Wells Fargo to alter branch-review policy that may have contributed to scandal
Embattled bank Wells Fargo & Co. says it will eliminate a policy that allowed branches to get 24 hours’ notice before annual visits by internal reviewers — a practice that may have contributed to the bank’s unauthorized accounts scandal.
The so-called branch-control review process occurs at every bank location across the country and includes reviews of documents, interviews with employees and observations of practices, according to Wells Fargo.
The San Francisco company said a 24-hour heads-up was given to branch locations before the review so each bank could “ensure it is staffed to assist with the review and maintain customer experience.”
However, a Wall Street Journal article on Tuesday said the notice gave employees time to hide improper practices by shredding papers or forging signatures that could have shown that accounts were opened without customers’ authorization. The Journal cited more than a dozen unnamed current and former employees.
Wells Fargo said in a statement that “the behavior described has always been against our policies,” and that “in order to remove any possibility of an issue, we plan to eliminate the 24 hour notice.”
The bank noted that the branch-control review process has evolved to include review of electronic documents and electronically captured signatures that are examined ahead of branch visits.
The bank also said its separate internal audit team has been independently reviewing the branch-control review process, and will increase its coverage and visits this year.
Wells Fargo’s corporate risk department will separately conduct reviews of about 600 bank locations this year with no advance notice.
“We continue to make improvements and take a hard look at all our processes,” the bank said.
In September, Wells Fargo agreed to a $185-million settlement with regulators, including the Consumer Financial Protection Bureau and the Los Angeles City Attorney’s Office, who said the bank’s aggressive sales culture pushed thousands of employees to open as many as 2 million accounts without customer authorization.
The bank did not admit wrongdoing as part of the settlements, but said it would change its sales practices and apologized to customers.
The wrongdoing, which led to the resignation of Chief Executive John Stumpf in October, was first reported in a 2013 Los Angeles Times story.
Twitter: @smasunaga
