Wells Fargo just lost a major client.
The Philadelphia City Council voted Monday to change handlers of its $2 billion payroll account from Wells Fargo to Citizens Bank, CNBC is reporting. Citizens Bank will take over the account at the beginning of the next fiscal year in July.
The move comes after Wells agreed to pay $185 million in fines over its bogus accounts scandal, in which the company opened some 2 million accounts for customers without their knowledge. CNBC notes that the scandal arose from “aggressive cross-selling goals” in which the sales department was urged to enroll customers in as many programs as possible.
Following the scandal, several top executives were fired and more than 5,000 Wells Fargo employees lost their jobs. Philadelphia city officials reportedly say the scandal wasn’t directly related to the switch in providers, though it “play(ed) at least some role.”
“Time and time again their actions have revealed them to be the antithesis of corporate social responsibility,” Councilwoman Cindy Bass said in a statement. “I want to thank my colleagues on the committee for doing the right thing and sending a message that we will not do business with companies that engage in unethical business practices.”
CNBC reported that the bank will cooperate and work for a smooth transition to Citizens. Wells Fargo will reportedly remain a depository bank for the city.
Read the full report in CNBC here.
—RealClearLife
This article was featured in the InsideHook newsletter. Sign up now.
