FILE - In this Jan. 18, 2011 file photo, a pedestrian walks by a Wells Fargo bank branch in Los Angeles. (AP)

Wells Fargo fined $100 million by Consumer Financial Protection Bureau for illegally opening unauthorized accounts

Over 5,300 employees used the fake accounts to meet sales targets and reach compensation incentives


Scott Eric Kaufman
September 9, 2016 5:42PM (UTC)

On Thursday, the Consumer Financial Protection Bureau (CFPB) fined banking titan Wells Fargo $100 million for the behavior of some 5,300 of its employees since 2011 — behavior that included opening up fake banking and credit card accounts and creating ersatz online banking profiles in order to meet their employer's unreasonable quotas.

The bank had imposed a strict and unattainable "solutions" quota on its employees — a "solution," in this case, being the opening of a banking, credit card, or online banking account — leading managers, according to the complaint filed in 2015, to "constantly hound, berate, demean and threaten employees to meet these unreachable quotas."

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"Managers," the complaint continued, "often tell employees to do whatever it takes to reach their quotas. 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." In short, the CFPB fined Wells Fargo for creating an incentivized culture that not only permitted such abuses to occur, but tacitly encouraged it.

Which is not, as Bloomberg's Matt Levine argued, to say that anyone "in senior management wanted this .... They wanted employees to open lots of real accounts, and designed a system that they hoped would encourage that. But they designed it badly, and ended up instead encouraging employees to open a lot of fake accounts."

But CFPB Director Richard Cordray deemed the company's intention irrelevant, saying that "[t]oday’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences."


Scott Eric Kaufman

Scott Eric Kaufman is an assistant editor at Salon. He taught at a university, but then thought better of it. Follow him at @scottekaufman or email him at skaufman@salon.com.

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Banking Business Fraud Wells Fargo

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