Wells Fargo’s progress on making things right and rebuilding trust
In recent months, Wells Fargo has taken a series of steps to address improper sales practices — making critical changes to rebuild the trust of customers, team members, community partners, and shareholders.
Since regulatory and legal settlements related to sales practices in the retail bank were announced Sept. 8, 2016, Wells Fargo’s board of directors, senior leaders, and team members have worked diligently to make things right for customers, fix the problems, and build a better bank.
Listed below are actions completed to date, including changes in corporate leadership, customer refunds and communications, elimination of product sales goals for retail bankers, a renewed focus on culture, and improvements in risk management.
“This progress report (PDF) reflects our commitment to transparency as we continue to put our full effort behind our goal to rebuild trust in Wells Fargo for all of our stakeholders,” said CEO Tim Sloan. “We know we have more work to do, but we believe these actions are the foundation on which we are building a better Wells Fargo.”
- Elected Tim Sloan chief executive officer.
- Elected an independent chairman to lead the board of directors, and implemented a new requirement that this role and the role of CEO be held by separate people.
- Added two new, highly qualified, independent directors to the Wells Fargo board.
- Appointed a new executive — Mary Mack — to lead the Community Bank.
- Created a new Change Leader position in the Community Bank to lead the Change Initiative, redefining the business model in branches and call centers to focus on the customer experience.
- Established a dedicated office to oversee a companywide Rebuilding Trust Program.
- Terminated four current and former managers in the Community Bank for cause due to sales practices; none received a 2016 bonus and each forfeited all outstanding equity awards and stock options.
- Eliminated 2016 bonuses and reduced 2014 performance shares by up to 50 percent for eight Operating Committee members.
- Refunded $3.26 million to customers for fees incurred by potentially unauthorized deposit, credit card, and line of credit accounts.
- Reached out to 40 million retail and 3 million small business customers through statement messaging, other mailings, and online communications, asking them to contact us with any concerns about their accounts.
- Expanded the company’s customer complaint servicing and resolution process.
- Began sending automatic notifications to customers after a personal or small business checking account, savings account, or credit card has been opened.
- Established a dedicated hotline for customers with concerns about their accounts, or any aspect of their relationship with Wells Fargo. Customer service representatives are available 24/7 at (877)924-8697.
- Offering multiple ways for potentially impacted customers to work with us, including engaging with Wells Fargo through our complaints program, free mediation, or participating in a class-action settlement.
- Eliminated product sales goals for retail bankers.
- Created a new compensation plan for retail bankers focused on customer experience, stronger oversight and controls, and team versus individual incentives.
- Discontinued reporting the cross-sell metric as a measure of success for our retail bank.
Risk management and integrity
- Launched the Office of Ethics, Oversight and Integrity to centralize the handling of internal investigations, complaints oversight, and sales practices oversight. The new team will work to ensure that we are doing business in a way that is consistent with our Vision & Values.
- Strengthened our risk framework by centralizing core functions like human resources and risk.
- Raised the minimum wage base range for entry-level team members to $13.50 – $17.00 per hour.
- Made enhancements to the EthicsLine intake process and hired an outside expert to help identify possibilities for additional improvements.
- Expanded the “Raise Your Hand” initiative, encouraging team members to speak up when they see something unethical or if they have an idea to help reduce risk.
- Established a process — in addition to the existing termination appeal review — enabling former team members to request a review of their termination decision.
- Established a special recruiting team to assist former team members who remain eligible for rehire, and to identify opportunities for reemployment with Wells Fargo.
As the company looks toward the rest of 2017, several other action items are in progress as they relate to the goal of rebuilding trust with stakeholders.
- Developing a process to identify customers whose credit might have been affected by unauthorized account openings, and determining ways to make things right.
- Voluntarily expanding review and remediation of customer accounts to include the years 2009 and 2010.
- Increasing oversight of our retail bank monitoring activities — a $50 million annual investment — including a mystery shopper program involving 15,000-20,000 visits a year and an additional 600 conduct risk reviews each year in branches across the U.S.
- A review of our sales practices across Wells Fargo by a third-party consultant.
- Hiring additional risk professionals and providing greater oversight in the retail bank.
- Conducting a Conversations Tour for Wells Fargo leaders to address concerns of team members in communities across the U.S. and to collect their thoughts on how to build a better Wells Fargo for the future.
- Launching a holistic approach to hiring and recruiting to better ensure Wells Fargo has the highest quality team members to meet the needs of our customers and help rebuild trust.
- Conducting a culture survey in May 2017 with all team members and using the results to develop a clear set of actions that will help Wells Fargo foster an ethical, inclusive, and customer-focused culture.
In addition, the board of directors is expected to complete its independent investigation of the company’s retail banking sales practices and related matters, and make public its findings, ahead of the company’s annual meeting of stockholders on April 25.
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