Wells Fargo suspends two execs in light of federal investigation

CHARLOTTE, N.C. — Wells Fargo & Co. has suspended two executives in the midst of a federal investigation into the bank’s purchase of low-income housing tax credits, according to a Tuesday report from Bloomberg.

Rick Davis, a senior vice president and regional equity manager, and Robert Klixbull, a vice president based in the Charlotte region, both of whom worked in Wells Fargo’s community lending and investment division, were suspended in light of an investigation conducted by the U.S. Department of Justice into the bank’s purchases, or negotiated purchases, of low-income housing tax credits, or LIHTC.

Investigators are looking into whether Wells Fargo and other banks conspired with real estate developers to lower bids on the tax credits — which would, in turn, increase the return on the banks’ investment. Companies typically purchase those particular credits to help lower their bill for federal income taxes. The developers who sell them can then put that money toward the construction of housing in low-income developments.

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