Efforts by Wells Fargo to move beyond its bogus accounts scandal have been set back by the loss of a big government contract.
The Philadelphia City Council voted Monday to change handlers of its $2 billion payroll account, according to published reports. Instead of continuing the arrangement with Wells, the city chose to hire Citizens Bank for the next fiscal year starting in July.
The move comes under the dark cloud that has enveloped Wells since the second-largest bank by assets in the U.S. agreed to pay $185 million in fines for opening some 2 million accounts for customers without their knowledge.
More than 5,000 Wells Fargo employees lost their jobs, and several top executives were sacked. The scandal emanated from aggressive cross-selling goals in which sales people were encouraged to enroll customers in as many programs as possible.
Philadelphia city officials said the decision to switch payroll providers was not related directly to the scandal, though it seemed to play at least some role.
"Time and time again their actions have revealed them to be the antithesis of corporate social responsibility," Councilwoman Cindy Bass said in a statement. "I want to thank my colleagues on the committee for doing the right thing and sending a message that we will not do business with companies that engage in unethical business practices."