Wells Fargo shows why America will never trust banks

Top executives ignored thousands committing illegal activity.

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Wells Fargo shows why America will never trust banks

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Lucas Weaver, Writer

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The great bank that once was Wells Fargo is currently in shambles with greedy executives and board members looking to escape punishment. The company was fined $185 million for creating 1.5 million bank accounts and 565,000 credit card accounts regulators say were sham accounts. It has fired 5,300 employees who all were involved in illegal activity. The bank that has existed since 1852 and serves one in three households in the United States pressured employees into creating these unnecessary accounts for their customers. The aggressive sales culture pushed employees to meet their sales quotas regardless of the means.

Least Trusted Corporations

Since the financial collapse in 2008, banks have been among the least trusted corporations in the country. It is easy for them to find loopholes in the system and exploit and ruin everyday people. Yet, the head executives and board members seem to always walk away clear and free. The Wells Fargo fiasco is the chance to show corporate leaders they can not behave in such a distrustful manner. Wells Fargo chairman and chief executive John Stumpf is one of several to blame for these disgraceful practices. In a testimony to the U.S. Senate, Mr. Stumpf had this to say: “I accept full responsibility for all unethical sales practices in our retail banking business, and I am fully committed to fixing this issue, strengthening our culture and taking the necessary actions to restore our customers’ trust.”

There must be accountability held for all the members of the board and all upper management. In an interview with the New York Times, former banker Khalid Taha had this to say. “They warned us about this type of behavior and said, ‘You must report it,’ but the reality was that people had to meet their goals. They needed a paycheck.” Employees were put under continuous pressure to increase their sales or risk termination. This practice continued over decades and, furthermore, accepted and nurtured. Those who did as instructed were rewarded with promotions and bonuses. Some went even as far as to forge their customers signatures. Wells Fargo has turned itself into a company that knows no limits, but will do whatever necessary to advance itself. This ideal starts with the leaders of the company and the message they send to its thousands of employees.

A Great Ignorance

The board of a bank has three essential jobs it must perform. First, it must evaluate the risks that come with the company and handle them before they develop into a crisis. Second is to properly compensate its employees so they are not pushed to improper and illegal actions. Thirdly, and most importantly, a board must constantly be monitoring the culture of the company and striving to improve it. The Wells Fargo board failed all three of these jobs. The fact that over 5,000 employees were involved in illegal activity shows a great ignorance by the company’s leaders. The culture changed into one that allowed a single attitude: make money no matter what.

There is no excuse for Stumpf and his board. There must be some sort of punishment for them as well. They can not be allowed to fire thousands of employees and say the problem is fixed. I believe the justice system will set out to make an example of them for other top banking executives. There is no escaping the misleading of customers and the mistreatment of employees. Wells Fargo has long been considered one of the most trustworthy and honest banks on Wall Street. This scandal begs the question, if a bank so trusted can do this what are the others doing? Banks must work hard to monitor their employees closely. The top executives must begin to care about all of their employees and the way they are portraying the company.