Wells Fargo Loses $2 Billion Payroll Contract with City of Philadelphia

Wells Fargo Loses $2 Billion Payroll Contract with City of Philadelphia

May 3, 2017         Written By Bill Hardekopf

On Monday, the Philadelphia City Council voted to end its payroll contract with Wells Fargo for the upcoming fiscal year. Starting in July, Citizens Bank will take over the $2 billion account for city employees.

The cancellation comes after an investigation revealed that Wells Fargo employees had created more than two milllion fake checking and credit card accounts between 2011 and 2015. Philadelphia officials said the decision to end the contract was not directly the result of the scandal, but they referred to Wells Fargo’s business practices as the “antithesis of corporate social responsibility.”

The City amended the initial bill to create a six month transition period. Wells Fargo will continue to act as the depository for Philadelphia through December 31, 2017. In that time, Citizens Bank will work on new programs for low income families, minority businesses, and other groups in the community.

Wells Fargo said they were disappointed in the decision, but they “are proud of the support that [they] have diligently and professionally provided to the city in a number of capacities as its operating bank for the past several years.” The bank has already agreed to a class action settlement of $142 million to reimburse affected customers, and they plan to launch a new advertising campaign this summer to highlight the progressive actions they have taken since the scandal.



The information contained within this article was accurate as of May 3, 2017. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


bill-hardekopf

About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
View all posts by Bill Hardekopf
Featured Low Interest Card
Top Features : 1.25X miles on every purchase; no annual fee; bonus of 20,000 miles once $1,000 is spent in first 3 months
Featured Cash Back Card
Top Features : No Annual Fee, Bonus Offer, Cash Back
Featured No Annual Fee Card
Top Features : Earn cash back twice. 1% when you buy plus 1% as you pay; 0% APR for 18 months on balance transfers
Featured Bad Credit Card
Top Features : No Annual Fee; Cash Back match at the end of your first year; Social Security Alerts
Featured Fair Credit Card
Top Features : No annual fee; access to higher credit line after making first 5 monthly payments on time
Featured Limited/No Credit
Top Features : No annual fee; reports to major credit bureaus; access to higher credit line after making first 5 monthly payments on time