Tim Sloan’s denial could hardly have been more categorical.

The CEO of Wells Fargo was seated onstage in Los Angeles Monday, alongside four other top executives from different industries. They were gathered to talk about “creating meaningful lives for the 21st century workforce,” the kind of lofty topic you’d expect at the annual Milken Institute Global Conference.

At one point, the moderator asked Sloan to respond to recent claims that Wells, as part of the fraudulent-accounts scandal that brought down his predecessor John Stumpf, had specifically preyed on undocumented workers.

"It's not true," Sloan told the audience of more than 100.

"When I hear something like that, it hurts," he said. "It's not the Wells Fargo that I know. It’s not the Wells Fargo that I care about."

But it is the Wells Fargo that Yesenia Guitron says she knew.

In several interviews, Guitron, who worked for the bank in St. Helena, Calif., from 2008 to 2010, described a surreal, pressure-cooker sales environment in which undocumented vineyard workers provided a simple answer to an impossible math problem.

Bankers were pushed to fulfill a daily quota of eight new account openings — a standard goal at branches around the country — in a town with about 5,000 residents, said Guitron.

"In 125 days, you are going to run out of customers to sell accounts to," she said, given that the St. Helena branch employed five bankers.

“Desperate times call for desperate measures,” Guitron said, describing the prevailing ethos in the branch that she says she tried, and failed, to counteract.

Often those bankers opened as many as 10 accounts under a single vineyard worker's name without the worker's knowledge, she said.

As fees on those accounts went unpaid over the time, the bank would charge the accounts off, she said. As a result, the vineyard workers would "start getting calls from collection agencies," said Guitron, whose full account of the undocumented-immigrant strategy has not been widely reported.

Her recollections resemble those of three other former Wells Fargo bankers around the country that surfaced in a recent shareholder suit. Taken together, the stories suggest that undocumented immigrants may have borne an outsize share of the client abuses at Wells Fargo.

Yesenia Guitron, a former Wells Fargo manager in St. Helena, Calif., from 2008 to 2010
“Desperate times call for desperate measures,” says Yesenia Guitron, a former Wells Fargo manager, describing the prevailing ethos in the branch that she says she tried, and failed, to counteract.

Last year, Wells admitted to opening as many as 2 million accounts without its clients' permission over a number of years. The bank paid $185 million in regulatory fines and other penalties to settle the matter in September.

Since then, the bank has taken remedial steps, such as replacing Stumpf with Sloan, clawing back pay from Stumpf and former retail banking chief Carrie Tolstedt and eliminating sales quotas. Mary Mack, who took over the retail business from Tolstedt on July 31 (shortly before the fine was announced), has been working to rebuild employee morale and consumers’ trust.

It’s unclear whether the alleged targeting of undocumented immigrants went beyond a handful of geographic areas. The pattern of alleged behavior raises the prospect of further repercussions for Wells.

"If the bank targeted a specific ethnic group, this raises the question of whether Wells Fargo also broke fair-lending laws," said Rohit Chopra, a senior fellow at the Consumer Federation of America.

'Offensive' assertions

In court filings in California last week, the three ex-bankers provided sworn declarations saying they would testify that their former branches targeted immigrants in California, Pennsylvania and Utah. The case, a shareholder complaint filed in September in Superior Court of California in San Francisco, alleges breach of fiduciary duty on the part of the bank, as well as "unjust enrichment" and "corporate waste." Guitron is not involved in this case.

The bank called the three ex-employees’ assertions about undocumented immigrants “offensive,” and said such conduct would violate its policies. It declined to comment on Guitron's allegations, except to note that in 2013 she lost a federal case against the bank, in which she claimed she was fired for whistleblowing. That was three years before the investigation by the Consumer Financial Protection Bureau, and lawsuits by the City and County of Los Angeles, forced Wells to admit to the widespread account fraud.

In each declaration, the three ex-bankers, witnesses for the shareholder plaintiffs, say Wells bankers trawled for undocumented immigrants, often on city streets, and persuaded them to open checking, savings and credit card accounts in exchange for free check-cashing services. Often, the immigrants were not told the accounts could rack up fees for failing to meet minimum account balances and other issues.

