Wells Fargo Fires Exec over Malibu Housing Scandal

After murmurs of a calling a boycott, Wells Fargo (NYSE: WFC) took steps to prevent a public relations disaster by firing Cheronda Guyton, a Wells Fargo vice president that was accused of using a luxurious beachfront Malibu home owned by the bank for large, extravagant private parties.

Wells Fargo is acting quickly to suggest that the fired bank executive’s inappropriate conduct as an isolated incident in hopes of cutting the story off quickly, but this scandal isn’t the first inappropriate use of a private company’s wealth while it was on the taxpayer dime. Last fall, when automotive and banking industry executives flew to Washington asking for a bailout, they were criticized for spending tens of thousands of dollars because they had flown to Washington on private jets rather than in commercial air.

The scandal is particularly troubling considering Wells Fargo’s acceptance of billions worth of federal bailout money. Although there have not been many other reported incidence of the abuse of foreclosed, bank-owned homes, chances are Guyton’s case will not be the last. Banks are overwhelmed with the number of foreclosures that they have on the books and simply do not have the workforce to manage their newly found portfolio of foreclosed homes.

Many banks have failed to keep lawns mowed and provide basic up-keep for the homes that they have purchased. Others have failed to keep pools cleaned, leading city officials to foot the bill in order to prevent them from becoming breeding grounds for mosquitoes. With the lack of care that bank officials have shown for their REI property, it shouldn’t be a surprise there are homes slipping the cracks and being misused by bank employees.