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Wells Fargo CEO says fixing fake accounts will take more time

Wells Fargo CEO Tim Sloan said the company could need several more months to resolve customer damage tied to its massive sales practices scandal, such as figuring out if people had trouble getting approved for other loans because of the fake accounts bank employees opened. Wells Fargo has seen a sharp drop in new account openings and bank traffic since admitting in September that employees pressured to meet ambitious sales goals opened up to 2 million accounts without customers’ permission. While Wells has changed its sales practices, ousted some executives and called tens of millions of customers to check on whether they truly opened the accounts in question, Sloan acknowledged that the full scope of the effect is not yet known. Determining how a negative mark on a customer’s credit score caused by Wells Fargo affected a person’s ability to borrow money or take out a mortgage is more complex than concluding whether customers paid fees on their checking accounts when they shouldn’t have, he said. The scandal resulted in a $185 million fine from the Consumer Financial Protection Bureau and other government groups, and directly led to the abrupt retirement of Sloan’s predecessor, John Stumpf, in October. Wells Fargo’s board of directors is conducting its own investigation into the bank’s sales practices; a report is expected to be out in April, ahead of the annual shareholder meeting. [...] Sloan says most of that slowdown is tied to customers who were trying to refinance at lower interest rates, and does not reflect any fundamental slowdown in the U.S. housing market or economy. “If rates rose dramatically, that could have a big negative impact, but I think the Fed is cognizant of the fact they want to raise interest rates without having a dramatic impact on economic growth,” he said.

Article by By Ken Sweet (c) Business and Technology News - Read full story here.