A group of senators led by Elizabeth Warren asked the agency in a letter dated September 22 to investigate whether the bank violated labor law by failing to pay a fair wage to employees under pressure to meet aggressive sales quotas.
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“It never dawned on us that there could be a cycle”, the CEO said.
Wells Fargo is in the spotlight now for tactics aimed at meeting lofty sales goals.
He said the company has fired some 5,300 employees over the fake accounts and has eliminated quotas for bankers, branch managers and district managers starting January 1.
The head of Wells Fargo has stepped down from his role as an adviser to the US Federal Reserve amid the ongoing scandal over its creation of unauthorised bank accounts.
Earlier this week, lawmakers on the Senate Banking Committee grilled Wells Fargo Chief Executive John Stumpf about the accounts, with some calling on him to resign and forfeit his earnings and hold other senior executives accountable.
Regarding Wednesday’s editorial on the Wells Fargo bank scam (“Wells Fargo deceit fuels cynicism”), I hope that something is being done to address the victims of the Wells Fargo fraud.
Stumpf: The board will take care of that.
A group of Senate Democrats have asked the U.S. Department of Labor to open an investigation into whether Wells Fargo violated the Fair Labor Standards Act (FLSA). A banker in California said she developed a tic in her eye.
“It just sort of begs the issue of where was management”, Brown said. In New Jersey, one branch manager emailed Stumpf’s office in February 2011, expressing concern that employees had been moving money from one new account to another for months simply to “fool” Wells Fargo’s sales system.
Ironically, Wells Fargo CEO John Stumpf insisted during his Congressional appearance that the culture was changing at his organization … and encouraged employees to use the ethics hotline to ensure it.
A Wells Fargo spokeswoman said the bank prides itself on “creating a positive environment for our team members, including market competitive compensation, career-development opportunities, a broad array of benefits, and a strong offering of work-life programs”.
The culture of the bank has been brought into question, with aggressive targets, sales quotas and rewards for bank staff blamed for the episode.
Stumpf also declined to say whether the bank would claw back any of Tolstedt’s roughly $100 million (give or take a few million, but who’s counting?) in stock and options that she accumulated through her time at the bank and is set to abscond with when she retires later this year. “We recognize now that we should have done more sooner”, he acknowledged. He promised: “I will make it right”.
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Ken Sweet covers banking and consumer financial affairs for The Associated Press.
