Wells Fargo & Co. said it will eliminate all product sales goals in its retail banking operations in January as it works to rebuild trust after allegedly allowing its employees to open accounts without customers' knowledge to meet targets.
Continue Reading Below
Wells Fargo has faced a public and political storm after last week's agreement with regulators alleged practices that included employees creating as many as two million deposit and credit-card accounts without customers' knowledge. The bank, which paid a record-setting $185 million settlement, didn't admit or deny wrongdoing.
The Senate Banking Committee's Republican majority said late Monday that it plans to hold a hearing into the bank's sales pra ctices, where it intends to question Chief Executive John Stumpf.
The Wall Street Journal also reported on Monday that Wells Fargo has already told some employees to stop cross-selling products to customers.
The bank said the new prohibition on sales targets will help reassure customers that it has their best interests at heart. Still, the move could also make it harder for the company as a whole to reach financial growth targets that investors want.
"We are eliminating product sales goals because we want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers," Mr. Stumpf said. "We believe this decision is both good for our customers and good for our business. The key to our success is the lifelong relationships that result from providing each customer with great value."
At an investor conference Tuesday, Chief Financial Officer John Shrewsberry shed more light on the bank's work around monitoring its sales tactics. He said the bank is spending $50 million a year for "enhanced training, monitoring and controls." In particular, he referenced a mystery-shopping program where a third party would go to different bank branches to try to suss out bad behavior.
Mr. Shrewsberry added the bank hasn't reserved for additional settlements related to last week's settlement, essentially saying the bank doesn't expect more to come.
Write to Emily Glazer at email@example.com and Austen Hufford at firstname.lastname@example.org