The US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are investigating Wells Fargo’s diversity hiring practices after an explosive article from The New York Times alleged that the bank held fake interviews with “diverse” candidates.
The article, which was published in May, claimed that an internal policy that required managers to interview diverse candidates for some jobs led to a series of fake interviews with women and non-white applicants for positions that were already filled.
After the NYT piece, the bank halted the policy and reinstated it in August with some updates. “We are recommitting to our diverse candidate slate guidelines with changes that will help clarify and simplify the process and lead to a better experience for all candidates, internal and external,” Chief Human Resources Officer Bei Ling said.
Wells Fargo also announced in the SEC filings that it would soon settle several issues with the Consumer Financial Protection Bureau (CFPB), which will likely cost it more than $1 billion.
Firms should expect increased scrutiny from regulators (and others) regarding their hiring practices, as attention to the S in ESG appears to be a significant priority for the Biden Administration.