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The Wells Fargo Scandal: Is the Profit Model to Blame?
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The Wells Fargo Scandal: Is the Profit Model to Blame?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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San Francisco-based Wells Fargo, one of the largest providers of financial services in the U.S., shook the trust of its customers last September 8 with revelations that could impact institutions across the industry. The company said that its subsidiary Wells Fargo Bank had agreed to 5 million in settlements with regulators over admissions that since 2011, employees of the bank had created and operated fictitious customer accounts without the parent firm’s knowledge. That practice allowed employees to meet sales targets and earn bonuses. The New York Times said regulators estimate about two million such accounts — 1.5 million bank accounts and 565,000 credit-card applications. The industry watchdog, the Consumer Finance Protection Bureau (CFPB), said in a blog post that it will collect $100 million from Wells Fargo as a settlement, while another $85 million will go to the Comptroller of the Currency and the Los Angeles City Attorney.…

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