Wells Fargo cutting sales goal in wake of hefty fine

NEW YORK -- Wells Fargo will cut product sales goals for retail bankers, days after the bank was fined $185 million for allegedly illegally opening unauthorized accounts for its customers.

Wells was hit with the record fine on Thursday for covertly opening some 2 million unauthorized customer credit card and deposit accounts, draining real accounts to fund them, and charging fees for services the customers didn’t request.  

The fines came from a combination of California and federal regulators who alleged that the practice was being used to meet aggressive sales goals. The Consumer Financial Protection Bureau fined the bank $100 million of the total, marking the largest fine levied against a financial institution by the agency since its creation five years ago. California authorities accounted for the rest.

Wells Fargo (WFC) will eliminate the sales goals by Jan. 1, according to a statement. 

During a conference in New York on Tuesday, the bank’s chief financial officer said a third-party review of 93 million deposit and credit card accounts opened since 2011 found about 115,000 incurred fees that may not have been warranted. “We’ve refunded a total of $2.6 million to those customers, an average of $25 per account,” said Wells CFO John Richard Shrewsberry. 

“These bad practices were not a revenue-generating activity,” said Shrewsberry. “It was really more at the lower end of the performance scale where people, apparently, were making bad choices to hang on in their job.”

About 5,300, or approximately 1 percent of the bank’s employees have faced disciplinary actions including termination as a result of the findings, the executive added. 

Shares of the bank were down 3 percent in late morning trading Tuesday.