Wells Fargo did not comment on Tolstedt’s compensation, which CNNMoney calculated from regulatory filings. A crucial difference between Wells Fargo and its peers is that the San Francisco-based lender highlighted its cross-selling statistics on annual reports and boasted about the data to analysts.
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In fact, even as a non-customer, I am really mad at the disgraceful actions of some 5,300 now-terminated Wells Fargo workers.
In his statement, Stumpf said, “We are eliminating product sales goals because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers”. Tolstedt’s has earned a base salary of $1.7 million for at least the last four years, according to Securities and Exchange Commission filings.
Wells Fargo is being asked to turn over documents related to the scandal. The dummy accounts charged individual customers up to $50 in fines for a service they never requested, The New York Daily News reported. Michigan State University professor of economics and global relations Lisa Cook worries that such a profit model is common across the industry and that other banks, too, may be guilty of similar practices.
Just in case you weren’t outraged enough at the fact that thousands of employees at Wells Fargo (NYSE:WFC) fraudulently opened millions of accounts for customers without their consent, then I have a chart for you.
The bank’s shares dropped more than 2 percent to $47.12 in morning trading Tuesday. “Fees are a critical part of the profit model for banks in the U.S”. In fact, a lawsuit filed by Los Angeles against Wells Fargo in May 2015 says that the bank was consumed by this goal.
Strong Corrective Action Is Needed: “The CFPB needs to follow the trail doggedly”, says Cook. “It took five years to settle this [latest] claim”.
About 115,000 of the likely unauthorized accounts had incurred fees that were not warranted. “Meanwhile, banks have made a lot of money – so it is a big problem”. On Monday evening, the Senate Banking Committee’s Republican majority said it would hold a hearing next week into Wells Fargo’s sales practices and invite Wells Chief Executive John Stumpf to appear.
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. Tolstedt headed the infamous community banking unit where employees created unauthorized deposit accounts and credit accounts in an effort to meet sales goals. Is it any wonder why the trust in banks is so understandably low?
REGULATOR: Fines have been previously accrued but Wells has risks with reputation and controls.
What was Wells Fargo fully up to?
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Which Safe Haven Next? The bank encouraged “pervasive inappropriate practices” and managers didn’t provide oversight of employees, Moody’s said. As MarketWatch pointed out, a database of grievances compiled by the agency shows Bank of America in the lead with 4,901 complaints against the company in the category of “account opening, closing or management”. Essentially, customers had no idea the accounts were opened; it was done as an underhanded way to boost the metrics for the company’s retail banking sector. Today’s millennial generation prefers online banking, while the previous generation sees relationship banking as important, he adds.
