Bank to be sanctioned by currency comptroller, consumer watchdog, L.A. city attorney
Pedestrians pass a Wells Fargo & Co. bank branch in New York. Photo: Eric Thayer/Bloomberg News
Updated Sept. 7, 2016 10:22 p.m. ET
Wells Fargo & Co., the biggest U.S. bank by market value, is to be the subject of a regulatory enforcement action related to its cross-selling of products and sales tactics, according to people familiar with the matter.
The Office of the Comptroller of the Currency, Consumer Financial Protection Bureau and Los Angeles City Attorney plan to announce the civil action and a related settlement Thursday, the people said. The amount of a fine or remedial actions that may result weren’t immediately clear.
Wells Fargo declined to comment on any discussions with regulators.
Regulators and prosecutors have been investigating whether Wells Fargo pushed employees too hard to meet sales goals while failing to do enough to prevent questionable behavior, The Wall Street Journal has previously reported. In May 2015, the Los Angeles City Attorney filed suit, alleging the bank pressured its employees to commit fraudulent acts, including opening accounts for people that don’t exist.
Bank spokeswoman Mary Eshet previously had said that Wells Fargo disagreed with the allegations in the lawsuit including that it used sales tactics that are too aggressive for its customers.
Wells Fargo, like other banks, has pushed cross-selling of multiple products to its customers to bolster sales and profitability at a time when both have been under pressure from a sluggish economy and superlow interest rates.
Many banks encourage their customers to buy more than one financial product—cross selling—but Wells Fargo has been more upfront about how much it does. Wells Fargo publishes in quarterly reports by division how many products it sells to its customers, on average. Some current and former employees say they have met several times a day with colleagues to discuss sales goals, and many branch employees receive bonuses related to meeting or exceeding goals.