When you are one of the biggest banks in the country, chances are you are spending more time focused on your financial concerns than ethical ones. However, Wells Fargo will be spending the next two years preparing to conduct an internal review of its ethics due to lawsuits that have been sweeping the financial industry as of late.
Mary Eshet, a spokeswoman for Wells Fargo, notes that the U.S. bank prides itself in its strong code of ethics already in place and credits its ethical business practices as being a cornerstone of the bank’s culture. Nevertheless, the self-initiated review will make room for new approaches and improvement within Wells Fargo’s system.
The review, which starts Jan. 1, will last about 18-24 months and is being led by the newly formed Ethics Program Office and deputy general counsel Christine Meuers. Meuers not only performed the analysis on the review but is also continuing to look into best practices for how employees should act and handle conflicts of interest across more than 80 business lines.
Just last month, rumors circulated regarding Wells Fargo being the next bank to be investigated by the Financial Institutions Reform and Recovery Act, which has looked into Bank of America, JPMorgan Chase & Co, Credit Suisse, and Citigroup. With U.S. attorneys investigating Wells Fargo for more than a year, the investigations are evaluating where the firm was in violation of provisions under FIRREA. Could it be that Wells Fargo is joining other giant financers and lenders who have initiated similar reviews to avoid the scrutiny and legal challenges that have tarnished the reputations of big name banks?
According to a JournalNow report, the firm’s employees already are held to a 24-page code of ethics that includes workers being barred from investing in or making a loan to a Wells Fargo customer or vendor unless it meets certain requirements. Employees also aren’t allowed to accept gifts valued at more than $200 from customers.
Wells Fargo is hoping that by conducting this review, they will be able to avoid similar claims made against competitors such as Bank of America and JP Morgan Chase. The bank apparently has set aside $2.7 billion for litigation and legal matters from 2008 through June, according to data compiled by Bloomberg. That compares with $21.3 billion at JPMorgan, $19.1 billion at Bank of America and $8.1 billion at Citigroup.
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