The settlement agreement with Wells Fargo was reached following allegations bank employees opened more than 2 million unauthorized deposit and credit-card accounts, according to CFPB.
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During a five-year period, the bank fired roughly 5,300 employees and managers for opening the accounts without customers’ knowledge or approval as part of a bid to meet sales targets, Wells Fargo confirmed. The U.S. Attorney’s Office in Manhattan also declined to comment.
Just in case you weren’t outraged enough at the fact that thousands of employees at Wells Fargo (NYSE:WFC) fraudulently opened millions of accounts for customers without their consent, then I have a chart for you.
Indeed, Wells Fargo CEO John Stumpf said that he holds himself accountable for the account openings from his company, according to an article by Abigail Stevenson for CNBC.
Last week, the Consumer Financial Protection Bureau – working with the Office of the Comptroller of the Currency and the city and county of Los Angeles – imposed a $185 million fine on Wells Fargo for defrauding customers to generate more revenue.
Wells Fargo did not admit any wrongdoing in the settlements, which closed those investigations.
It is also less than the more than $200 million that the stock in the company held by company’s chief executive, John G. Stumpf is worth.
“The elimination of product sales goals represents another step to reinforce our service culture, helps ensure that nothing gets in the way of our ability to achieve our mission and is consistent with our commitment to providing a great place to work”, he said. A vote in April to require an independent chairman at Wells Fargo drew support from only 17 percent of votes cast.
The company’s shares have dropped roughly 8% over the past month and Tuesday it gave up the title as the most valuable USA bank to JPMorgan Chase (JPM).
Stumpf said clawback decisions are determined by the board of directors, and that product sales goals are not a component of compensation for any senior executives.
The case has thrust the San Francisco-based bank into a harsh spotlight at a time when big US banks are still attempting to fix their reputations following the 2008 financial crisis.
On top of the federal investigation, Wells Fargo is set to be grilled by Senator Elizabeth Warren and her colleagues on the Senate banking committee on September 20.
But the company’s shares have lost around 7 per cent of their value since last week, when U.S. regulators unveiled the fines against the bank.
George M. Doolittle, EVP Head of GFI Payment Services, at Wells Fargo, said: “SIB is particularly dedicated to ensuring that our partnership is based on a commitment to straight-through processing”.
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Bank stocks also were pressured Tuesday as traders reduced bets that the Federal Reserve will increase interest rates at next week’s meeting.
