Of the 5,300 employees who were fired over five years due to improper selling, Mr. Stumpf said these included bankers, managers and managers of those managers.
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The settlement agreement with Wells Fargo was reached following allegations bank employees opened more than 2 million unauthorized deposit and credit-card accounts, according to CFPB. Wells Fargo had set a goal of selling each customer at least eight financial products – a credit card or savings account on top of an existing checking account, for example – up from its current average of 6.27 per customer. To regain the trust of its customers, the company has announced to eliminate its product sales goals in its retail banking segment. The embattled bank says the change, announced early Tuesday, will be effective January 1.
Overnight, shares in Wells Fargo dropped a further 3.3%, taking its market cap to $236bn, falling below JPMorgan Chase for the first time since 2013. According to USA Today, Shrewsberry told an audience at a financial services conference today that “unauthorized customer account activity peaked in 2013 and two-thirds were concentrated in the southwest U.S.”.
“Spurred” is a little mild, considering that CNNMoney reports that a “pressure-cooker environment” at Wells Fargo resulted in employees engaging “in all kinds of sordid practices”. Wells Fargo is not as problematic as some of the others. “It should remind all of us and firms that culture and compensation make a difference”, he said.
Creating phony email addresses to enroll consumers in online-banking services: Wells Fargo employees created phony email addresses not belonging to consumers to enroll them in online-banking services without their knowledge or consent. She announced earlier this year that she would retire from Wells at the end of 2016.
The practice of opening new accounts without authorization is known as sandbagging, and it costs each account holder up to in fines, according to the New York Daily News. The Wells Fargo disaster should have been a key media moment for Clinton to reassert her potential role as consumer protector in chief. We hope it helps Congress understand that we need to fine-tune Dodd-Frank, not gut it, and that the Consumer Financial Protection Bureau must be strengthened, not killed.
“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.
Torrie Matous, a spokeswoman for the committee’s chairman, Richard Shelby, a Republican from Alabama, said staff has “been arranging briefings and collecting information from both Wells Fargo and the regulators” to prepare for a hearing on September 20.
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Stumpf, who made $19 million previous year, did not respond to questions about when he learned about the sham accounts. Elizabeth Warren and four other lawmakers on Monday called for Wells Fargo CEO John Stumpf to testify on what she called a “staggering fraud”.
