No Surprise, Wells Fargo

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
In September 2016, Wells Fargo fired 5,300 employees. These sorts of mass layoffs have become common in banking throughout the post-crisis era, especially those years of the ‘rising dollar.’ This was different, however, as Wells was not cutting back in capacity but dealing with the aftermath of being far too aggressive. These employees were found to have opened secret and unauthorized customer accounts to charge fees in order to meet sales targets and therefore bonuses.
An internal investigation suggested as many as 1.5 million deposit accounts were created for this, as were 565,443 credit card applications. The Consumer Financial Protection Bureau (CFPB) issued Wells a record $185 million in fines and ordered $5 million in restitution. In a memo to employees, the bank, as they all do, stood by its commitment to customers.
At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action.
OK. Yesterday, the New York Times reported that once more Wells Fargo might have been doing wrong, this time having charged as many as 800,000 auto loan customers for auto insurance they didn’t need or want.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ July 28, 2017.