Wells Fargo paid a record $185 million settlement in 2016 over unauthorized customer accounts.
The scandal involved employees opening deposit accounts and applying for credit cards without customers’ permission. Workers were pressured to meet aggressive sales targets, and some accounts generated fees or affected customers’ credit records. The bank’s “cross-selling” strategy encouraged staff to sell multiple products to each household.
In September 2016, the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the Los Angeles city attorney announced enforcement actions totaling $185 million. Wells Fargo later acknowledged that millions of accounts may have been unauthorized, although estimates changed as reviews continued. Chief executive John Stumpf resigned in October 2016. The scandal led to additional settlements, regulatory penalties, congressional scrutiny, and a Federal Reserve asset cap imposed in 2018. It is separate from the 2008 mortgage crisis, although both damaged the bank’s reputation.