The history of the Company
Wells Fargo & Company is an American multinational financial services company headquartered in San Francisco, California, with central offices throughout the country. It is the world's second largest bank by market capitalization and the third largest bank in the U.S. by total assets. In July 2015, Wells Fargo turn out to be the world's largest bank by market capitalization, edging past ICBC, before slipping behind Chase in September 2016. Wells Fargo beat Citigroup Inc. and become the third-largest U.S. bank by assets at the end of 2015. Wells Fargo is the second-largest bank in deposits, home mortgage servicing, and debit cards.
In February 2014, Wells Fargo was named the world's most valuable bank brand for …show more content…
Wells Fargo workers had opened 3.5 million deposit and credit card accounts without customers' authorization.
Since then, more has come to light. The bank charged for insurance for auto loan customers without them knowing it, and extra fees on some mortgages. Most recently its wealth management division has come under scrutiny for sales practices.
The disclosure ignited a scandal that led in a matter of weeks to the ouster of its chairman and chief executive, John Stumpf, and to a host of promised reforms, including the removal of difficult sales goals that were widely acknowledged to be the source of the problem.
The report, produced for a risk management committee that monitors Wells Fargo's community bank the business unit identifies several undisclosed issues, all classified as "high risk." They include improper fees charged on some accounts that were closed when the holders either died or were declared legally incompetent, a practice that dates to at least early last year.
Adverse problem Wells Fargo is …show more content…
Examples of this are:
1. opening any account without the consumer’s consent;
2. transferring funds between a consumer’s accounts without the consumer’s consent;
3. applying for any credit card without the consumer’s consent.
4. issuing any debit card without the consumer’s consent; and
5. enrolling any consumer in online-banking services without the consumer’s consent.
Wells Fargo principal-agent problem
Every tale of corporate scandal begins with culture Wells Fargo’s culture, made it the kind of place where frontline employees could feel ungoverned and libertine enough to fabricate millions of customer accounts. It also created an environment where such behavior could be concealed, minimized, and ignored by leadership.
This issue opens a new investigation, that prompted Wells Fargo's to eliminate product sales goals and set in motion work on the new compensation system. Formally announced on January the 1, 2017 an estimated 70,000 bank workers, features:
• No product sales goals.
• Performance evaluation based on customer service, usage and growth, not simply on new accounts