None of the court filings contain accounts from undocumented immigrants themselves. The vineyard workers in St. Helena are hesitant to talk to the press, Guitron said.

Mack, the executive charged with fixing the culture of the retail bank, told employees Monday that the allegations about undocumented immigrants "gave me pause — a lot of pause."

She was more equivocal, however, than Sloan was that day about the claims’ accuracy.

"While we have not yet been able to determine whether these allegations are true," Mack wrote in a company bulletin, "I was offended by what I read because the activities described in the allegations are inconsistent with our policies, values, and the relationships we work hard to build with everyone in our community.”

A spokeswoman for Wells Fargo added that “if any customer feels they received an account or service they did not want … we want to hear from them and we want to make it right.”

Hitting a convenience store

Back when the quota system was still in place, bankers in Petaluma turned to a nearby convenience store to try to hit their numbers, according to Kenny Russo, who was a supervising loan officer there between 2008 and 2011. Russo's account appears in a sworn declaration in the California lawsuit.

"When foot traffic was slow," Russo wrote, "the branch manager on duty instructed Wells Fargo employees of Hispanic heritage to go to a nearby 7-Eleven at 430 Washington Street in Petaluma, a known congregating point for undocumented day laborers to wait for potential employers."

There, they were told to "'round up' a group of the undocumented workers and drive them back to the Wells Fargo branch to open up checking and savings accounts in exchange for 'waiving' check-cashing fees that the day laborers would otherwise have to pay," he wrote.

Based on discussions with colleagues and managers, he added, "I was aware that these practices … were also widespread throughout the state of California."

Wells Fargo managers routinely sent bankers to this 7-Eleven in Petaluma, Calif., to pick up undocumented workers and drive them to a nearby branch to open accounts, a suit claims.
Retail channel?
Wells Fargo managers routinely sent bankers to this 7-Eleven in Petaluma, Calif., to pick up undocumented workers and drive them to a nearby branch to open accounts, a suit claims.

In Draper, Utah, Wells bankers canvassed construction sites and a local Coca-Cola factory for undocumented workers, Kelsey Hess, a former teller in the city's local branch, said in her sworn declaration in the same case.

Bankers told immigrants they could cash their paychecks for free if they opened checking, savings or credit card accounts, Hess said.

However, the workers "were intentionally not told that they needed to meet a minimum-dollar requirement in those accounts to avoid fines," Hess added.

During a "Hit the Streets Thursday" program in Macungie, Pennsylvania, Latino bankers were told to "patrol the streets and local Social Security offices for potential new clients," former branch manager Julia Miller wrote in her declaration in the lawsuit. The bankers and tellers were instructed to get prospects into local branches, she wrote.

'It's nonsensical'

In St. Helena, Guitron said, Wells made a point of urging undocumented prospects to obtain consular IDs, often from the Mexican consulate, in order to open accounts. Like many banks, Wells accepts a consular ID as the primary identification to open a new account.

However, Guitron sometimes found that bankers under her supervision falsely reported that clients held consular IDs, when they possessed only unqualified substitutes, such as a Mexican driver's license. She cited these instances in her failed federal lawsuit.

Tim Sloan was not at the helm when the alleged misconduct occurred. During this period, he “had little contact with sales practice matters,” according to the results of an investigation by a committee of the company’s board (which looked at the overall fraud and did not mention undocumented immigrants). He was the chief financial officer from 2011 to 2014 and then served as head of the wholesale bank before becoming president and chief operating officer in November 2015. Sloan became CEO in October after Stumpf resigned.

Yet he cast doubt on the claims about immigrants at the Milken conference Monday.

“Just the whole thought of, in banking, to target undocumented immigrants makes no sense, because you can’t do business with undocumented immigrants by federal law, right?” he said. “And we’ve got to follow that. So it’s nonsensical.”

Ann Marsh

Ann Marsh

Ann Marsh is a senior editor and the West Coast Bureau Chief of Financial Planning. Follow her on Twitter at @Ann_Marsh.
Kevin Wack

Kevin Wack

Kevin Wack is a California-based reporter for American Banker who covers the U.S. consumer finance industry.