NEW YORK — Utah will receive $10 million of the $575 million Wells Fargo will pay in a settlement with attorneys general from all 50 states and the District of Columbia that are investigating fake accounts opened without the knowledge of customers and a string of other dodgy practices.
Under the agreement announced Friday, the bank will also create teams to review and respond to customer complaints about its banking and sales practices.
“This historic settlement agreement is the result of hard work by Utah and many other states in holding Wells Fargo to task for taking advantage of bank customer’s and their information in an effort to boost sales,” Francine A. Giani, executive director of the Utah Department of Commerce, said in a news release Friday. “The Department of Commerce is grateful to our partners in the Utah Attorney Generals’ Office for their hard work on our behalf on a case of this importance.”
The bank has been under a cloud since 2015 when it acknowledged that employees had opened millions of fake bank accounts for customers in order to meet sales goals. It has also said that it sold auto insurance and other financial products to customers who didn't need them.
Wells Fargo has already been ordered to pay more than $1.2 billion in penalties and faced stricter regulations.
"This agreement underscores our serious commitment to making things right in regard to past issues as we work to build a better bank," said CEO Tim Sloan.
Sloan apologized for the phony accounts and other practices during a congressional hearing in 2017, but the company remained under pressure from the weight of all the scandals. The company has announced plans to lay off up to 10 percent of its workforce over the next three years.
California, the bank's home state, will get more than a quarter of the settlement funds because of the number of Wells Fargo customers residing there.
California Attorney General Xavier Becerra called the bank's behavior "disgraceful."
"Wells Fargo customers entrusted their bank with their livelihood, their dreams, and their savings for the future," said Becerra. "Instead of safeguarding its customers, Wells Fargo exploited them, signing them up for products - from bank accounts to insurance - that they never wanted. This is an incredible breach of trust that threatens not only the customers who depended on Wells Fargo, but confidence in our banking system."12 comments on this story
Other Western states are set to receive settlement funds as well, including Nevada, $13.3 million, Arizona $37.1 million and New Mexico, $7 million.
“We appreciate the efforts Wells Fargo has made to move forward and make this right,” Spencer Austin, criminal chief deputy at the Utah Attorney General’s Office, said in a news release. “We all share the same goal: to enjoy a strong economy where consumer’s privacy, choices, and funds are protected. To this end, the Division of Consumer Protection, our assistant A.G.s, and sister-state attorneys general acted with vigilance and diligence, and we are grateful for their hard work.”