Federal Reserve

'Bad' incentives, poor communication behind the Wells Fargo sales scandal: Fed's Dudley

William Dudley, president of Federal Reserve Bank of New York.
Hailey Lee | CNBC

Bad incentive structures for employees and a lack of communication to management contributed to Wells Fargo's sales practices scandal, Federal Reserve Bank of New York president William Dudley said on Wednesday.

Dudley, who spoke at an event related to banking culture, said that Wells Fargo employees were given "really bad" incentives. He added that when employees complained, it went up the chain of command but concerns either were not heard or ignored.

The bank reached a $190 million settlement with U.S. authorities in 2016 over its employees opening accounts in customers' names without their permission to hit sales targets.