The 110-page report ordered by. Both were ultimately unwilling to accept criticism that the bank's sales-focused business model was failing.
"(Wells' management) created pressure on employees to sell unwanted or unneeded products to customers and, in some cases, to open unauthorized accounts", the board said in its report.
But the report heaped most blame on senior management, not the fired employees. They fired the offending employees without considering the underlying causes.
The aggressive sales culture dated back at least 15 years, much longer than previously thought, the report said.
The bank was fined $185m by regulators a year ago and has paid $110m to settle a lawsuit brought by customers. It also said she sought to block efforts to escalate investigations into sales practices and kept from the board information about the number of employees terminated. It has been under investigation by the Securities and Exchange Commission because of its practices. It's not clear, however, how much in compensation they were allowed to keep after collecting millions in salary, bonus and stock awards during their lengthy Wells Fargo careers.
The "clawbacks" of executive pay by the company are among the largest in history and a sign that big US banks feel increasingly under pressure to show the public that they can hold themselves accountable for corporate wrongdoing. Tolstedt, who ran the community bank - Wells Fargo's term for the branch network - was told to fix the problem she had created.
In total, 5,300 staff were fired for sales practice abuses over five years. The report says supervisors placed intense pressure on employees to increase sales, even to the point of calling them several times each day to demand a progress report.
Tolstedt declined for an interview and she rejected the conclusion revealed by the board. But by then the board knew very well that Tolstedt's management was leading the company toward disaster.
Stumpf was grilled by the U.S. Senate Banking committee on September 28, drawing criticism from the committee for "failing to answer many questions".
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"Stumpf was by nature an optimistic executive who refused to believe that the sales model was seriously impaired", the report states.
Sanger said the report showed the board had taken the appropriate action with the information it was given and had revamped compensation, leadership and its own structure to make sure such abuses did not reappear. That was the year the Los Angeles Times published a landmark investigation on Wells Fargo's sales culture. The ex-CEO was not yet giving his comments about the report. The OCC's goal is to see whether the problems at Wells were isolated.
But if you look a little deeper into the lengthy document, you learn some interesting things about how the bank operated and what led it to start opening bank and credit card accounts in customers' names, whether they wanted them or not. Stumpf stepped down in late October.
The rehirings come as part of reforms introduced by CEO Tim Sloan, according to a Bloomberg report.
An investigation conducted by outside investigators concluded that the leaders of the company had not acted swiftly to contain the problem. Community bank executives also minimised the extent of the dismissals in their interactions with the board. The report commended lawyers in the department, however, for working on various committees in "commendable attempts" to address sales misconduct. Of the four-Elizabeth Duke, Donald James, Hernandez, and Stephen Sanger (who is now the Wells chairman)-only Duke joined the board after the scandal (in 2015).
But, like other warnings, this 2004 report fell on deaf ears inside Wells Fargo.
The Office of the Comptroller of the Currency which serves as the federal regulator of banks has stated as sits mission, "the ensuring that national banks and federal savings associations operate in a safe and sound manner; provide fair access to financial services, treat customers fairly and comply with applicable laws and regulations". And last week an influential shareholder advisory firm said investors should vote out almost the entire board of directors when the bank holds its annual shareholder meeting later this month.
The report paints the bank's board as being out of the loop on the scope of the sales problems.
Ken Sweet is the banking and consumer financial issues writer for The Associated Press.