According to regulators, thousands of Wells Fargo employees were allegedly involved in a widespread scheme to reach aggressive sales goals – and earn bonuses – by creating 2 million accounts, including credit cards, customers didn’t authorize.
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“This morning we took the further step of announcing the elimination of sales goals in retail banking”, effective January 1, he said.
Wells Fargo’s practices of putting customers into fake accounts, which last week led the US government to fine the bank $190 million, took center stage in Congress on Tuesday with staff members for the Senate Banking Committee set to meet with representatives of the bank.
Wells Fargo pledged Tuesday to eliminate product sales goals in retail banking as it works to win back trust following a crackdown last week by a federal consumer watchdog.
The U.S. Attorney’s Offices in Manhattan and San Francisco are investigating Wells Fargo, the person said, following a settlement announced on September 8 over claims that some customers were pushed into fee-generating accounts they never requested.
Wells Fargo has said it’s responded to the scandal by investing in compliance measures like secret shoppers and more oversight.
Shrewsberry said the review would impact people “at all levels of the organization”. California authorities accounted for the rest.
The bank will pay $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles.
Wells Fargo has refused to say if it is considering implementing its executive compensation clawback provisions regarding Tolstedt.
“A trusted colleague and dear friend, Carrie Tolstedt has been one of our most valuable Wells Fargo leaders, a standard-bearer of our culture, a champion for our customers, and a role model for responsible, principled and inclusive leadership”, said Chairman and CEO John Stumpf at the time.
“The regulators’ findings are consequential for a bank such as Wells Fargo, which historically has had strong customer satisfaction scores and a reputation for sound risk management”, Moody’s analyst Allen Tischler wrote. Fortune reported on Monday that the executive who head of the division that at the center or the settlement, Carrie Tolstedt, left the bank in July with almost $125 million in stock, options and restricted shares.
While customers may be forgiving, the market has not been: Wells Fargo shares fell more than 5 percent since the scandal broke Thursday. Warren Buffett’s Berkshire Hathaway is the biggest shareholder in the bank with more than nine percent.
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Mr. Stumpf is slated to appear Tuesday before the Senate Banking Committee at a hearing that will focus on Wells Fargo’s sales practices.
