NEW YORK – Wells Fargo & Co., which has set aside the least money for legal costs among the four biggest U.S. banks, will conduct an internal review of its ethics as the industry grapples with a surge in probes and lawsuits.
The analysis led by Christine Meuers, a deputy general counsel, will examine standards for how employees should act and procedures for handling conflicts of interest across more than 80 business lines, said Mary Eshet, a spokeswoman for the San Francisco-based bank.
The review will start Jan. 1 and last 18 to 24 months, Eshet said.
Lenders in the United States and Europe are looking to head off regulatory scrutiny and legal challenges that have tarnished reputations and sapped billions of dollars in profit. Frankfurt-based Deutsche Bank said Monday it hired a McKinsey & Co. risk specialist to bolster controls. JPMorgan Chase increased spending on internal oversight this year and assigned thousands of people to compliance roles.
Wells Fargos review will be handled by the newly formed Ethics Program Office, Eshet said. The lender, run by Chief Executive Officer John Stumpf, 60, has no plan to issue a report once the task is completed, Eshet said.
Wells Fargo has long had a strong code of ethics which has served us well, and ethical business practices are a cornerstone of our culture, she said in an emailed statement.
The review is a self-initiated effort that builds on our strong track record of ethics and integrity to assess our current approach and make recommendations for continuous improvement.
The firms employees already are held to a 24-page code of ethics. For example, workers are barred from investing in or making a loan to a Wells Fargo customer or vendor unless it meets certain conditions, the document shows.
Employees arent allowed to accept gifts valued at more than $200 from customers, subject to some exceptions.
Financial-industry business practices drew congressional scrutiny, lawmaker criticism and public protests in the years after the 2008 credit crisis fueled investor losses and triggered a recession that drove U.S. unemployment to 10 percent. A movement known as Occupy Wall Street spread across the U.S. and abroad in 2011, criticizing the wealthiest people and bankers in particular. Last year, President Barack Obama ordered the formation of a task force to look for deception in the creation and sale of mortgage-backed securities.
Goldman Sachs started a business standards committee in May 2010 after the Securities and Exchange Commission sued the company for fraud.