The largest U.S. bank by market capitalization will pay $190 million for opening two million deposit and credit card accounts that may not have been authorized. Bobbi Rebel reports.
Cross selling financial products has been a boost to Wells Fargo's business, but the pressure on employees to deliver is now costing the company. The bank just reached a $190 million settlement with California prosecutors and federal regulators for opening more than two million deposit and credit card accounts without customer authorization. Of that settlement $5 million will go to customers. $100 million is going to the Consumer Financial Protection Bureau, the largest amount the agency has ever collected. Tony Alexis runs the Office of Enforcement at CFPB. (SOUNDBITE) ANTHONY ALEXIS, ASSISTANT DIRECTOR FOR ENFORCEMENT, CONSUMER FINANCIAL PROTECTION BUREAU, (ENGLISH) SAYING: "I think our fine sends a message directly to Wells Fargo that it cannot breach the trust of its customers who open accounts with them, and expect to shire their money into account in a very specific way. As well as a notice to other financial institutions that they too have to be on guard, and make sure that when they are interacting with customers or have the customers trust that they don't violate the trust and that they show fidelity to the law." The conduct also cost jobs. Wells Fargo fired 5,300 people over "inappropriate sales conduct" in the last five years. Adam Levin, co-founder of IDT911. (SOUNDBITE) ADAM LEVIN, CO-FOUNDER, IDT911, (ENGLISH) SAYING: "One of the big questions you have to ask yourself is, if they started firing people as early as 2011 for conduct like this, how could this not only be permitted to continue, but blossom. That's the real question. That's a failure in leadership." He also points to the overall corporate culture as being responsible and needing to change. .