Labor Department Starts Review of Wells Fargo Labor Practices
September 26 2016 - 8:12PM
Dow Jones News
By Yuka Hayashi
WASHINGTON -- The Department of Labor said it has begun
reviewing labor practices at Wells Fargo & Co., stepping up
regulatory scrutiny of the bank in the wake of a scandal involving
unauthorized customer accounts.
Labor Secretary Thomas Perez said in a letter Monday that his
department will conduct a "top-to-bottom review" of cases,
complaints or violations concerning Wells Fargo over the last
several years. The move comes in response to a request from several
Democratic senators, including Sen. Elizabeth Warren (D., Mass),
that the department open an investigation into whether the bank
improperly compensated account executives, bank tellers, branch
managers and customer service representatives.
The Labor Department's Wage and Hour Division is "currently
carefully reviewing the issues raised in your letter...to determine
the best course of action in this matter," Mr. Perez said in a
letter addressed to Ms. Warren. "We take the concerns raised in
your letter very seriously."
The department's action follows a Senate committee hearing last
week Ms. Warren sharply attacked Wells Fargo Chief Executive John
Stumpf, saying the bank's aggressive sales goals drove lower-level
employees to open accounts without customer consent. Wells Fargo
was fined $185 million by regulators for the alleged misconduct. At
the hearing, Mr. Stumpf repeatedly apologized for the behavior that
led to employees creating as many as two million unwanted or
fictitious customer accounts in an effort to meet sales goals. The
bank has fired some 5,300 largely lower-level workers in
response.
Sen. Warren welcomed the Labor Department's move. "Every other
federal agency with jurisdiction in this matter should follow DOL's
lead and promptly determine whether Wells Fargo and its senior
executives should be prosecuted or otherwise sanctioned," she said
in a statement. At last week's hearing, Ms. Warren called on Mr.
Stumpf to resign, return money he earned during the sales scandal
and be criminally investigated.
The Labor Department has established a working group to conduct
the review. It has also taken other steps to ensure that current
and former Wells Fargo employees are aware of worker protection
laws, including the creation of a dedicated webpage and specific
monitoring of its hotline.
Write to Yuka Hayashi at yuka.hayashi@wsj.com
(END) Dow Jones Newswires
September 26, 2016 19:57 ET (23:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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