Wells Fargo & Company (NYSE:WFC) announced today that it has received a
report containing the findings of an investigation conducted by its
Board’s independent directors into the Company’s retail banking sales
practices. The Board’s independent directors engaged the law firm of
Shearman & Sterling LLP in September 2016 to assist in the
investigation. The full report
is available at the Investor Relations section of www.wellsfargo.com.
In commenting on the Board’s findings, Wells Fargo CEO and President Tim
Sloan said the investigation’s conclusions mark an important moment for
the company.
“We accept the Board’s findings as a critical part of our journey to
rebuild trust,” Sloan said. “While we have already made significant
progress in making things right with customers and addressing issues,
including several issues identified in the investigation, the Board’s
comprehensive findings provide another important opportunity to learn
from our mistakes and take action to improve the way we operate, serve
customers, and lead our team members.
“The Board’s report is a necessary examination of what went wrong in our
culture, operations, and governance. It’s clear from the Board’s review
that we had an incentive program and high-pressure sales culture in our
Community Bank that over time drove behavior that in many cases was
inappropriate and inconsistent with our values. Because of our
decentralized operating model, our corporate leadership took too long to
understand the seriousness and scope of the problem, and, as a result,
the actions we took over the years to address it weren’t adequate.”
Sloan said the company will continue to review the report to incorporate
its key findings into ongoing efforts to build a better and stronger
Wells Fargo. He also cited significant actions the company has taken in
recent years and since September to ensure that the unacceptable retail
sales practices in the Community Bank that were the subject of
settlements with the Office of the Comptroller of the Currency, the
Consumer Financial Protection Bureau, and the City Attorney of Los
Angeles do not happen again.
“Nothing is more important to Wells Fargo’s future than ensuring we have
a culture and operating model that works for all our stakeholders – our
customers, team members, investors, and communities,” Sloan said. “With
that principle in mind, we will ensure this report becomes a powerful
complement to the ongoing self-examination of our culture and practices
that we have been conducting as a leadership team and a company.
“We’ve changed leadership; held executives accountable; changed how we
compensate and lead our retail bankers; centralized key control
functions, such as risk management and human resources; and taken steps
to promote a workplace where team members are encouraged to raise
concerns. We have also retained independent third parties to provide
their advice and feedback to help us identify possibilities for
additional improvements across the company.
“Our intent is clear: the practices and pressures that harmed our
customers, our team members, and our brand and reputation will never be
allowed to occur again.”
Sloan added that any customers with questions about their accounts
during any time period should contact their Wells Fargo banker, visit www.wellsfargo.com/commitment,
or call 1-877-924-8697.
Separately, Wells Fargo recently published an interactive
progress report timeline that details actions taken prior to today’s
announcements, including the following:
Making things right for customers
-
Refunded approximately $3.2 million to approximately 130,000 retail
and small business accounts.
-
Reached out to approximately 40 million retail customers and 3 million
small business customers through statement messaging, other mailings,
and online communications, asking them to contact us with any concerns.
-
Reached an agreement in principle to settle a class action lawsuit for
$110 million, which will be set aside to remediate customer harm.
-
Committed to addressing the issues of any customer whose credit might
have been affected by unauthorized account openings.
-
Dedicated ourselves to fulfilling our obligations under regulatory
agreements.
Making fundamental changes to create a better Wells Fargo
-
Eliminated product sales goals and changed how we pay our retail
bankers.
-
Invested in our people, increasing the pay for our entry-level team
members across the country.
-
Strengthened our ethics and risk management, including creating a new
Office of Ethics, Oversight, and Integrity; adding protections so
anyone can feel safe reporting his or her concerns to our Ethics Line;
and expanding our training for our managers and bankers, so they can
better respond.
Holding leaders accountable
-
Changed leadership at our Community Bank.
-
Terminated executives linked to inappropriate sales practices.
-
Instituted forfeitures and clawbacks, and made compensation
adjustments, with respect to senior leaders, totaling more than $180
million.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based
financial services company with $1.9 trillion in assets. Founded in 1852
and headquartered in San Francisco, Wells Fargo provides banking,
insurance, investments, mortgage, and consumer and commercial finance
through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com)
and mobile banking, and has offices in 42 countries and territories to
support customers who conduct business in the global economy. With
approximately 269,000 team members, Wells Fargo serves one in three
households in the United States. Wells Fargo & Company was ranked No. 27
on Fortune’s 2016 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy our customers’ financial needs and help
them succeed financially. In 2015, Wells Fargo donated $281.3 million to
16,300 nonprofits, ranking No. 3 on the Chronicle of Philanthropy’s
rankings of the top corporate cash philanthropists. Wells Fargo team
members volunteered 1.86 million hours in 2015, serving more than 40,000
nonprofits. Wells Fargo’s corporate social responsibility efforts are
focused on three priorities: economic empowerment in underserved
communities, environmental sustainability, and advancing diversity and
social inclusion. News, insights and perspectives from Wells Fargo are
also available at Wells Fargo Stories.
