Dive Brief:
- Wells Fargo is going to fork over $185 million in penalties and $5 million to customers that government regulators contend were not-so-gently driven into fee-generating accounts and services that, in most cases, they never wanted, according to various media outlets.
- In the case, which dates back to 2011, the Consumer Financial Protection Bureau (CFPB) will receive $100 million of the total penalties — the largest fine ever levied by the agency, which was conceived after the 2008 financial crisis.
- In a complaint filed in May 2015 in California, prosecutors alleged that Wells Fargo's plan was to steer all levels of checking account customers into savings, credit and online accounts that could generate fees for the bank.
Dive Insight:
Wells Fargo paying a hefty fine while not admitting any wrongdoing is common, but the situation begs the question: Where was Wells Fargo's HR leadership in all of this? Some observers see it as a case of the company blaming the 5,300 workers for its misdeeds, taking little or no responsibility for what occurred. Others say that there is no way that many employees could have conspired to carry out the underhanded activities without some sort of direction from above. In other words, the "rogue" employee explanation just doesn't fly.
Was Wells Fargo's HR leadership totally out of the loop with this type of product-driven training? These were not high-powered salespeople, but primarily bank tellers. When their effort to sell honestly failed, they "cooked the books," so to speak, by creating false accounts, perhaps revealing issues in training at an associate level, at least.
Also of note: The executive who headed that specific department within Wells Fargo will leave the company at year's end with $125 million in her pocket along with glowing praise from the CEO.
