Stumpf also confirmed that none of his personal compensation was tied to the product sales goals from the company, nor was compensation for any of the named executive officers.
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The company also announced Tuesday morning that it will eliminate all product sales goals in retail banking, effective January 1, 2017. Wells Fargo fired 5,300 employees who allegedly created about 2 million fake accounts. That practice allowed employees to meet sales targets and earn bonuses.
Stumpf said Wells Fargo has already taken several steps to strengthening its compliance programs in the wake of the scandal, which resulted in $185 million in fines last week. “It is not acceptable to do things that are created to increase either individual or firm bottom lines by deceiving customers or passing along charges that are either invisible or they don’t know about”.
Torrie Matous, spokeswoman for the committee’s chairman, Richard Shelby, a Republican from Alabama, said staff had “been arranging briefings and collecting information from both Wells Fargo and the regulators” to prepare for a September 20 hearing. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. “Thursday’s announcement is yet another indication that the CFPB is making consumer financial markets safer for consumers and protecting hard-working American families from abusive financial practices”. GOP-backed legislation that would reduce the agency’s authority and overhaul Dodd-Frank passed the House Financial Services Committee on Tuesday.
“Well, I don’t know if it’s a fraud or a conspiracy because you can’t have 5,300 people involved in that”, Springer said.
“Unfortunately, it’s not surprising that numerous employees took advantage of an incentive system created to spur cross-selling”, Morningstar said.
The behavior was first brought to light by an investigation by The Los Angeles Times in 2013.
A Loss of Trust: “As a bank customer … my reaction was one of horror”, says Conti-Brown of how he felt when he heard about the Wells Fargo findings.
The sales goals were part of Wells Fargo’s aggressive push into “cross selling”, persuading customers to sign up for multiple products. The bank encouraged “pervasive inappropriate practices” and managers didn’t provide oversight of employees, Moody’s said.
He added that Wells Fargo’s headaches are also “quickly becoming a political problem” for big banks in general, providing critics “more ammunition to argue that mega banks are unmanageable”.
The suspension, which does not apply to workers in bank branches, will be reviewed after this week’s call volumes are assessed, she said.
The Senate Banking Committee’s Republican majority said late Monday that it plans to hold a hearing into the bank’s sales pra ctices, where it intends to question Chief Executive John Stumpf.
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Wells Fargo (WFC) stock dropped almost 4% on Tuesday after the bank announced plans to abandon its sales targets where customers were sold multiple bank products.
