Wells Fargo Rehires 1,800 As it Faces Calls for Closure
Wells Fargo Advisors’ parent company continues to try and make amends over last year’s fake-account scandal, but a top Democrat is now calling for shutting down Wells Fargo entirely, according to recent reports.
Wells Fargo’s CEO Tim Sloan apologized for the millions of bogus credit and deposit accounts its employees had opened over the years and said the bank has hired back close to 1,800 staff who had quit or had been dismissed for refusing to go along with the practice, according to prepared congressional testimony cited by Reuters.
The bank’s employees opened up to 3.5 million fake accounts without clients’ approval over the course of more than a decade, the newswire writes, and the bank settled with regulators for $190 million last year for the practice.
The bank has said it fired more than 5,300 workers who had opened bogus accounts, but “many more” employees were forced out or left the firm because they disagreed with the tactics, Reuters writes. According to Sloan’s prepared testimony, which he’s scheduled to present Tuesday to the Senate Banking Committee, Wells Fargo has rehired 1,780 of them since last year’s settlement, the newswire reports.
Nonetheless, Sloan added that the bank had expected to find more instances of misconduct through followup investigations — and did, according to Reuters. In addition to the number of fake accounts turning out to be closer to 3.5 million than the two million mentioned as part of last year’s settlement, the bank has since been sued for excessive refinancing and merchant fees, sexual harassment, retaliatory dismissal and misuse of investors funds.
Rep. Maxine Waters, D-Calif., the top-ranking Democrat on the House Financial Services Committee, thinks the non-stop scandals may be enough to close down the bank, according to CNN.com. In a recent report prepared by the Democratic staff of the committee, Waters says regulators should have been tougher with Wells Fargo, the news website writes.
“When a megabank has engaged in a pattern of extensive violations of law that harms millions of consumers, like Wells Fargo has, it should not be allowed to continue to operate within our nation’s banking system,” the report said, according to CNN.
Analysts, however, say Wells Fargo isn’t likely to lose its banking charter in part because of its sheer size: the firm employs 210,000 people who serve 70 million customers, the news outlet writes.