Wells Fargo comes under fire
One of the country’s leading banking companies is under extreme scrutiny over a scandal which allowed employees to open user accounts without their customer’s knowledge or authorization. On September 8th, it became public knowledge that Wells Fargo Bank was being fined for $185 million by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the Los Angeles City Attorney. The case against the bank was that an alleged two million bank accounts or credit card accounts were applied for and then opened without their consumer’s knowledge or permission between 2011 and 2015. This also allowed Wells Fargo employees to increase their sales figures; sending shockwaves across the company as well as the general public.
Shortly after the news went public, Wells Fargo released a statement explaining they had terminated over 5,300 employees who played a role in the fraud allegations and that they “regret and take responsibility for any instances where customers may have received a product that they did not request”. Since this revelation Wells Fargo has been under fire from not only the public, but from the U.S. Senate Banking Committee.
On September 20th, Wells Fargo CEO John Stumpf appeared at a hearing of the case where he personally apologized, saying he was “deeply sorry” for tactics that “failed to fulfill our responsibilities to our customers, our team members and the American public”. Senator Elizabeth Warren, who is known for her striking positions on the country’s banking systems strongly criticized Stumpf for his lack of leadership, and his company’s “scam”. Warren began questioning Stumpf by reciting the Wells Fargo Vision and Values Statement, reading “If you want to find out how strong a company’s ethics are, don’t listen to what its people say, watch what they do”. She then took to Stumpf accusing him for not holding anyone accountable, then suggesting he resign and returning all of his earnings from the time frame these ghost accounts were created.After the initial hearings Warren took to Twitter to further express her stance on the scandal, explicating that in the end CEO Stumpf “will be just fine” as he gets to keep his job, and most of the money he made while massive fraud was taking place under his leadership, again suggesting he “return every nickel he made while this scam”. Warren went so far as to strongly present the idea of Stumpf being under criminal investigation stating “you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission. This just isn’t right”.
On Tuesday, September 27th, Wells Fargo announced that Stumpf will forfeit $41 million in his stock awards, as well as leave his 2016 bonus and will not be paid his normal salary as the board launches an investigation into the fake accounts. However, Senator Warren still isn’t pleased. She feels a double standard exists in Stumpf’s ability to hold his position with the company. She claims that employees who failed to appease the management’s “outrageous” sales goals were fired, and those who attempted to uncover the fraudulent activity under the company were terminated when Wells Fargo’s ethics line was contacted stating “their lives turned upside down”, for trying to do what was right.
Several former Wells Fargo staff members told CNN Money this was indeed the case. Pennsylvania banker at Wells Fargo Bill Bado says “they ruined my life.” Bado was fired in 2013 for “eight days of tardiness” after sending a concerned email to human resources in which he detailed the unauthorized accounts. Elizabeth Warren, having a fearless reputation, has held nothing back when taking down Wells Fargo and John Stumpf. As more information is made public, and investigations into Wells Fargo continue, look for Senator Warren to be on the front lines confronting Wells Fargo, and other bank’s fraudulent activity.