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What Is Wells Fargo Unethical

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Consequently, the fake account scandal had been exposed to the public in 2016. Wells Fargo committed the fraud and was agreed to pay 185 million USD, settling the penalties made by government regulators which contained 35 million USD by the Office of the Comptroller of the Currency, 100 million by the Consumer Financial Protection Bureau and 50 million by the Los Angeles City Attorney. The company also announced that 5300 low-level employees who created the new accounts without approved by customers, were fired due to the unethical behaviour. Wells Fargo changed the performance measurement on its compensation program to avoid unethical behaviour of employees.

Wells Fargo rebuilded the operational structures to regain the trust from customers …show more content…

“Dodd–Frank” was an act that created the Consumer Financial Protection Bureau (CFPB) which provided financial protection for customers. Moreover, the Office of the Comptroller of the Currency (OCC) was the one of regulatory agencies in the United State Department of the Treasury to pursue a number of main objectives, such as maintaining the safety and soundness of the national banking system; foster competition by allowing banks to offer new products and services; enforce anti-money laundering and anti-terrorism finance laws that apply to national banks, federally licensed branches and agencies of international …show more content…

Since the banking industry is very competitive, banks always provide more complex products and services to customers while not disclose enough information to them. They failed properly monitoring Wells Fargo in the highly competitive banking environment because OCC did not want to understand the root causes of the cross selling; OCC was unwilling to detect any problems in the first place. To improve the regulatory environment, those regulators should play an important role in the market and take more responsibility to the customers. Moreover, these regulators need sufficient time to upgrade the mechanism associated with those products and services. This lack of understanding and knowledge of services and products provided by the banking industries will create opportunities for banks to conduct unethical behaviour. Moreover, “The OCC did not take timely and effective supervisory actions after the bank and the OCC together identified significant issues with complaint management and sales practices,” the report said. To remediate this, the government should respond to the market as quickly as

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