Cummings demands more details on Wells Fargo fraud scheme

A top House Democrat is calling on Wells Fargo & Co. to produce documents that would help determine whether the bank’s managers spurred employees to create fake accounts by using incentives and threats to meet sales goals.

Maryland Rep. Elijah Cummings, ranking member of the House Oversight and Government Reform Committee, sent a letter on Tuesday to Wells CEO John Stumpf requesting information on how the company is holding employees and executives accountable for allegedly opening more than 2 million bank and credit card accounts without customers’ knowledge.

{mosads}“Wells Fargo apparently just fired more than 5,000 employees, but it is unclear whether the executives who orchestrated this scheme will be held accountable,” Cummings said after meeting with Tim Sloan, Wells Fargo’s president and chief operating officer, in Washington.

Cummings gave Sloan the letter for Stumpf requesting documents about how its “managers used quotas, bonuses, threats and other punitive measures to perpetrate these abuses.”  

Any managers who directed the abuses or enforced the quotas should be investigated and prosecuted, he said. 

A lawsuit filed in California by a former Wells employee described how workers were harassed and punished for not meeting sales goals, Cummings said.

“Managers constantly hound, berate, demean and threaten employees to meet these unreachable quotas. Managers often tell employees to do whatever it takes to reach their quotas,” according to the lawsuit. 

“Employees who do not reach their quotas are often required to work hours beyond their typical work schedule without being compensated for that extra work time, and/or are threatened with termination,” the lawsuit said. 

Cummings also called on the bank to justify the compensation package for Carrie Tolstedt, the head of the department that opened the unauthorized accounts, who is set to receive an $125 million pay out when she retires at the end of the year.

Additionally, the letters asks for details on how many consumers were affected and how many were referred to collections agencies or had their credit scores lowered. 

Last week, the Consumer Financial Protection Bureau fined the bank $185 million for alleged illegal sales practices. 

On Tuesday, the bank said it was ending all product goals for retail bankers starting in January in the wake of the scheme.

Wells said it has paid $2.6 million in restitution to customers so far and has set aside a total $5 million to cover those costs.

The scandal has caused upset on Capitol Hill with lawmakers in both chambers calling for further probes into the behavior at the bank. 

Stumpf is set testify next week before the Senate Banking Committee along with Comptroller of the Currency Tom Curry and Richard Cordray, director of the CFPB.