Wells Fargo CEO apologizes after blaming shortage of Black talent for bank’s lack of diversity

Wells Fargo’s chief executive apologized Wednesday for blaming the lack of Black employees at the bank on a “limited” talent pool.

“While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from,” Charlie Scharf said in a June company memo, Reuters reported Tuesday. The memo and similar statements by Scharf during a Zoom meeting exasperated some Black employees, according to the news service.

Scharf’s comments were pilloried online.

“Perhaps it’s the CEO of Wells Fargo who lacks the talent to recruit Black workers,” Rep. Alexandria Ocasio-Cortez (D-N.Y.) said in a tweet.

Sherrilyn Ifill, president of the NAACP Legal Defense and Educational Fund, said, “I know many highly talented Black lawyers who would have advised you against making such a statement.”

On Wednesday, Scharf apologized in a memo to the entire company “for making an insensitive comment reflecting my own unconscious bias.”

“There are many talented diverse individuals working at Wells Fargo and throughout the financial services industry and I never meant to imply otherwise,” Scharf wrote. “It’s clear to me that, across the industry, we have not done enough to improve diversity, especially at senior leadership levels. And there is no question Wells Fargo has to make meaningful progress to increase diverse representation.”

Just 4.1 percent of Wells Fargo’s senior workforce was Black in 2018, compared with 8 percent in 2015.

U.S. business leaders have long blamed a shortage of minority applicants for the lack of diversity among their employees, an explanation disputed by recruitment managers and diversity experts as insufficient.

The Wells Fargo controversy comes as protests of police brutality and racism have swept across the country, drawing pledges from corporate America to fight racial inequality. It also comes as Wells Fargo, one of the country’s largest banks, continues to struggle to repair its image after a series of consumer abuse scandals, including admitting that it had opened millions of fake accounts customers didn’t want.

During the protests, Wells Fargo said a committee of senior executives was meeting daily to develop recommendations for addressing societal inequalities facing Black employees and customers.

“As a white man, as much as I can try to understand what others are feeling, I know that I cannot really appreciate and understand what people of color experience and the impacts of discriminatory behavior others must live with,” Scharf told employees at the time.

Wall Street, known for an insular culture that has historically been hostile to women and people of color, has for years promised to boost the diversity of its workforce and leadership ranks. But the industry has struggled to make progress. Between 2007 and 2015, the number of Blacks in first-, mid- and senior-level management positions fell from 6.5 percent to 6.3 percent, according to a Government Accountability Office report.

Wells Fargo has settled several discrimination cases in recent years. In 2012, the company agreed to pay more than $175 million to settle allegations from the Justice Department that it steered Black and Latino borrowers into expensive loans and charged them excessive fees. As part of the settlement, Wells Fargo did not admit wrongdoing, saying it treated all of its customers fairly but wanted to avoid protracted litigation.

Last month, the bank, which has more than 260,000 employees, settled a case directly related to its hiring practices. Wells Fargo agreed to pay $7.8 million to settle allegations by the Labor Department that it discriminated against more than 34,000 Black and more than 300 female applicants. Wells Fargo did not admit liability as part of the settlement but was required to allow federal officials to proactively monitor some of its business operations and compliance measures.


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