After setting aside $14 billion in the first three quarters to amortize bad loans, Wells Fargo is no longer stockpiling cash. The bank moderately reduced its reserve levels in the last three months of 2020, underscoring the improving economic outlook for the U.S. economy. Despite earlier reports in the Los Angeles Times, the controversy only gained national attention in September 2016, when the Consumer Financial Protection Bureau announced that the bank would be fined $185 million for its illegal activities. The Bureau of Consumer Financial Protection received $100 million, the Los Angeles Attorney General $50 million and the Office of the Comptroller of the Currency the last $35 million. [12] The fines were widely covered in the media in the following days and attracted the attention of other interested parties. [18] [19] Wells Fargo first announced its diversity initiative and interview program in 2020. In practice, women and minorities were questioned for positions they could not obtain. Wells Fargo`s efforts were aimed at promoting claims that it was considering different candidates for leadership positions, but should avoid increasing the actual number of diverse employees. The fictitious practice was developed to meet regulatory expectations in the event of an audit. While the fraudulent accounts scandal and the fraudulent overpayment of foreign exchange services are different problems, both seem to stem from a work culture that pushes employees to achieve overly demanding goals and encourages disrespect for customers. Regarding account fraud, Wells Fargo admitted that it pressured employees to meet “unrealistic sales targets that led thousands of employees to provide millions of accounts or products to customers under false pretenses or without consent.” The Department of Justice and the Securities and Exchange Commission reached a settlement with the bank in February 2020 for a total fine of $3 billion to address the bank`s criminal and civil violations.

However, this settlement does not extend to future litigation against individual employees of the Bank. [50] On September 8, 2016, the CFPB fined Wells Fargo $100 million for its “widespread illegal practice of secretly opening unauthorized accounts.” The order also required Wells Fargo to pay about $2.5 million in refunds to customers and hire an independent consultant to review its procedures. [33] The past five years have not been good for Wells Fargo, one of the “Big Four” banks in the country. The institution has been embroiled in legal issues since it was discovered that millions of accounts were created without the client`s consent. John Shrewsberry, the bank`s chief financial officer since 2014, announced his resignation in mid-2020. Mike Santomassimo, a lieutenant of BNY`s Scharf, replaced him.[69] [70] Tim Sloan, who became CEO after Stumpf, later resigned in March 2019 under pressure from the scandal. [65] He was replaced by Charles Scharf, former CEO of Visa and BNY Mellon. Scharf was appointed in hopes of restoring the bank`s reputation with regulators,[66] after overseeing BNY Mellon`s turnaround efforts.

As of October 2020, Scharf had not presented a comprehensive plan to resolve the bank`s problems; [67] This plan, announced in January 2021, was met with skepticism by industry analysts. [68] Maxine Waters, chair of the House Financial Services Committee, announced in early 2019 her intention to further investigate the bank. He had previously published a report on the bank`s misconduct and called on the government to dissolve the bank. [47] [48] Former Wells Fargo President Elizabeth “Betsy” Duke and James Quigley resigned on September 9. March 2020, three days before the House Financial Services Committee hearings on the fraud scandal. [49] In November 2020, the SEC filed a civil lawsuit against two former senior executives, Stumpf and Tolstead, accusing them of misrepresenting KPIs to investors. [51] More than four years after the Wells Fargo (WFC) scandal involving fake accounts broke out, the bank on Friday reported an additional $321 million in quarterly losses related to customer refunds. That brings Wells Fargo`s (WFC) total for 2020 to what it calls customer remediation to a staggering $2.2 billion.