The Consumer Finance Protection Board (CFPB) fine agreed to by Wells Fargo of $100 million is the largest in the agency’s short history. (Another $85 million was tacked on by paying $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles.) The total fine of $185 million were assessed based upon the bank’s conduct of opening over 2 million phantom bank and credit card accounts, usually without customers’ knowledge.
The stunningly newsworthy item was the incentives put in place by the bank’s management to open these accounts, with no controls in place to ascertain their validity. It was almost as if management was telling its employees to go ahead and break the law, as long as we make money, you will not receive any employment discipline, such as termination. However, the bank was caught and fired the allegedly 5000 culpable employees.
