WASHINGTON _ Wells Fargo & Co. said Tuesday it would eliminate all sales goals for credit cards, checking accounts and other retail banking products as the financial giant tries to repair its image following a $185 million settlement over aggressive sales tactics.
The announcement came as the Senate Banking Committee said Monday night it would hold a hearing next week on Wells Fargo's sales practices, which pushed thousands of employees to open as many as 2 million accounts without customers' authorization.
Also on Tuesday, Treasury Secretary Jacob Lew called Wells Fargo's sales practices "bad behavior" and showed the need for tough oversight of banks and other financial firms.
"The pattern of behavior that we've seen here is something that needs to stop," he said during an appearance at a New York City conference. "It is not acceptable to do things that are designed to increase either individual or firm bottom lines by deceiving customers or passing along charges that are either invisible or they don't know about."
The sales tactics were first uncovered by the Los Angeles Times in 2013 and triggered investigations by local and federal regulators that led to the settlement last week.
Wells Fargo Chief Executive John Stumpf, who is expected to be called to testify at the Senate hearing on Sept. 20, said Tuesday that the company has "significantly strengthened our training programs, controls and oversight."
"The elimination of product sales goals represents another step to reinforce our service culture, helps ensure that nothing gets in the way of our ability to achieve our mission and is consistent with our commitment to providing a great place to work," he said.
The sales goals will be eliminating starting Jan. 1, Wells Fargo said.
Last year, Los Angeles City Attorney Mike Feuer sued Wells Fargo, alleging the bank "victimized their customers by using pernicious and often illegal sales tactics," such as unrealistic quotas.
The Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency also opened investigations and found that bank employees illegally transferred money from legitimate accounts into unauthorized ones opened for customers without their approval.
Wells Fargo did not admit any wrongdoing in the settlements. But the bank apologized to its customers and said it was changing its sales practices, such as lowering sales goals.
On Tuesday, with the Senate hearing looming, Wells Fargo took the further step of eliminating all sales goals for retail banking products.
Lew said regulators were "correct to take action" against Wells Fargo. And while declining to comment further on the specifics of the case, he said it highlighted the need for the strong regulations put in place by the 2010 Dodd-Frank financial reform law. The consumers' bureau was created by that legislation.
"This ought to be a moment when people stop and remember how dangerous the system is when you don't have the proper protections in place," Lew said at the Delivering Alpha conference, hosted by CNBC and Institutional Investor magazine.
"This is a wake-up call. It should remind all of us and firms that culture and compensation make a difference," he said. "How you reward people, how you motivate people and what values you hold people to matter."
Shares of Wells Fargo were down nearly 3 percent to $47.12 on Tuesday, and were off more than 4 percent since the announcement of the settlement agreement last week.
