Wells Fargo may be facing the largest fine ever levied by the Consumer Financial Protection Bureau after it was revealed employees opened up thousands of fake accounts, but the company’s chief financial officer, John Shrewsberry, said it isn’t a systematic problem at the company, just some bad seeds — or, in this case, underperformers.
Speaking during the Barclays 2016 Global Financial Services Conference in New York on Tuesday (Sept. 13), the CFO of embattled Wells Fargo said: “These bad practices were not a revenue-generating activity. It was really more at the lower end of the performance scale, where people apparently were making bad choices to hang on to their job.” According to a report, Shrewsberry went on to say the company is getting rid of banking product sales goals, which he said would create a culture in which its employees are compliant with the regulations.
Wells Fargo said that it has reviewed millions of accounts and that, in as many as 1.5 million deposit accounts and 565,000 credit card accounts, it can’t rule out that some were unauthorized. The bank said 115,000 of the accounts incurred a fee that Wells Fargo has given back to customers. Wells Fargo has cut 5,300 staffers for opening unauthorized accounts, and Shrewsberry said about 10 percent were branch managers or senior employees.
Late last week, the Consumer Financial Protection Bureau announced Wells Fargo agreed to pay a $185 million fine and refund $5 million in fees that the bank wrongly charged customers. According to an investigation by the CFPB, Wells Fargo employees not only made fake deposit accounts but also submitted 565,443 unauthorized credit card account applications on behalf of unknowing customers. It’s estimated that 14,000 of those accounts accrued $403,145 in fees. Through its own independent investigation, the bank discovered a total of $2.6 million in unauthorized fees.
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