The video clip below is a must watch to know how John Stumpf, Wells Fargo CEO came under fire for the bank’s alleged fraud. Instead, evidently, your definition of “accountable” is to push the blame on your low level employees that don’t have a fancy PR firm to defend themselves. Pat Toomey (R-Pa.).
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Wells Fargo & Co’s WFC.N chief executive, John Stumpf, will tell USA senators on Tuesday that he is “deeply sorry” for selling customers unauthorized bank accounts and credit cards and that he would take “full responsibility” for the unethical activity, the New York Times reported on Monday.
Stumpf acknowledged Tuesday that steps the bank took to crack down on bad behavior were not enough.
WASHINGTON (AP) The CEO of Wells Fargo faced calls for his resignation Tuesday from harshly critical senators over allegations that bank employees opened millions of unauthorized accounts to meet sales quotas.
“I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public”, Stumpf told the committee, his right hand and wrist bandaged after he hurt his hand playing with his grandchildren. Read our story from the time, or see how the scandal affects customers.
“But you squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket”.
Some particularly aggressive questioning came from Democrat Elizabeth Warren of MA, who said in so many words that Stumpf should resign, should give back some of his compensation, and should be criminally investigated by both the Justice Department and by the Securities and Exchange Commission.
The Massachusetts Democrat, one of the fiercest critics of Wall Street, also advocated for a criminal investigation by the Justice Department and a civil probe by securities regulators.
“The fraudulent conduct occurred on a massive scale”, Richard Cordray, director of the Consumer Financial Protection Bureau, said in his opening remarks explaining why Wells Fargo was hit with an agency-record $100 million fine on September 8. A late fee on an account a customer did not know about or an unauthorized credit card could also make it more hard or expensive for someone to get a mortgage, they said. Debit cards were issued and activated, as well as PINs created, without telling customers.
“You should resign”, she said. Clinton said in a letter to Wells Fargo customers Tuesday that the bank’s conduct was “outrageous.” Sen. The committee is independent, Stumpf said, and “I don’t want to prejudice their activity”. It identified aggressive cross-selling, the practice of convincing customers to take out multiple financial products, as a potential problem. The practices apparently began several years earlier, as Stumpf suggested under questioning. Stumpf told the committee the bank’s board is exploring a so-called “clawback” provision that would force Tolstedt to give up some of her windfall. Brown said she is set to retire at the end of this year with a package worth as much as $125 million.
A report by investment bank FBR & Co. said Stumpf should agree to not take a bonus this year or to work for just $1.
Joe Donnelly, an Indiana Democrat, was among lawmakers who criticized the bank for firing low-level employees but no senior executives.
“I’m not on the human resources committee”, Stumpf said.
“Banks and fish rot from the head down”, said William K. Black, an economics and law professor at the University of Missouri-Kansas City and a former bank regulator of note during the savings and loan crisis of the 1980s, labeling the settlement with Wells Fargo “disgustingly weak” given management intransigence. Miller said Wells increased sales goals in branches by about 35 percent after its 2008 purchase of Charlotte-based Wachovia, where she also had worked.
Lawmakers further disputed the notion that the 5,300 employees fired over the case were acting independently.
Do you trust the Senate hearing will bring about changes in the banking industry or will it continue to do business as usual? “If you pay people on the basis of how many products they sell, that’s what they will do, whether it is in the interests of the customer or not”, Mr.
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