A lot of people think, oh, it's just the medical school. But there are a lot of other pieces, too. The thinking is that The Pearl isn't just a medical center campus. The idea is to turn it into a medical innovation hub.
A few other companies have signed on. IRCAD, which is a French surgical training institute, it's taking some space there. You're going to have doctors come in from all over the world. The idea is to have a bunch of health care startups and really make it a full-fledged research campus.
There are also plans for a restaurant and a hotel. Those haven't quite materialized. There are pieces of this that also honor the Brooklyn neighborhood, the historically Black neighborhood that was razed for urban renewal. There's a lot of different pieces, not just a medical school at The Pearl.
Support for BizWorthy comes from the law office of Robertson and Associates.
