The chicanery and fraud that has engulfed banking giant Wells Fargo in the past year has by now been well documented.
'Without fraud, the math didn't work': Wells Fargo's cutthroat culture was reportedly simmering for decades
A hardline policy at Wells Fargo of selling extra products to individual customers dated back to the 1990s, and it built a pressure-cooker environment.
Fabricating customer information and creating thousands of unauthorized customer accounts has resulted in $185 million in fines, the dismissal of roughly 1,000 junior employees, the ouster of CEO John Stumpf and other high-level executives, and a spate of ongoing government investigations.
The company has set aside some $1.7 billion to pay for potential costs surrounding the scandal.
But the pressure-cooker sales environment that produced these results isn't a recent development, and while it grew more pervasive and pernicious under Stumpf, the problems long predated his reign, according to a deep-dive profile by Bethany McLean in Vanity Fair.
McLean reveals that the core policies that led Wells Fargo astray have been baked into the system for two decades, and that the fraudulent practices and "gaming" by employees to reach sales goals has been a simmering problem for a long time.
Yesenia Guitron, a former personal banker for the company in California's Napa Valley, describes just how maddening and unrealistic the situation had gotten for employees by 2008:
The pressure was intense. There were "morning huddle" meetings to discuss "Daily Solutions," or sales goals for the day, and a manager would do hourly check-ins to see if each banker was making progress toward his or her quota, which in 2008 was eight products per day. (The number was increased in 2010 to 8.5.) "Call nights" were scheduled after the branch closed to "help" bankers who were having trouble meeting their sales goals, which were challenging in St. Helena. According to an analysis that was done for a lawsuit Guitron later filed, there were only about 11,500 potential customers in the area, and 11 other financial institutions. The quotas for the bankers at Guitron's branch totaled 12,000 Daily Solutions each year, including almost 3,000 new checking accounts. Without fraud, the math didn't work.
McLean's full story of the background and run-up to the breaking point is worth a read. Check it out over at Vanity Fair.
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