In the wake of firing more than 5,300 employees and paying $185 million in fines to help settle an investigation into what some have called “sham bank accounts” created without express permission from clients, Wells Fargo has express regrets — but stopped short of agreeing (publicly) to misconduct.
As reported by The New York Times, the firm has taken out ads in newspapers, taking what it termed “full responsibility” for the creation of those accounts. But in addition to the aforementioned penalties, the financial giant did not officially admit to the misconduct. The upshot, as NYT said, is “classic Wall Street,” with fines in place and mandates to change the way business is done — but no tacit admission of wrongdoing.
The backlash on Capitol Hill has been swift. NYT quoted Sen. Jeff Merkley (D-OR), who serves on the chamber’s banking committee, as stating that he wants to hold hearings on the matter and to find out why the the punitive actions have been set in place without any official admission of wrongdoing. The bank, for its part, has said that it admits to the sham accounts but disputes banking regulators’ contention that Wells Fargo’s business model is to blame. There were as many as 1.5 million sham accounts set up, with an additional 565,000 credit card accounts created without the directive of Wells Fargo customers. The unauthorized accounts served as a way for Wells Fargo employees to get credit for new business. Key areas of activity centered around California, NYT reported. Of the $185 million agreed to as a refund, $100 million was paid out to the Consumer Financial Protection Bureau. The average refund to consumers amounted to roughly $25, said Wells.