Wells Fargo Fined $185 Million for Creating 2 Million Fake Accounts

The Consumer Financial Protection Bureau, Office of the Comptroller of the Currency, and Los Angeles City Attorney announce a combined $185 million settlement with Wells Fargo for the systematic creation of more than two million unauthorized deposit and credit card accounts. The CFPB assesses a $100 million penalty—the largest in the agency’s history—while the OCC adds $35 million and Los Angeles contributes $50 million. Wells Fargo also agrees to pay full restitution to affected consumers.

Scope of Fraud Revealed

Federal regulators reveal that Wells Fargo employees secretly opened approximately 1.5 million unauthorized deposit accounts and 565,443 unauthorized credit card accounts between 2011 and 2016. According to CFPB Director Richard Cordray, “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses.” The scheme involved transferring funds from customers’ legitimate accounts without authorization, creating fake email addresses, and forging signatures. Customers faced fees, charges, and potential credit damage from accounts they never requested.

Sales Culture to Blame

The CFPB identifies Wells Fargo’s aggressive sales culture as the root cause: “Sales targets and compensation incentives” drove thousands of employees to commit fraud. The bank’s famous cross-selling strategy—promoted by CEO John Stumpf as evidence of deep customer relationships—is exposed as a systematic scheme to inflate metrics through fraud. Wells Fargo confirms it has already fired approximately 5,300 employees over the fraudulent activity, though no executives face consequences.

Historic but Inadequate

While the $185 million fine represents the CFPB’s largest enforcement action to date, it amounts to less than three weeks of Wells Fargo’s typical quarterly profit. For a bank with $1.9 trillion in assets, the penalty functions as a minor cost of business rather than a deterrent. The settlement includes no criminal charges, no admission of wrongdoing beyond what regulators have proven, and no accountability for senior leadership who designed and profited from the sales culture that incentivized fraud.

Significance

The settlement exposes one of the largest retail banking frauds in American history while simultaneously demonstrating the limits of regulatory enforcement. Millions of customers were defrauded, thousands of workers fired, yet the bank pays a fine smaller than its normal profits and executives face no consequences. The two-tiered outcome—severe punishment for rank-and-file workers, minimal consequences for the institution and zero consequences for leadership—becomes the template for the scandal’s resolution. The case will prompt intense Congressional scrutiny and public outrage, but fail to produce criminal accountability.