Wells Fargo Faces ‘Top-to-Bottom’ Review, Labor Department Saysby
Senators questioned whether workers were denied overtime pay
Labor Secretary Perez says in letter he ordered investigation
The U.S. Department of Labor agreed to conduct a review of Wells Fargo & Co. requested by lawmakers including Elizabeth Warren, who said the bank may have put undue pressure on employees to meet sales quotas.
Lawmakers had asked the agency in a letter last week to investigate after the San Francisco-based lender was caught creating legions of sham accounts for customers over half a decade. They said they want to know whether the company violated wage and overtime rules while pushing branch workers to meet aggressive targets.
“Given the serious nature of the allegations, the recent actions of our federal partners, and recent media reports, I have directed enforcement agencies within the department to conduct a top-to-bottom review,” Labor Secretary Thomas Perez responded Monday in a letter obtained by Bloomberg. The agency established a working group to carry it out, he said.
The inquiry adds to scrutiny of Wells Fargo from federal agencies and Congress after the bank agreed to pay $185 million in fines to authorities including the Consumer Financial Protection Bureau for potentially opening more than two million bogus accounts. Chairman and Chief Executive Officer John Stumpf faced a Senate panel last week where Democrats and Republicans grilled him over the bank’s actions. The House Financial Services Committee has scheduled another round of testimony for Thursday.
In last week’s letter, lawmakers said Wells Fargo employees described being chastised and forced to work extra hours to meet quotas. Wells Fargo said at the time that it prides itself “on creating a positive environment for our team members, including market-competitive compensation, career-development opportunities, a broad array of benefits and a strong offering of work-life programs.”
A bank spokeswoman declined to comment on Perez’s response, which was reported earlier by Reuters. Warren praised it.
“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,” the Massachusetts Democrat said in a statement.