Wells Fargo cutting sales goal in wake of hefty fine

Wells Fargo pledged September 13, 2016 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.

In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo's CEO John Stumpf fined-for-years-of-harm-to-customers.html">said Tolstedt had been one of the bank's most important leaders and "a standard-bearer of our culture" and "a champion for our customers".

Sen. Richard Shelby, R-Ala., chairman of the Senate Banking Committee, who chairs the committee, is set to hold committee hearings probing Wells Fargo about how more than 2 million credit card and bank accounts were opened in the names of the bank's customers. The head of Office of the Comptroller of the Currency, a banking regulator, said its $35 million penalty would "demonstrate that such practices will not be tolerated and banks will be held responsible". Employees have said that these unrealistic targets led to a pressure cooker environment that prompted them to create millions of fake accounts.

"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.

These customers were left in the dark for months - and possibly years, mysteriously receiving minor charges that many never even realized were there to begin with. The fallout from the scandal resulted in the firing of 5,300 employees and a massive $185 million fine levied by various regulators.

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The hearing is expected to focus at least in part on whether the bank should demand the return of bonuses from top executives. The ratio hovers around six, which means every Wells Fargo household has on average six different types of products with the bank. "Pretty much every customer takes an hour", Khalid Taha, a former Wells Fargo employee, told the Guardian in 2015.

The bank will "take a big wide fresh look at who knew what and when and what else might have been done", he said speaking at an industry conference. "We deeply regret what happened and we are committed to making it right", Richele J Messick, a Wells Fargo spokeswoman, said in an email. If that occurs on a large-enough scale, "that will be devastating to Wells Fargo's business", he notes.

The "deficiencies" uncovered by the U.S. Consumer Financial Protection Bureau and other government investigators show that the bank's "vaunted cross-selling capabilities were inflated", Moody's said in a report.

"Twice when I was dealing with WF I had over $7500.00 stolen from my account", said Sharon of Halethorpe, Md., in a recent ConsumerAffairs review.