Federal prosecutors launch criminal probe into Wells Fargo over alleged discriminatory hiring practices: report

New York prosecutors have opened a criminal investigation into banking giant Wells Fargo, probing whether the company may have pursued discriminatory hiring practices by conducting sham interviews with female and minority applicants, The New York Times reported.

The Times reported on Thursday, citing two sources familiar with the probe, that federal investigators within a newly created civil rights office at the Manhattan U.S. attorney’s office are investigating whether Wells Fargo violated federal laws prohibiting discrimination by conducting the alleged fake interviews.

The news follows a report from The New York Times last month in which a whistleblower said Wells Fargo held fake interviews with applicants it considered “diverse” for jobs that were already promised to other people. Following the article, the bank said it was pausing its hiring policy, which requires it to interview a diverse pool of candidates.

Wells Fargo has faced scrutiny from federal watchdogs multiple times in recent years.

In 2020, the international banking company agreed to pay $3 billion to resolve allegations that it opened millions of accounts without customer consent in a push to expand its services. Amid the investigation, the Federal Reserve placed an asset cap on Wells Fargo in 2018 in order to limit its growth.

Wells Fargo has also been accused of racial discrimination in the refinance loans it approved in 2020 and was recently fined $7 million by the Securities and Exchange Commission over its alleged failure to report suspicious transactions in customer accounts.

Sen. Sherrod Brown (D-Ohio), the chair of the Senate Committee on Banking, Housing and Urban Affairs, sent a letter to Wells Fargo CEO Charles Scharf last month following reports of the alleged fake interviews, criticizing the company for the multiple bad practices it has been accused of in recent years.

“Recent revelations of racial disparities in mortgage lending, fake job interviews for minority and female candidates, and anti-money laundering violations are troubling,” Brown wrote. “It is clear that Wells Fargo still has a long way to go to fix its governance and risk management before it should be allowed to grow in size. It is unacceptable that after years of failed attempts, nothing seems to have improved.”