Wells Fargo Says 3.5 million Accounts Involved in Scandal

AP via Houston Chronicle | August 31, 2017           The scope of Wells Fargo's fake accounts scandal grew significantly on Thursday, with the bank now saying that 3.5 million accounts were potentially opened without customers' permission between 2009 and 2016.

That's up from 2.1 million accounts that the bank had cited in September 2016, when it acknowledged that employees under pressure to meet aggressive sales targets had opened accounts that customers might not have even been aware existed. People may have had different kinds of accounts in their names, so the number of customers affected may differ from the account total.

Wells Fargo said Thursday that about half a million of the newly discovered accounts were missed during the original review, which covered the years 2011 to 2015.  Read more here.

Morning Agenda: The Wells Fargo Clawback

The New York Times | April 11, 2017         How could this have happened? You might have wondered after the scandal over fraudulent accounts at Wells Fargo.

Most of the blame has been pinned on two people: John G. Stumpf, the former chief executive, and Carrie L. Tolstedt, the former head of community banking.

To meet sales goals set by Ms. Tolstedt, bankers across Wells Fargo committed fraud, opened unwanted or unneeded accounts, and occasionally moved money in and out of the sham accounts.

The board of the bank will claw back $75 million from the two former executives, the largest forced return of pay and stock grants in banking history.  Read more here.

Voices From Wells Fargo: ‘I Thought I Was Having a Heart Attack’

The New York Times | October 20, 2016     The scandal at Wells Fargo over the creation of unauthorized accounts shook its customers’ faith in the bank, but it took an even sharper toll on the company’s workers. A number of them say they faced a stark choice: Create new accounts by any means possible, or risk being fired for falling short of their sales goals.

Several former Wells Fargo employees gave The New York Times firsthand accounts, by email or by phone interview, of how that pressure affected them, and of the ethical shortcuts they say they saw colleagues take. The following are excerpts. Some people asked to be identified only by their first name and last initial, to protect their future employment prospects.

Wells Fargo responded by saying it did not have “specific comments on the team members involved” but wanted to reiterate that the bank had “made fundamental changes to help ensure team members are not being pressured to sell products, customers are receiving the right solutions for their financial needs, our customer-focused culture is upheld at all times and that customer satisfaction is high.”   Read more here.

 

'Wells Fargo isn't the only one': Other bank workers describe intense sales tactics

Most Americans were shocked when they learned that thousands of Wells Fargo employees had opened millions of fake accounts.

CNN | September 22, 2016     People who work at other banks weren't surprised at all.

Nearly a dozen current and former employees at large and regional banks such as Bank of America (BAC), Citizens Bank, PNC (PNC), SunTrust (STI), and Fifth Third (FITB) tell CNNMoney that a sales obsession pervades their banks. They say they too are under immense pressure to get customers to open multiple accounts.

They described a focus to push as many different products -- think debit cards or new online accounts -- as they can, an industry practice known as cross-selling.

"Wells Fargo is not the exception (with its) absurd sales culture," said one former manager of two large regional banks.   Read more here.

 

America's Foreclosure Crisis Isn't Over

CBS News |  January 26, 2016    With Goldman Sachs (GS) recently agreeing to pay $5.1 billion to settle claims related to its role in the 2008 mortgage scandal, the firm became the latest big Wall Street bank to reach a deal with the U.S. government. As part of the settlement, $1.8 billion is to be set aside for programs to help homeowners who are still trying to fend off foreclosure?

Yet nearly seven years since the Great Recession ended, the question remains: How well have these anti-foreclosure programs worked? It depends on whom you ask and where they live.

Back-stopping the nation's banking system was the top federal priority during the height of the 2008 financial crisis. But out of the $475 billion that Congress authorized for the Troubled Asset Relief Program (TARP), $46 billion was supposed to help millions of struggling families avoid foreclosure.

A subsequent 2014 settlement between prosecutors and Bank of America (BAC) netted an additional $16.6 billion, of which then-Attorney General Eric Holder said $7 billion would go to "provide relief to struggling homeowners, borrowers and communities affected by the bank's conduct."

All told, between the programs administered through the Treasury Department -- like the Home Affordable Modification Program (HAMP) -- and the pools of money committed by Wall Street banks as part of their settlements, tens of billions of dollars have been set aside to assist families facing foreclosure by modifying their mortgage terms so they can remain in their homes.  Read more here