Wells Fargo CEO Tim Sloan appeared before the Senate Banking Committee today to provide an update on the steps the bank has taken over the past year to mitigate damages resulting from unauthorized accounts that were opened by Wells Fargo employees to meet sales goals. Sloan emphasized that the company has made “fundamental changes” to its operations and that “Wells Fargo is a better bank today that it was a year ago.”
The company has taken steps to centralize its risk management functions, and has established a conduct management office that is responsible for handling and investigating employee complaints and ethics concerns. Wells Fargo has also clawed back or cut $180 million in compensation for senior and executive management, Sloan said.
The bank — which has been actively reaching out to potentially affected customers — will pay a total of $142 million in compensation through a class-action settlement, Sloan said, adding that Wells Fargo is committed to compensating any customer that may have received an unwanted product or service. The bank has also re-hired more than 1,700 Wells Fargo employees who left the bank or were fired as a result of the bank’s previous cross-selling practices.
Between 2009 and 2016, an estimated 3.5 million unauthorized accounts were opened at Wells Fargo, of which approximately 190,000 incurred fees or other charges. A company-wide review of Wells’ sales practices also revealed that the bank force-placed auto insurance for certain auto loan customers that were already covered by a car insurance policy.
