Earlier on Friday, the U.S. House Financial Services Committee announced it would launch an investigation into the bank and hold a hearing in later September.
Advertisement
The House Financial Services Committee is requesting transcribed interviews with Wells Fargo Senior Executive Vice President and Chief Financial Officer John Shrewsberry; President and Chief Operating Officer Timothy Sloan; Senior Executive Vice President and Chief Risk Officer Michael Loughlin; and Ms. Tolstedt.
The bank, over a five-year time frame, saw 5,300 staffers – many of them low-ranking staff , according to Wells Fargo’s CFO – open as many as 1.5 million deposit accounts and 565,000 credit card accounts, of which the bank could not “rule out the possibility that an account was unauthorized”. The committee also said it would consider seeking subpoenas if needed. Stumpf and several regulators are appearing before the Senate Banking Committee at a separate hearing on Tuesday.
The estimate by Mark Reilly, a managing director at human-resources consultancy Overture Group LLC, reflects the value of stock and stock options as well retirement benefits for the departing Wells Fargo executive.
He requested “all records related to the questionable sales tactics” that were produced or made available to Los Angeles and federal officials.
Tolstedt, 56, was head of community banking until July, when the bank announced she was retiring and would be replaced by retail brokerage head Mary Mack, based in Charlotte. The bank has an average of six accounts per customer, but was pushing to have eight, the suit claims, and blames the bank for pushing bankers into fraudulent practices though the quotas and constant monitoring.
The probes come after the bank agreed last week to pay $185 million to settle investigations by Los Angeles City Atty.
Wells Fargo & Co. was sued Friday by customers in what may be one of many lawsuits following disclosures that bank employees created unauthorized accounts to boost the bank’s fees. They said that they had paid out a total of $2.6 million.
Additionally, the document revealed that the bank’s own investigation found that “employees submitted applications for 565,443 credit-card accounts that may not have been authorized by using consumers’ information without their knowledge or consent”.
Up until recently, Khalid Taha was a personal banker at a Wells Fargo branch in San Diego, Ca.
Advertisement
The employees were opening the accounts in order to “satisfy sales goals and earn financial rewards under the bank’s incentive-compensation program”, according to the Office of the Los Angeles City Attorney.
