Between 2011 and 2016, Wells Fargo employees opened approximately 3.5 million accounts in customers' names without their knowledge or consent. The bank subsequently terminated 5,300 employees for their involvement.
In April 2017, Wells Fargo offered to rehire approximately 1,000 of those employees - an acknowledgment that a significant portion of the dismissals could not be sustained on the documentation available.
The retail hiring process had one clearly documented criterion: cross-sell performance. What the record did not contain was any scored assessment of conduct standards or ethical judgment at the point of hire. When terminations were challenged, the organisation had difficulty demonstrating what those employees had originally been selected against.
What is not documented at the point of hire cannot be defended at the point of termination.
Wells Fargo and Company is one of the largest financial institutions in the United States by total assets. By 2016 it employed approximately 265,000 people and operated around 8,700 branches, with significant international operations including a substantial presence in the United Kingdom.
Its retail banking division was the customer-facing core of the organisation: personal bankers, tellers, and branch managers handling day-to-day account relationships. This was the workforce at the centre of what became one of the largest retail banking misconduct settlements in US history.
Wells Fargo's retail banking strategy was built around cross-selling - encouraging each customer to hold multiple products with the bank. The strategy was known internally as "Eight is Great," a target of eight Wells Fargo products per customer household.
Cross-sell ratios were tracked weekly, reported upward through management layers, and highlighted in investor presentations as a primary performance indicator. They were also a central metric in employee performance reviews and branch-level targets.
The hiring criteria for retail banking roles reflected this emphasis. Candidates were assessed on sales aptitude, customer service history, and relevant experience. These were documented and measurable dimensions of the selection process.
This is not a claim that Wells Fargo intended to hire people without ethical judgment. It is an observation about what the hiring record contained. When selection decisions are undocumented against a criterion, there is no way to demonstrate, after the fact, that the criterion was applied.
The performance management system and the hiring system were aligned around the same documented metric. The undocumented expectations operated in a separate, unrecorded layer - and that separation became the exposure.
The CFPB enforcement action noted that Wells Fargo's performance management system created pressure that the organisation had an obligation to monitor. The hiring process that placed employees in those roles was not scrutinised in the same way - but it was the upstream decision that determined who was selected to operate under that pressure, and what criteria they had been evaluated against before they arrived.
When Wells Fargo terminated 5,300 employees, a significant number contested their dismissal. A consistent thread in wrongful termination claims was that these employees had been hired into a documented culture of cross-sell performance, trained by supervisors who were aware of the practices, and in some cases directed by managers to meet targets that could not be reached through legitimate means.
Some employees who had raised concerns internally found that Wells Fargo had filed U5 regulatory documents against them - forms required when a financial services employee is dismissed for misconduct - making subsequent employment elsewhere in the industry difficult. A review of those decisions was later required.
The offer to rehire approximately 1,000 former employees was an acknowledgment that a material portion of the termination decisions could not be maintained. The hiring record had documented what had been measured. What it had not documented was the basis on which those individuals had been assessed against the conduct standards the organisation was now holding them to.
Wells Fargo's retail hiring process had a documentation gap that a structured, criteria-based approach would have closed. The gap was not in intent - it is reasonable to assume the bank expected employees to behave ethically. The gap was in the record.
A documented assessment process extracts every requirement from the role: skills, experience, and behavioral standards. It scores each applicant against those requirements and records the reasoning for every decision. Not only the criteria that are easy to measure. Everything the role is actually expected to require.
When a conduct issue arises, the organisation can point to a contemporaneous record of what was assessed at the point of hire. If conduct standards were in the scoring criteria, the record shows it. If they were not, the record shows that too - and that is the gap that creates legal and regulatory exposure.
The question for any organisation running volume hiring is not whether it intends to select ethical people. It is whether, when asked to prove it, there is a written record showing the work.
Consumer Financial Protection Bureau. "Wells Fargo Bank, N.A." Consent Order. September 8, 2016. consumerfinance.gov/enforcement/actions/wells-fargo-bank-2016
United States Senate Banking Committee. Testimony of John G. Stumpf, Chairman and CEO, Wells Fargo and Company. September 20, 2016. banking.senate.gov
Office of the Comptroller of the Currency. "OCC Assesses Civil Money Penalties Against Eight Former Wells Fargo Bank Senior Executives." Press Release. January 23, 2020. occ.gov
Department of Justice. "Wells Fargo Agrees to Pay $3 Billion to Resolve Criminal and Civil Investigations Into Sales Practices." February 21, 2020. justice.gov
Stanford Graduate School of Business. "The Wells Fargo Cross-Selling Scandal." CGRI Closer Look Series, No. 62. gsb.stanford.edu
Multiple credible news outlets reporting CEO Timothy Sloan's statement on employee reinstatement offers. April 2017. Including CBS San Francisco and NPR.