Another federal agency is scrutinizing Wells Fargo’s diversity hiring procedures
Another federal regulator is looking into Wells Fargo’s hiring practices, according to the bank’s most recent quarterly securities filing.
The Securities and Exchange Commission is scrutinizing the bank’s hiring work related to diversity, the filing stated in a section disclosing legal actions against the bank. The Justice Department is also among the government agencies undertaking “formal or informal inquiries or investigations” into the matter, the disclosure stated.
The regulatory scrutiny follows reports from earlier this year that Wells Fargo offered phony interviews to female applicants or candidates of color to prop up the bank’s diversity efforts.
In May, a New York Times story stated that Wells Fargo conducted job interviews with candidates that improved the bank’s diversity initiatives on paper, even when those positions had already been promised to other candidates.
Wells Fargo paused the policy that led to the interviews in June, and revamped its hiring guidelines a few months later.
In September, the bank announced that it would commission a third-party racial equity audit to focus on “elements of Wells Fargo’s efforts to serve diverse communities and promote a diverse workforce.”
The diversity hiring practices are also a subject of a federal class action lawsuit in California, and a federal shareholder added derivative lawsuit in the same state, according to the securities filing.
The bank declined to comment about the SEC involvement Wednesday.
Wells Fargo is based in San Francisco but has its largest employment base in Charlotte, with more than 27,000 workers here.
Recovering from scandals
This year has been another one of harsh scrutiny for Wells Fargo.
In March, a Bloomberg investigation found that the bank approved fewer than half of Black homeowners’ mortgage refinancing applications in 2020, compared with 72% of white applicants. That led to a class-action lawsuit against the bank.
And 11 senators called for a review of the bank’s mortgage refinancing processes.
In September, the bank reached a $145 million settlement with the U.S. Department of Labor following an investigation into concerns over the the bank’s contributions to its 401(k) plan.
Lawmakers and regulators have kept a close eye on Wells Fargo over the last several years. That traces back to the bank’s 2016 fake accounts scandal, when employees created millions of fraudulent accounts for customers without their knowledge.
This story was originally published November 2, 2022 at 11:28 AM.
