NEW YORK—Wells Fargo announced plans Tuesday to cut its aggressive product sales goals for retail bankers, nearly a week after state and federal regulators fined the bank $185 million for allegedly opening millions of unauthorized accounts for its customers to meet those targets.
The product sales goals will be eliminated by Jan. 1, the San Francisco-based bank said in a brief statement.
Regulators said in announcing the fine that Wells Fargo sales staff opened more than 2 million bank and credit card accounts that customers may not have authorized, and money in their accounts was transferred to the new accounts without authorization. Debit cards were issued and activated, as well as PINs created, without telling customers.
In some cases, Wells Fargo employees even created fake email addresses to sign up customers for online banking services, regulators said.
Wells Fargo has been known for its aggressive sales goals for its employees. Bank executives highlight every quarter the so-called “cross sale ratio,” which is the number of products the bank sells to each of their individual customers. The ratio hovers around six, which means every customer of Wells Fargo has on average six different types of products with the bank.
The Consumer Financial Protection Bureau fined the bank $100 million, the largest fine the agency has levied against a financial institution since it was created five years ago. The bank will also pay $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles. It will also pay restitution to affected customers.
Roughly 5,300 employees at Wells Fargo were fired in connection with this behavior, according to the city attorney’s office.
Wells Fargo has said it regrets “any instances where customers may have received a product that they did not request” and that it’s refunded $2.6 million in fees associated with products that were opened without authorization.
The bank’s shares dropped more than 2 percent to $47.12 in morning trading Tuesday.
