Menendez, Brown, Warren hold Wells Fargo accountable for conducting misleading interviews with women and minority applicants

WASHINGTON – U.S. Sen. Bob Menendez (DN.J.), senior member of the Senate Banking, Housing and Urban Affairs Committee, Chairman Sherrod Brown (D-Ohio) and Sen. Elizabeth Warren (D-Mass.) today sent a letter to Chief Wells Fargo CEO and President Charles Scharf and Senior Vice President Bai Ling to express their deep concern about the bank’s reported practice of conducting “mock interviews” with women and minority candidates after they had already filled open positions. The effort comes ahead of today’s long-awaited Banking Committee hearing with leaders of some of America’s biggest banks.

“According to The New York Times, Wells Fargo undertook these mock interviews to artificially inflate diversity statistics in an attempt to satisfy an internal goal of interviewing at least one woman and one person of color for every open position — a goal that was supposed to increase diversity in the workforce power of Wells Fargo,” the senators wrote. “The information disclosed by [the reporting] is not only highly offensive and suggestive of systemic bias and discrimination at the bank, but may also constitute a pattern of misleading shareholders and federal and state regulators in overseeing Wells Fargo’s implementation of nondiscrimination laws and a broader public commitment to diversity , equity and inclusion.”

The senators indicated that this is not the first time the financial institution has come under fire for discriminatory hiring and employment practices. In 2018, the US Department of Labor alleged that Wells Fargo discriminated against 30,000 black applicants and hundreds of women in the hiring process – the case was later settled for $8 million. In 2013, approximately 320 black financial advisors filed a class-action lawsuit against the company, alleging that Wells Fargo steered them away from new lucrative opportunities. That case was settled for $36 million.

“Given this history […] we are concerned that Wells Fargo is not taking seriously its responsibilities and commitments to federal and state regulators, to its shareholders, and to the customers and communities it serves,” the senators added.

The senators also expressed concern about Wells Fargo’s response to The New York Times’ reports. Instead of working to actually create a fair and equitable hiring process that would lead to a more diverse workforce, the bank is considering allowing hiring managers to seek exceptions to its own diversity interview goals.

“…[I]If hiring managers can more easily deviate from his goals, diverse candidates may be considered less often for open positions. In addition, Wells Fargo recently announced that it had agreed to a third-party racial equity audit after years of urging shareholders to vote against such audits. While these are potentially good first steps, Wells Fargo needs to take more immediate action to restore trust in its recruiting, application, interview and hiring processes.” the senators concluded.

Senators have long worked to improve diversity in the financial services industry and protect consumers from unfair practices at the largest financial institutions. Last October, Senator Menendez led a letter signed by 21 Senate Democrats urging the SEC to expeditiously adopt AMAC’s recommendations to increase diversity among asset managers. The senator also led the charge to further diversify corporate America by authoring the Improving Corporate Governance Through Diversity Act of 2021, legislation that would address deficiencies in the SEC’s diversity disclosure rule by requiring public companies to disclose information related to race, gender, ethnicity and veteran status to corporate boards and senior management.

Over the past several months, Senator Menendez, along with Senator Warren, Chairman Brown and several other colleagues, have held the big banks accountable for widespread fraud and deception at Zelle, a money transfer app owned by seven of the largest US banks. including JP Morgan, Chase & Co., Bank of America and Wells Fargo. Senator Menendez recently sent a letter to the banks that own Zelle’s parent company, Early Warning Systems, LLC, demanding more information about what, if anything, the banks are doing to protect consumers from the Zelle scam.

Find a copy of the letter HERE and below.

Dear Mr. Scharf and Ms. Ling,

We are writing with deep concern regarding recent reports that Wells Fargo is conducting “mock interviews” with women and minority applicants for positions that are already filled. According to the New York Times, Wells Fargo undertook these mock interviews to artificially inflate diversity statistics in an attempt to satisfy an internal goal of interviewing at least one woman and one person of color for every open position — a goal that was meant to increase diversity in the company’s workforce. Wells Fargo.¹ The information disclosed by The New York Times is not only highly offensive and suggests systemic bias and discrimination at the bank, but may also constitute a pattern of misleading shareholders and federal and state regulators in overseeing Wells Fargo’s compliance with non-discrimination laws and more broadly, a societal commitment to diversity, equity and inclusion.

Unfortunately, this is not the first time Wells Fargo has come under fire for discriminatory hiring and employment practices. In 2018, the Department of Labor alleged that Wells Fargo discriminated against 30,000 black applicants and hundreds of women in the hiring process. Wells Fargo settled the case for $8 million. ² In 2013, approximately 320 black financial advisors filed a class-action lawsuit against the company, alleging that Wells Fargo steered them away from new lucrative opportunities. Wells Fargo settled that case for $36 million.³ Given this history and the latest New York Times report, we are concerned that Wells Fargo is not taking seriously its responsibilities and commitments to federal and state regulators, to its shareholders, and to the customers and communities it serves.

In response to The New York Times article, Wells Fargo said it would try to end mock interviews by allowing hiring managers to seek exceptions to the bank’s diverse interviewing goals.⁴ However, if hiring managers can more easily deviate from his goals, diverse candidates may be considered less often for open positions. In addition, Wells Fargo recently announced that it had agreed to a third-party racial equity audit after years of urging shareholders to vote against such audits.⁵ While these are potentially good first steps, Wells Fargo needs to take more immediate action to restore trust in its recruiting, application, interview and hiring processes. Please respond to the following questions about Wells Fargo’s practices no later than October 13, 2022:

1. Has any Wells Fargo business line had a formal or informal practice of interviewing applicants, particularly women and minority applicants, for previously held positions? If so, please indicate which lines of business had such practices and when such practices were introduced. Please provide any documentation of such practices.
2. Prior to the May 19, 2022 New York Times article, were you aware of hiring managers in any of Wells Fargo’s business lines interviewing applicants, particularly women and minority applicants, after the positions had been filled?
   1. If so, please indicate which lines of business and when you learned of such practices.
   2. Please describe any disciplinary action taken against hiring managers for conducting such interviews?

3. What percentage of Wells Fargo job offers for 2020 and 2021 were made to female, black, and Hispanic applicants, respectively?
4. Does Wells Fargo require interviewers and hiring managers to participate in anti-bias training before interviewing candidates?
5. How does Wells Fargo currently recruit diverse candidates? Does the bank work with different professional organizations? What steps will you take to rebuild trust with partners and organizations in the recruitment process?
6. What specific actions has Wells Fargo taken to address reported issues of bias and discrimination in Wells Fargo’s recruiting, application, interview and hiring processes? How will Wells Fargo ensure that fake interviews don’t happen in the future?

The practice of interviewing candidates, particularly women and minority candidates, for previously held positions is deeply offensive to qualified and talented candidates who have the ability to enrich and contribute to Wells Fargo. We hope that you will take prompt action to remedy this problem and identify meaningful steps forward in the recruitment, hiring and retention of various employees across the Bank’s business lines and senior management.

We look forward to your prompt response to our questions.

At your disposal,

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