For years, Wells Fargo employees secretly issued credit cards without a customer’s consent. They created fake email accounts to sign up customers for online banking services. They set up sham accounts that customers learned about only after they started accumulating fees.On Thursday, these illegal banking practices cost Wells Fargo $185 million in fines, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest such penalty the agency has issued.Federal banking regulators said the practices, which date back to 2011, reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks. The bank has fired at least 5,300 employees who were involved.In all, Wells Fargo employees opened roughly 1.5 million bank accounts and applied for 565,000 credit cards that may not have been authorized by customers, the regulators said in a news conference. The bank has 40 million retail customers.
Banking regulators said the widespread nature of the illegal behavior showed that the bank lacked the necessary controls and oversight of its employees. Ensuring that large banks have tight controls has been one of the central preoccupations of banking regulators after the mortgage crisis.Wells said the employees who were terminated included managers and other workers. A bank spokeswoman declined to say whether any senior executives had been reprimanded or fired in the scandal.
UPDATE: As this article points out, the most egregious part of the "settlement" is that the sociopath executives who run Wells Fargo didn't even have to admit wrongdoing.
"Classic Wall Street" indeed. Another victory for big bank thugs and the Keystone regulators who enable them.But with its banking regulators, Wells Fargo was not as contrite. The bank agreed to pay $185 million in fines and hire an independent consultant to review its sales practices, but it was able to settle the investigation into the questionable accounts without officially admitting to any of the suspected misconduct.It was classic Wall Street. Since the financial crisis, regulators have brought dozens of cases against banks and other financial firms, hitting them with tens of billions of dollars in fines and requiring the companies to overhaul their business practices. But frequently, regulatory cases are settled without a bank having to admit doing anything wrong.