Wells Fargo has said it fired 5,300 employees for secretly opening unauthorized deposit and credit card accounts – conduct that resulted in $185 million in fines announced Thursday – but the bank isn’t providing many details.
Wells spokesman Mary Eshet said Friday that the employees included “both managers and team members,” but she did not provide any specifics on the levels of the employees or where they were located. The workers were terminated between January 2011 and March 2016, with the number of firings declining since 2013, she said.
The 5,300 employees is equal to about 2 percent of the San Francisco-based bank’s current total workforce, which was about 268,000 at the end of June. The community bank group, which is home to the consumer operations snared in the settlement, has about 94,000 employees.
Charlotte is Wells’ biggest employee hub with more than 23,000 employees in a wide variety of business lines.
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The bank agreed Thursday to a settlement with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the City and County of Los Angeles for “widespread illegal practices” in which employees secretly opened accounts to meet sales targets and receive bonuses.
Wells employees opened more than 2 million deposit and credit card accounts that may not have been authorized by consumers, regulators said, citing the bank’s own analysis.
Thousands of the bank’s employees “engaged in improper sales practices to satisfy sales goals and earn financial rewards under (the bank’s) incentive compensation program,” the CFPB consent order says.
The bank agreed to the settlement without admitting or denying wrongdoing. In a statement, the bank said: “We regret and take responsibility for any instances where customers may have received a product that they did not request.”
The bank’s consent order with the OCC, which regulates national banks, faults the community bank group for its sales practices and incentive programs. That group has 6,000 branches in 39 states and Washington, D.C., and serves more than 20 million retail checking households and 3 million small business owners.
“The incentive compensation program and plans within the Community Bank Group were not aligned properly with local branch traffic, staff turnover, or customer demand, and they fostered the unsafe or unsound sales practices (covered by the order) and pressured bank employees to sell bank products not authorized by the customer,” the order says.
The community bank group “failed to adequately oversee sales practices,” the order adds.
The head of the community bank during the period under scrutiny was Wells Fargo veteran Carrie Tolstedt, who announced in July that she had decided to retire at the end of the year at age 56. Based in San Francisco, she was one of the bank’s top-paid executives in 2015, making $9.1 million in salary, bonus and stock awards.
Tolstedt “just made a personal decision to retire at the end of 2016,” Eshet said, declining to comment further on her departure.
The bank named Mary Mack as the new leader of the unit, effective July 31. She joined Wells through its 2008 acquisition of Charlotte-based Wachovia and remains based here.
Wells is the second-biggest bank by deposits in the Charlotte metro area, with 91 branches, according to Federal Deposit Insurance Corp. data.