Wells Fargo Loses Contract With City Of Philadelphia

Wells Fargo is trying to move beyond its fake account scandal, but that’s not happening at least in the city of Philadelphia, where the embattled bank lost a big government contract.

According to a report in CNBC, the Philadelphia City Council voted Monday (May 1) to switch the company that handles its $2 billion payroll account from Wells Fargo to Citizens Bank for its next fiscal year, which begins in July. Officials in the city of Philadelphia said the move to switch payroll providers wasn’t due directly to the scandal, although it did play some role.

“Time and time again their actions have revealed them to be the antithesis of corporate social responsibility,” Councilwoman Cindy Bass said in a statement to CNBC. “I want to thank my colleagues on the committee for doing the right thing and sending a message that we will not do business with companies that engage in unethical business practices.”

Wells Fargo said it accepted the decision and will help Citizens with the transition, reported CNBC. “We are proud of the support that we have diligently and professionally provided to the city in a number of capacities as its operating bank for the past several years, and our highly experienced and proven government banking, securities and treasury management teams stand ready to continue delivering outstanding service to the City of Philadelphia,” the bank said.

Wells Fargo will maintain its role as a depository bank for the city of Philadelphia, noted the report.

For months now, Wells Fargo has been trying to move beyond its fake account scandal that has tarnished its reputation, resulted in the firing of key executives and hurt its business with consumers, cities and businesses.

In April, The Wall Street Journal reported Wells Fargo was forced to overhaul the credit card processing business due to an internal inquiry that found some of its employees were falsely reporting customers’ sales and steered small businesses into contracts that were expensive and confusing. According to a report in the Wall Street Journal, citing unnamed current managers, Wells Fargo has fired two dozen or more employees of Wells Fargo Merchant Services during the course of the past two years because of those practices and other violations of the bank’s policies.