California closes the door on Wells Fargo's closed-door tack

New York

WELLS Fargo & Co's home state of California has passed a law aimed at curtailing the bank's use of closed-door arbitration to shroud complaints from aggrieved customers affected by its scandals.

Governor Jerry Brown signed a measure inspired by the San Francisco-based lender's fake-accounts scandal. It prohibits financial firms from forcing customers out of court and into arbitration to settle disputes when employees used clients' information to commit fraud.