Regulation

Wells CEO Says The Ethics Hotline Was Mostly Ethical

In a town hall meting last night, Wells Fargo’s new CEO Timothy Sloan admitted the bank had found “some instances” where reports by employees of bad behavior to its ethics line weren’t handled correctly. That explanation comes in response to accusations that Wells Fargo employees faced retaliation and firings for attempting to report illegal practices in bank locations. Those practices included signing consumers up for card and bank accounts they never agreed to.

Sloan went on to note, during the 2,000 employee meeting in Iowa, that the review of the ethics line has determined that a “majority” of cases were correctly handled — there were instances where inappropriate responses may have happened. Sloan further noted the bank would continue its investigation into those cases. The department of Labor is already involved in an investigation of retaliation claims at Wells.

“If we find complaints were mishandled, then we will take action to make it right,” Mr. Sloan said. He also noted that changes to the ethics-line process have been made in consultation with a third party that is being validated by internal audit at present.

“I want to be very clear in assuring you that you can have confidence in calling the ethics line, and your call will be handled appropriately,” Mr. Sloan said. “Retaliation is unacceptable. It’s against our policy…it will not be tolerated at Wells Fargo.”

Sloan also touted the launch of an ethics and integrity survey last month which identified over 7,000 “areas for improvement.” The bank will share highlights from the survey later in November, he said.

The firm has also launched a “Conversations” tour for its operating committee (the highest rank banking execs from across Wells Fargo) — Chief Financial Officer John Shrewsberry held one earlier this week in Phoenix (which is widely considered an epicenter for questionable practices), and Perry Pelos, who leads the bank’s wholesale unit, will hold one in Seattle.

As of yet, what Wells Fargo has not done is admitted or denied wrongdoing after paying a $185 million settlement related to its sales-practices issues. The bank is in the process of making sure that as many as 2.1 million customers affected see any fraudulently taken funds returned.

 

 

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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