Wells Fargo Cutting Sales Goal in Wake of Hefty Fine

Wells Fargo Cutting Sales Goal in Wake of Hefty Fine

Even U.S. Treasury Secretary Jack Lew weighed in on the Wells Fargo scandal, calling it a "wake-up call". That practice allowed employees to meet sales targets and earn bonuses. A customer who opened a checking account would be encouraged to consider a debit card or savings account.

The huge package was accrued over her two-plus decades at Wells Fargo and was not directly tied to her retirement.

Wells Fargo has said it has responded swiftly to the crisis. The bank on Tuesday said it would eliminate all product sales goals in retail banking beginning January 1. Warren Buffett's Berkshire Hathaway is the biggest shareholder in the bank with more than nine percent.

This unsavory episode rekindled fears about the honesty of the banking industry. Regulators with the Consumer Financial Protection Bureau said Wells Fargo employees engaged in the chicanery because their compensation was tied to opening up new accounts.

The pursuit of cross-selling was at the heart of the pressure cooker environment described by Wells Fargo employees to CNNMoney.

Roughly 5,300 employees at Wells Fargo were fired in connection with this behavior, according to the city attorney's office.

"These bad practices were not a revenue-generating activity", said Shrewsberry.

At midday, shares of Wells Fargo were down 3.4 per cent at US$46.91.

Tracing the Trail Higher Up: "Who else is responsible for this at a higher level?" asks Conti-Brown.

The Senate Banking Committee plans to hold a hearing September 20 on San Francisco-based Wells Fargo, following last week's enforcement case in which regulators accused bank employees of opening deposit and credit-card accounts without approval to meet sales goals. "The story has just begun". "It took five years to settle this [latest] claim".

According to the CFPB, more than 1.5 million unauthorized deposit accounts may have been opened and may have been funded by unauthorized transfers, resulting in $2 million in fees for overdrafts and failure to maintain minimum balances. "Meanwhile, banks have made a lot of money - so it is a big problem".

"We believe this decision is both good for our customers and good for our business", Wells Fargo CEO John Stumpf said.

In a conference call Tuesday, the bank's chief financial officer said a third-party review of 93 million deposit and credit card accounts opened since 2011 found about 115,000 incurred fees that may not have been warranted. "I never want to go hunting for weird charges [on bank statements]".

Wells Fargo has come under fire from politicians since the fines were announced Thursday. "This seems de rigueur for Wells Fargo", she says.

Which Safe Haven Next? The ratio hovers around six, which means every customer of Wells Fargo has on average six different types of products with the bank.

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