Stumpf will face a hearing from the Senate Banking Committee over the scandal, after his bank was taken to court by customers for the practices. The New York Times reported that at least some of the videos were produced by former Wells employees-who note that workers in the trenches we’re exactly raking in big bucks.
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She said the stock could suffer through more volatility in the near term, particularly around Chief Executive John Stumpf’s testimony before Congress on Tuesday, but she doesn’t believe the bank’s troubles with regulators will put the dividend at risk.
Wells Fargo’s $185 million penalty for the fake accounts scandal is puny when compared to the tens of billions paid by its rival banks, such as JPMorgan Chase, Citi and Bank of America for financial crisis-era misdeeds.
“I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members and to the American public”, Stumpf said in the prepared remarks.
White-collar criminologist William Black told the Real News that the hard work exposing the bank’s practices was “done by the customers, by the employees and by Los Angeles County, that bought the suit in 2015, building on these whistleblowers”.
He says, “If there ever were a textbook case of consumers needing protection, this was it”. The House Financial Services Committee has announced that it plans to conduct an investigation into Wells Fargo’s sales culture, and to have Stumpf testify later this month. Bob Corker of Tennessee said it would be “malpractice” if the bank doesn’t institute compensation clawbacks.
A Wells Fargo spokeswoman said the bank made a decision to leave the roundtable because “other trade associations are more closely aligned to our business model and our footprint, which is concentrated in the United States”.
Tolstedt and her planned departure from the bank with well over $100 million in stock and options has been the focus of ire by Democrats and consumer advocates.
John Stumpf, the long-time chief executive of Wells Fargo who built a wholesome image of himself on Wall Street, will face the biggest test of his career on Tuesday when he gets grilled by United States senators over the creation of millions of sham bank accounts and credit cards that nickel-and-dimed his customers.
Stumpf said the fake accounts cost the bank both money and satisfied customers.
The bank sales staff had a goal of getting each customer to have eight different accounts with the bank – up from the prevailing average of six.
She worked for Wells Fargo from 2009 to 2010 at a division that sold additional products like credit cards to already existing customers. It later said it plans to eliminate the sales targets by January 1.
Wells Fargo’s CEO has said the bad behavior was isolated to only a handful of employees and managers, even though Wells acknowledged that it had fired more than 5,000 employees for misconduct.
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“The OCC may take formal enforcement actions against institution-affiliated parties, including directors, officers, and employees, who violate any law or regulation, engage in unsafe or unsound practices, or breach fiduciary duty”, Mr Curry told a hearing of the senate committee.
