Wells Fargo says it mistakenly kept fire and police pension fund fee rebates

Key Points
  • Wells Fargo admits it collected fee rebates that should have been given to a public pension fund.
  • It says the inappropriate collection was the result of a system set-up error and that the $15,000 in fees were returned.
  • The Wall Street Journal says the board of the fire and police pension fund in Chattanooga, Tennessee, fired the bank as trustee.
Wells Fargo reportedly pocketed fire and police department pension fund fee rebates

Wells Fargo acknowledged Thursday it improperly collected fee rebates that should have been given to a public pension fund while acting as its trustee.

The bank said it made a mistake when setting up the rebates and said the $15,000 in fees have been returned to the Chattanooga, Tennessee, fire and police department pension fund.

The bank made its statement to CNBC after The Wall Street Journal reported that the fund's board had grilled the bank last month over what it considered to be suspicious practices in its institutional retirement and trust unit.

The board fired Wells Fargo as the trustee, the Journal said.

It's the latest in a string of recent setbacks for the bank.

In 2016, Wells acknowledged pervasive issues with its sales practices, including setting up more than 3 million accounts without customers' knowledge as retail division employees pursued aggressive sales targets.

In late 2017, the federal government asked the bank to begin an investigation into sales practices at its Wells Fargo Advisors unit after whistleblowers flagged problems in sales and products.

Shares of Wells Fargo are down 10 percent since the start of the year.

Here's Wells Fargo statement to CNBC:

"We acknowledge that because there was a change directed by the client in 2017, we made an error in setting up the revenue sharing associated with that change appropriately and the revenue sharing rebates did not occur as intended. We are sorry this error occurred, and upon discovery the issue was fixed and the total revenue share received from the third party fund companies (approximately $15,000) was returned to the pension fund. We have been in active dialogue with the client and have been committed to resolving this matter and are disappointed they felt the need to file a complaint requesting information we have provided and are very willing to provide."