The House Financial Services Committee has launched an investigation into improper sales tactics at Wells Fargo & Co., and plans to call the bank’s chief executive to testify at a hearing this month.
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The committee says it will summon Wells Fargo CEO John Stumpf to testify at a hearing this month. In letters sent to top officials at the CFPB and Office of the Comptroller of the Currency, Chairman Jeb Hensarling (R-Texas) also asked for any documents tied to the regulators’ supervisory practices at the bank. Hensarling wrote that the committee reserves the right to issue subpoenas to obtain more records related to its probe.
As part of last week’s settlement, Wells Fargo agreed to pay $185 million in penalties and $5 million to customers.
A House panel says it’s starting an investigation of Wells Fargo in its opening of millions of unauthorized accounts that has become a growing scandal. The CFPB alleged that such practices resulted in insufficient fund fees and annual fees, as well as associated finance or interest charges and other late fees for some consumers. He apologized to customers and said the bank would be eliminating sales goals and would shift focus from sales to customer satisfaction. Stumpf is already scheduled to appear before the Senate Banking Committee to answer questions about Wells Fargo’s practices on September 20.
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“Wells Fargo quotas are hard for many bankers to meet without resorting to the abusive and fraudulent tactics”, the customers said in their complaint.
A Wells Fargo spokeswoman did not immediately respond to a request for comment.
That letter seeks transcribed interviews with CFO John Shrewsberry, COO and president Timothy Sloan, chief risk officer Michael Loughlin and Carrie Tolstedt, the executive who oversaw the bank unit responsible for fake accounts, and who departed the bank with a pay package worth almost $100 million.
The bank could recoup about $17 million in unvested shares from Tolstedt, according to a Bloomberg analysis of figures compiled from regulatory filings. “Rather than sanction the community banking chief executive, Wells Fargo celebrated her tenure with a $125 million retirement package”.
Federal regulators discovered employees, since 2011, were secretly creating millions of unauthorized bank and credit card accounts without ever telling their clients. Cash and stock she already owns – including about $51 million of shares amassed during her 27-year career and $36 million in previously vested stock options – aren’t eligible, according to the filings.
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Wells Fargo fell 1.5 percent to $45.44 at 1:12 p.m.in NY, on pace for its sixth straight daily decline.
