Wells Fargo says SEC is examining its hiring practices
Wells Fargo & Co said on Monday that the US Securities and Exchange Commission has begun investigating its hiring practices after the Justice Department opened a related probe.
In its quarterly report to the SEC, the fourth-largest U.S. bank said both agencies "are conducting formal or informal inquiries or reviews of the company's diversity-related hiring practices."
Wells Fargo (NYSE:WFC) drew attention in June when it suspended a policy requiring it to interview a "diverse" group of people for some jobs in which half of the candidates were women or people of color.
The suspension came after The New York Times reported that the policy led some employees at the San Francisco-based bank to conduct "mock" interviews for jobs that had already been filled.
In reinstating the policy on August 1, Wells Fargo said it was meeting with recruiters and hiring managers to evaluate ways to increase hiring diversity without the alleged abuses.
While the SEC can pursue civil cases, the Justice Department has criminal enforcement power.
Wells Fargo also said in Monday's filing that it is in talks with another federal agency, the Consumer Financial Protection Bureau (CFPB), to resolve "a number" of investigations, including auto loans, consumer deposit accounts and mortgage loans.
The bank had set aside $2 billion for legal bills in the third quarter. Its maximum legal exposure is estimated at $3.7 billion on Sept. 30, exceeding reserves, up from $3.2 billion three months earlier.
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