The recent Wells Fargo debacle, in which the bank was found to have opened 2 million unauthorized accounts, isn’t just a blow to the bank or its customers.
Advertisement
In the Wall Street Journal on September 13, Stumpf claimed that “There was no incentivizing of bad conduct”.
In an interview with the Wall Street Journal this week, the man in charge at the bank’s parent, Wells Fargo & Co. Tolstedt reportedly had authority over the 5,300 employees who the bank said it fired over the course of five years for creating bogus accounts.
When they complained about the mysterious fees, bank employees told them the account was “auto-generated” and they were denied a request for copies of an account statements because the information was “proprietary”, Edwards said. “While Wells Fargo has the luxury of throwing money at the problem to make it go away without its board or senior management being held accountable, the individuals and local institutions affected by its actions will continue to suffer for years to come”.
Investor Bart Naylor, who works for Public Citizen, the consumer advocacy group in Washington, called for Wells Fargo directors to study “whether the divestiture of all non-core banking business segments would enhance shareholder value, and whether it should divide into a number of independent firms”.
The powerful Financial Services Committee of the US House of Representatives announced Friday they will investigate allegations that Wells Fargo fraudulently opened millions of unauthorized customer accounts. Total refunds, the bank said last week, amounted to about $2.6 million.
The reason why is simple: The Wells Fargo employees were gaming the system in an attempt to hit cross-selling targets and pocket bonuses.
More than 5,000 Wells Fargo employees have been fired as a result of a scandal involving workers who secretly set up fake bank and credit card accounts. Wells Fargo said it would defend itself.
“Our entire culture is centered on doing what is right for our customers”, stated John Stumpf, Chairman and CEO of Wells Fargo & Company, in an email message to Wells Fargo team members.
There’s potential for some level of bipartisanship on the issue – Democrats are outraged, while Republicans are willing to hold hearings to discuss the matter, with the Senate Banking Committee scheduling testimony from Wells Fargo Chief Executive John Stumpf for September 20.
Advertisement
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.
