The debit and credit card processing venture of Wells Fargo is undergoing restructuring and this has led to the laying off of around 50 employees. According to the lender the move is aimed at aligning the workforce with current business volumes. Wells Fargo added that it would try as much as possible to absorb the employees who have been laid off in other departments within the bank.
According to a spokesperson for Wells Fargo, Sara Hassell, the planned layoffs are not related to the lender’s digitization move where the bank is planning to roll out a mobile app next year aimed at small business customers. Since a scandal involving sales practices broke out at Wells Fargo the lender has sent home quite a number of employees. The lender has also had to close some branches in order to manage the high litigation costs.
Wells Fargo Advisors
Additionally the advisory arm of Wells Fargo has had to reach a settlement with the U.S. Securities and Exchange Commission for failing to report money laundering-related suspicious activities. Per the law broker-dealers are supposed to file reports on suspicious activity with the U.S. Treasury Department whenever they come across certain patterns of behavior or transactions. Between March 2012 and June 2013, Wells Fargo Advisors, the subsidiary of Wells Fargo that acts as an investment adviser and a securities brokerage, did not file or failed to file on time around 50 such reports.
Per the filing of the U.S. Securities and Exchange Commission 45 of those reports were continuing activities and most took place in accounts which were held in American branch offices of Wells Fargo focused on dealing with international clients.
Penalties and operations review
The settlement will now see Wells Fargo pay $3.5 million in penalties. Wells Fargo will also be required to undertake a review of its procedures and policies revolving around the reporting of money laundering and update these policies besides offering training to its employees.
“We cooperated fully with the SEC’s investigation, and we remain committed to further self-reviews and enhancements that help ensure suspicious activity is disclosed in a timely manner,” said a spokesperson for Wells Fargo.
The closure of Wells Fargo’s debit and credit card processing venture also coincides with a revelation by the Justice Department of the United States that the lender has repaid an additional $5.4 million to members of the military service numbering 450 whose vehicles the bank had repossessed illegally.