Wells Fargo Crackdown Spurred by Employees, Union

By Rhonda Smith

Oct. 19 — The recent crackdown on Wells Fargo sales-goal practices resulted in large part from a three-year push for change by front-line bank employees, assisted by the Communications Workers of America, the campaign’s leaders said.

“I don’t think we would have seen Wells Fargo come to this point had bank workers not gotten involved,” Erin Mahoney, the union’s New York City-based organizing coordinator for the campaign, told Bloomberg BNA Oct. 17.

“Folks have been bringing up the fraud and extreme sales goals” at Wells Fargo for several years, she said. “But when bank workers came together as an organization in a collective way, they had more power.”

Wells Fargo recently agreed to pay $185 million to the Consumer Financial Protection Bureau and other authorities after a review found employees opened accounts and credit cards without customers’ permission. The CFPB said thousands of bank workers opened the accounts to meet aggressive sales goals, which left some customers with overdraft and late fees.

As a result, John Stumpf stepped down as Wells Fargo’s chief executive officer.

Wells Fargo Touts ‘Open Door' Policy

The San Francisco-based company, which employs about 100,000 workers nationwide in its community bank division, opposes union representation.

“Wells Fargo does not believe our team members need a third party to represent them in matters involving terms and conditions of employment,” company spokeswoman Richele J. Messick told Bloomberg BNA in an e-mail Oct. 18.

“We offer competitive pay, benefits, career and development opportunities,” she said. “Our open door policy provides our team members with the ability to communicate and problem solve directly with either their managers or any other Wells Fargo team member.”

Committee for Better Banks

The CWA’s union-organizing campaign is affiliated with the Committee for Better Banks, a nonunion coalition of bank workers, consumers and advocates, who began speaking out against practices in the banking industry three years ago. The CWA provides financial and other support for the CBB, Maria Loya, the policy director for the Los Angeles Committee for Better Banks, told Bloomberg BNA Oct. 14.

Earlier in 2016, members of the two groups shared their concerns about Wells Fargo’s sales-goal practices with members of Congress and representatives of government agencies. In the past three years, group members also have held protests and presented petitions at various banks nationwide, urging them to revise various practices, including sales-goal policies.

The affected employees in the industry primarily work as bank tellers, call center employees and other representatives who assist customers with their personal or business banking needs.

They have three key demands, Mahoney said. They want to end sales goals in the banking industry, improve pay by raising hourly wages for front-line workers and sharing more in company profits, and have stable, secure jobs.

Many front-line banking employees in Los Angeles have hourly wages that range from $10 to $12, Loya said.

In Minnesota, the same workers’ hourly wages hover around $11 to $14, Jeff Lacher, CWA’s organizing coordinator there, told Bloomberg BNA Oct. 17.

Bank employees from across the U.S. spelled out their concerns about Wells Fargo and other companies operating in that industry in a report the National Employment Law Project released in June.

About 1.7 million people work in retail banking, the report said, and almost half are either bank tellers or customer service workers. “Bank tellers, the single largest occupation within this category, have a median hourly wage of $12.44,” it said.

Los Angeles City Council Takes Action

In California, Loya said, “for the first time we’re getting bank workers reaching out to us and wanting to get more information about our organization.”

Los Angeles City Council members Paul Koretz (D) and Paul Krekorian (D) recently proposed amending a city ordinance “to ensure that companies that wish to do business with the City of Los Angeles adhere to responsible banking practices,” including not engaging in actions involving predatory sales goals.

The proposal calls for revising the city’s Responsible Banking Investment Monitoring Ordinance ( No. 182138). The goal is to promote “responsible consumer banking by any company doing business with the City of Los Angeles,” the motion states.

Koretz and Krekorian also want the revised ordinance to include more whistle-blower protections for bank employees who report to authorities suspected illegal banking practices.

Wells Fargo doesn’t comment on legislation, Messick said.

The California Bankers Association also declined to discuss the proposal. A spokeswoman said the organization will not have an official comment “until we have an opportunity to see and review a draft of the actual ordinance that would seek to revise the city’s current responsible banking ordinance.”

To contact the reporter on this story: Rhonda Smith in Washington, D.C. at rsmith@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

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