Wells Fargo (WFC  ) seems to be cleaning up its act after the announcement of fake bank accounts made.

On Tuesday, March 7th, Wells Fargo, an American bank headquartered in California, released that they are firing executive managers across regional branches. This comes in light of the news scandal. Back in September 2016, Wells Fargo had announced that about 2 million fake accounts were made by Wells Fargo employees. This caused a rift in the consumer relationship of Wells Fargo customers. Unknowingly strapped to a fake account, customers would be charged with overdraft fees for their original accounts because of the money stolen from it. Wells Fargo employees transferred funds from existing accounts into these new ones, costing customers hundreds of thousands dollars while making Wells Fargo reach its annual sale targets. Interestingly, the suspicious practice has been occurring since 2011. The severity of the practice is troubling as much enthralling. But what is the true source of the desire for sales bonuses?

The answer is not surprising at all. The desire to meet sales quotas comes from the excruciating pressure placed upon Wells Fargo employees. Due to the quotas set on individual employees, the same employees would attempt to create more accounts to indicate the increase in sales. These fake accounts led to a trail of suspicious hints, such as fake PIN password numbers and fabricated email addresses. U.S Senator Elizabeth Warren commented on the terrible business practices under the former Wells Fargo CEO John Stumpf, stating that he "squeezed [his] employees to the breaking point so they would cheat customers and [he] could drive up the value of...stock and put hundreds of millions of dollars in [his] own pocket." She continued to expose the injustice of the practice in a direct statement to John Stumpf, with the scathing words, "And when it all blew up, you kept your job, you kept your multi-multi-million-dollar bonuses, and you went on television to blame thousands of $12-an-hour employees who were just trying to meet a cross-sell quota that made you rich."

 

John Stumpf, the Wells Fargo CEO of 34 years, retired swiftly in October 2016 after being questioned about the counterfeit accounts. 

It now makes sense for Wells Fargo to let go of executive managers due to the public disapproval of the dishonorable sales practices. Prior to the firing of the senior members of the bank, Wells Fargo had let go of about 5,300 employees over a five year period. Now, the new Wells Fargo senior executive Vice President Mary Mack is committed to rebuilding Wells Fargo from the bottom up, with a goal of fostering both the internal employee and external customer relationships. Mack confidently stated that they "have many steps to rebuild trust with customers and team members, but we have more work to do in our journey." Mack has delivered on her promise indeed, by restructuring the management core of Wells Fargo retail banks across the country. Recently, she's divided the Wells Fargo bank operative into two divisions under Lisa Stevens and Michelle Lee. 

But what does the future hold for the 164-year old bank? Following the scandal, Wells Fargo stock decreased dramatically. For now, it seems that Wells Fargo is making a slow stock increase along with the removal of crucial employees and the reassignment of the new Wells Fargo CEO, Timothy Sloan. But with the Mack's division of the retail bank operative, the return of Wells Fargo as a strong bank is a questionable future that only time will resolve. 

Sources