Wells Fargo will cut product sales goals for retail bankers, almost a week after the bank was fined $185 million for allegedly illegally opening unauthorized accounts for its customers.
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Wells Fargo pledged Tuesday to eliminate product sales goals in retail banking as it works to win back trust following a crackdown last week by a federal consumer watchdog.
On Tuesday, Chief Executive John Stumpf apologized and said the management takes responsibility for the problems identified in the settlement.
Wells Fargo fell 0.9 percent to close at $46.52 in NY, erasing earlier gains.
Tolstedt received a pay raise in March, after getting more than $9 million in cash and stock past year.
In reaching the settlement, Wells Fargo was ordered to pay $185 million in penalties.
Altogether, Wells Fargo opened more than 2 million deposit and credit card accounts that may not have been authorized, the CFPB said in announcing the penalties on September 8.
Debit cards were issued and activated, and PINs created, without telling customers. The CFPB alleged that such practices resulted in insufficient fund fees and annual fees, as well as associated finance or interest charges and other late fees for some consumers.
Looking closer at the Wells Fargo fraud scandal, it has been uncovered that the executive who directed the over-5,000 employees fired this week escaped the company unscathed, with no repercussions for her role, and a massive $124 million in exit pay.
As for whether or not Buffett will pull out of Wells Fargo, a company he ardently supported over the years, Schiffer thinks the wealthy venture capitalist is in it for the long haul. Retail banking segment made up 57% of the total revenue, 49% of fee income and 59% of pretax revenue during the fiscal year 2015, noted the analyst.
8 settled allegations that it opened credit-card and deposit accounts for customers without their approval, while not admitting or denying wrongdoing. Anti-Wall Street rhetoric has become a common refrain during the presidential campaign and some advocates are hoping to turn that populist anger into an aggressive legislative push to rein in the financial industry next year.
Wells Fargo had almost $15 billion in SC deposits, or about 20 percent of the statewide total, at 149 branches at the midpoint of 2015, according to the latest figures filed with the Federal Deposit Insurance Corp.
“This ought to be a moment where people stop and remember how risky the system is when you don’t have the proper protections in place”, Treasury Secretary Jack Lew said at a conference Tuesday, according to CNBC.
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The case has thrust the San Francisco-based bank into a harsh spotlight at a time when big USA banks are still attempting to fix their reputations following the 2008 financial crisis. The spokeswoman, Torrie Matous, said the committee meant to question Wells Fargo CEO and Chairman John Stumpf as a witness, and that the committee had already informed him that his presence was requested. He declined to name the highest-ranking employee let go among that group.
