The Consumer Financial Protection Bureau fined the bank $100 million, the largest fine the agency has levied against a financial institution since it was created five years ago.
Advertisement
Stumpf, Cordray and Tom Curry, from the Office of the Comptroller of the Currency, will testify before the committee next week.
Shares of Wells Fargo closed down 3.26 percent to $46.96 on Tuesday, and were off 5.6 percent since the announcement of the settlement agreement last week. 1, Wells Fargo’s retail bankers will no longer have to open a certain number of new accounts to meet goals set by their supervisors.
Wells Fargo (WFC) stock dropped almost 4% on Tuesday after the bank announced plans to abandon its sales targets where customers were sold multiple bank products.
Wells Fargo has been known for its aggressive sales goals for its employees.
The activity peaked in 2013 and mostly occurred in the Southwest part of the country, John Shrewsberry, the company’s chief financial officer, said at a conference Tuesday. This week, we are appalled by the further news that the executive who oversaw the unit responsible for this fraud was not fired, and in fact is retiring with almost $125 million in compensation.
The employees were attempting to reach aggressive sales goals – and earn bonuses, regulators said.
Wells Fargo declined to comment.
They also issued and activated debit cards and created PIN numbers and fake email addresses to enroll unaware consumers in online banking services. Then they use those funds to lend to other customers.
The bank has since fired almost 5300 employees while setting aside R71 million ($5 million) for customer refunds of fees for accounts the customers never wanted.
Carrie Tolstedt was the head of Wells’ Community Banking division.
Overall, Wells Fargo’s share price is only down 6% since the scandal broke.
Wells Fargo “faced or settled four key areas of litigation as of the end of 2015”, the newspaper found, including Federal Housing Administration insurance claims, Visa and MasterCard interchange fees, mortgage products and order of posting (overdraft) fees. Because of anticipated call-volume increases that are typical after Labor Day – and the expected settlement news, which also would generate additional inquiries – the roughly 10,000 workers at the bank’s telephone contact centers were instructed to try to process customer requests as quickly as possible.
But the company’s shares have lost around 7 percent of their value since last week, when USA regulators unveiled the fines against the bank, and it has ceded its position as the largest US bank by market capitalization to rival JPMorgan Chase & Co.
Advertisement
Stumpf recently told The Wall Street Journal that the fault does not lie in the bank’s systems or culture, but rather with bad employees.
