September 8: Consumer Financial Protection Bureau fines Wells Fargo for creating at least two million accounts over the course of five years that weren’t authorized by consumers.
At $185 million, it is the most expensive fine the agency has levied against an organization since it was created in 2011 following passage of the Dodd-Frank legislation.
Wells Fargo discloses it has fired 5,300 low-level employees (but no senior executives) over a five-year period for engaging in unethical behavior.
September 13: The bank announces it is ending its employee sales goals program that led to its workforce’s fraudulent behavior by the end of the year.
Stumpf appears on CNBC to say he won’t resign but is holding himself accountable: "The best thing I could do right now is lead this company, and lead this company forward."
September 16: The House of Representative’s Financial Services Committee announces it is investigating both Wells Fargo’s practices and the regulators involved, only two days after the FBI and federal prosecutors in New York and California open their investigations.
It is also revealed that Carrie Tolstedt, whom critics say skimped on her oversight duties, stepped down from her position as head of the community banking division in July.
September 20: Stumpf testifies before the Senate Banking Committee, where Sen. Elizabeth Warren (D-Massachusetts) turns her wrath on the bank figurehead. Observers call it an evisceration, beatdown, and smackdown.
September 21: Dozens of ex-employees say Wells Fargo suppressed whistleblowers by firing them in retaliation, substantiating lawmaker suspicions the bank emphasized sales and profit margins at the expense of ethical behavior.
September 27: Stumpf forfeits $41 million in unvested equity, in addition to a year-end bonus, as the board continues to investigate the scandal. Speculation grows that the guillotine may fall on his stint as CEO.
The media is quick to note how empty the gesture seems compared to the money Stumpf gained while helming Wells Fargo.
Confidence in Stumpf’s leadership wavers, with some people saying he’s being reactive instead of proactive. The bank bleeds billions in market value.
September 29: Stumpf faces a fresh wave of outrage from lawmakers while testifying before the House Financial Services Committee, who say he buried key information regarding the scandal from the board. "We should have done more sooner," he says.
October 12: Stumpf finally steps down as CEO and chairman, "retiring" from both posts immediately. COO Tim Sloan, a Stumpf ally, takes over as CEO.
October 14: It emerges Stumpf sold $61 million of Wells Fargo stock in the month leading up to the CFPB investigation.
Hit or miss?
Miss - Wells Fargo’s response further angered an American public still wary of banking institutions with a series of anodyne talking points that didn’t address the problem. Its reputation will suffer long after its bottom line has bounced back.
Takeaways
Lesson 1: Demonstrate your company’s culture and values. Don’t tell the public a scandal is an isolated incident as reports emerge your company suppressed whistleblowers and disclosed only the minimum legally required of it.
Lesson 2: Be transparent and proactive. Better to put out a couple of blazes here and there than wait for a firestorm.
