Feds prob­ing pos­si­ble worker abuse by Wells Fargo

Daily Local News (West Chester, PA) - - BUSINESS - By Marcy Gor­don AP Busi­ness Writer

WASH­ING­TON >> The U.S. La­bor Depart­ment is in­ves­ti­gat­ing pos­si­ble abuses of em­ploy­ees by Wells Fargo in con­nec­tion with the bank’s al­leged ef­forts to open mil­lions of unau­tho­rized ac­counts to meet sales goals.

A group of Demo­cratic se­na­tors last week asked the depart­ment to in­ves­ti­gate whether Wells Fargo tell­ers, branch man­agers and cus­tomer ser­vice reps were ha­rassed and threat­ened with ter­mi­na­tion in the ag­gres­sive sales push. A com­plete re­view of cases and com­plaints is needed to de­ter­mine if the sec­ond-largest U.S. bank vi­o­lated the Fair La­bor Stan­dards Act, the se­na­tors said. About 5,300 em­ploy­ees have been fired since 2011.

In a let­ter Mon­day, La­bor Sec­re­tary Tom Perez said the depart­ment takes the se­na­tors’ con­cerns se­ri­ously and has started a “top-to-bot­tom” re­view of la­bor prac­tices at San Fran­cisco-based Wells Fargo.

“We take the con­cerns raised in your let­ter very se­ri­ously,” Perez told the se­na­tors, led by El­iz­a­beth War­ren of Mas­sachusetts. “Given the se­ri­ous na­ture of the al­le­ga­tions ... and re­cent me­dia re­ports, I have di­rected en­force­ment agen­cies within the depart­ment to con­duct a top-to-bot­tom re­view of cases, com­plaints or vi­o­la­tions con­cern­ing Wells Fargo over the last sev­eral years.”

Bank spokes­woman Jen­nifer Dunn de­clined to com­ment on the La­bor Depart­ment ac­tion.

The scandal over mil­lions of de­posit and credit card ac­counts al­legedly opened with­out cus­tomers’ per­mis­sion has widened. The La­bor Depart­ment re­view comes atop in­ves­ti­ga­tions by con­gres­sional com­mit­tees and fed­eral pros­e­cu­tors.

U.S. and Cal­i­for­nia reg­u­la­tors fined Wells Fargo $185 mil­lion ear­lier this month. In a fever­ish drive to meet sales tar­gets, bank em­ploy­ees opened the unau­tho­rized ac­counts, trans­ferred cus­tomers’ money into them and signed peo­ple up for on­line bank­ing, ac­cord­ing to the reg­u­la­tors. Debit cards were is­sued and ac­ti­vated, as well as PINs cre­ated, with­out cus­tomers’ knowl­edge.

Se­na­tors of both par­ties heaped crit­i­cism on Wells Fargo CEO John Stumpf last week as he tes­ti­fied at a hear­ing by the Sen­ate Bank­ing Com­mit­tee, ac­cus­ing the bank of fraud. He apol­o­gized for the mis­con­duct and promised to as­sist af­fected cus­tomers. Se­na­tors told Stumpf he was scape­goat­ing le­gions of lower-level em­ploy­ees while se­nior ex­ec­u­tives kept their jobs and re­ceived hefty pay pack­ages.

In their re­quest to the La­bor Depart­ment, the Demo­cratic se­na­tors noted the U.S. Con­sumer Fi­nan­cial Pro­tec­tion Bu­reau had found at Wells Fargo “a work­place char­ac­ter­ized by strin­gent sales quo­tas and ag­gres­sive in­cen­tives im­posed on its em­ploy­ees.” In the drive to meet sales quo­tas, em­ploy­ees were faced with “threats of ter­mi­na­tion, man­dated hours of un­paid over­time, ha­rass­ment and other forms of re­tal­i­a­tion,” the se­na­tors wrote.

On Fri­day, the Fed­eral Re­serve Bank of San Fran­cisco said Stumpf was re­sign­ing his po­si­tion on the ad­vi­sory coun­cil to the Fed board in Wash­ing­ton. Stumpf made a “per­sonal de­ci­sion” to give up his po­si­tion as rep­re­sen­ta­tive from the Fed’s San Fran­cisco re­gion to fo­cus on his top pri­or­ity of lead­ing Wells Fargo, the com­pany said.

Stumpf is re­turn­ing to Congress to tes­tify Thurs­day be­fore the House Fi­nan­cial Ser­vices Com­mit­tee.

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