Wells Fargo Ordered To Pay $185 Million Fine Over Unauthorized Accounts
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Wells Fargo is being hit with the largest penalty ever imposed by the Consumer Financial Protection Bureau. In total the bank will pay $185 million to the CFPB and other regulators who say employees earn bonuses by illegally creating accounts for customers without their knowledge. NPR's Chris Arnold reports.
CHRIS ARNOLD, BYLINE: Regulators say that Wells Fargo employees violated a sacred trust that people place in a bank. Employees took money out of customers' accounts to secretly open other accounts - checking and savings accounts, credit cards. The employees got bonuses as part of an incentive program at the bank, and customers often got hit with monthly service fees or other charges.
MIKE FEUER: It is outrageous.
ARNOLD: That's Los Angeles City Attorney Mike Feuer, who investigated Wells Fargo along with the CFPB.
FEUER: It's outrageous for a bank to transfer funds without consent from that customer's existing account to fund the unauthorized account.
ARNOLD: In some cases, bank employees created pin numbers for ATM cards also without telling customers. And this is not just a couple of rogue employees at one or two branches. CFPB director Richard Cordray says the illegal practices were widespread across Wells Fargo offices around the country.
RICHARD CORDRAY: Thousands of bank employees - that's thousands of bank employees - found ways to game the system to inflate their sales figures and to meet their sales targets and claim higher bonuses.
ARNOLD: In fact, during its internal review, according to the complaints, Wells Fargo has already fired more than 5,000 employees for improper conduct. Richard Cordray says he wants to put banks on notice that they need to monitor incentive programs.
CORDRAY: Unchecked incentives can lead to serious consumer harm, and that's what happened here.
ARNOLD: For its part, Wells Fargo said in a statement, quote, "we regret and take responsibility for any instances where customers may have received a product that they did not request." But the bank did not legally admit or deny wrongdoing as part of the settlement. Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.