Bank Regulation

Wells Fargo Accused Of Manipulating Business Banking Data

It’s happened again.

Wells Fargo on Thursday (May 17) was facing accusations that its employees altered customer data, this time in a business banking unit, according to The Wall Street Journal. The paper, citing unnamed sources, reported that bank employees “improperly altered information on documents related to corporate customers.”

There is no evidence that any data involved creating fictitious accounts for retail consumers, as was the case in the scandal from about two years ago. Rather, employees in the bank’s wholesale unit reportedly added or altered, without customer knowledge, information that ranged from “social security numbers to addresses to dates of birth for people associated with business-banking clients,” the report said.

The behavior under investigation took place in 2017 and early 2018 “as Wells Fargo was trying to meet a deadline to comply with a regulatory consent order related to the bank’s anti-money-laundering controls,” The Wall Street Journal said. “The employees were also working to get documents in order prior to new requirements from another regulator for disclosures related to proof of beneficial ownership of businesses.”

The bank reportedly has told the federal Office of the Comptroller of the Currency about the problem in the wholesale unit. Wells Fargo’s business banking serves organizations with annual sales that range from $5 million to $20 million. The bank’s shares were down about 1.8 percent by late Thursday afternoon.

Wells Fargo offered no detailed comment about the matter. “This matter involves documents used for internal purposes,” the bank said in a statement. “No customers were negatively impacted, no data left the company, and no products or services were sold as a result.”

Wells Fargo is still dealing with the aftermath of its employees opening fake accounts for customers to meet aggressive sales targets. The bank has agreed to a $1 billion settlement with two of its regulators and has absorbed Federal Reserve sanctions. Trying to move past the controversy and brighten its image, the bank recently said income from deposit service charges would decline in 2018 — the result of what the financial institution called “customer-friendly” changes that will lead to less revenue from overdraft fees.

That’s on top of the 20 million texts and emails that Wells Fargo sends each month to customers to warn them about low account balances, and the recent TV ad campaign designed to ensure consumers that the bank has learned from its mistakes.

This new Wells Fargo controversy comes after the bank hired Amanda Norton, a former JPMorgan Chase executive, as its new chief risk officer, a job she reportedly starts this summer. As well, “Wells Fargo is rolling out a new risk-management framework designed by a consultant after regulators informally disapproved of previous plans,” the WSJ said.

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