Wells Fargo & Co. eliminated product sales goals for its consumer bankers as the company seeks to reassure regulators, lawmakers and customers after employees opened accounts without clients’ approval.
“We want to make certain our customers have full confidence that our retail bankers are always focused on the best interests of customers,” Chief Executive Officer John Stumpf said Tuesday in a statement.
Stumpf, 62, was asked to testify in Washington on the bank’s alleged misconduct after it agreed to pay $185 million in fines over claims that it opened more than 2 million unauthorized accounts. The elimination of the sales goals, effective Jan. 1, follows instructions from the lender to U.S. call center workers to temporarily halt cross-selling of financial products.
The Senate Banking Committee plans to hold a hearing Sept. 20 on San Francisco-based Wells Fargo, following last week’s enforcement case in which regulators accused bank employees of opening deposit and credit-card accounts without approval to meet sales goals. Stumpf is among executives who’ve been asked to appear, a spokeswoman for the committee said Monday.
The allegations have been a black eye for San Francisco-based Wells Fargo, the biggest U.S. home lender and a marquee investment for billionaire Warren Buffett, whose Berkshire Hathaway Inc. is the bank’s largest shareholder.
Taking a Pause
“We asked the team to pause on the sales part of our calls,” Mary Eshet, a spokeswoman for the lender, said Monday.
Wells Fargo declined 0.4 percent to $48.54 Monday in New York, the worst performance in the 24-company KBW Bank Index. The lender’s stock has lost 11 percent this year, while the S&P 500 Financials Index gained 1.6 percent.
The lender expected higher call volumes from customers in response to news of the $185 million settlement, and from the busy post-Labor Day period, the company said. Performance and incentive adjustments will made by the end of the month.
Revelations that bank employees had opened the accounts are “highly disturbing” and could hurt holders of the bank’s debt, Moody’s Investors Service said Monday.