After his public shaming at the hands of Elizabeth Warren this week, Wells Fargo CEO John Stumpf is stepping down – no, not as chief executive (despite Warren’s wishes).
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So began Elizabeth Warren’s almost nine-minute grilling of Wells Fargo CEO John Stumpf during a his testimony in front of the Senate Banking Committee Tuesday.
In some cases Wells Fargo employees used bogus email accounts and PIN numbers to set up the accounts, according to the Consumer Financial Protection Bureau, which levied a $100 million penalty on the bank earlier this month.
“I do want to make very clear that there was no orchestrated effort, or scheme as some have called it, by the company”, he said.
Warren and four other Democratic senators sent a letter Thursday to the San Francisco Fed asking officials not to reappoint Stumpf, who was on his second term.
“Wells Fargo is not the exception (with its) absurd sales culture”, said one former manager of two large regional banks.
Another six former Wells Fargo employees told CNNMoney they witnessed similar behavior at Wells Fargo – even though the company has a policy in place that is supposed to prevent retaliation against whistleblowers.
Warren then asked, “You are going to have no recommendation at all?”
Change pay structure so that the bank’s and the customers’ interests are aligned.
To his credit, Wells Fargo Chairman and CEO John Stumpf personally discussed with me his willingness to take full responsibility, and to take steps to ensure that this conduct never happens again.
If the big banks and their lobbyists think they’ll go quietly back into the business of wretched excess and greed that helped bring the nation to the financial brink in 2008, Sen. And now, Wells Fargo itself has been made to pay, to the tune of $185 million in fines as part of a settlement with federal authorities and those in its home state, California, plus restitution for its customers. “It looks like there’s been a awful breakdown of checks and balances at Wells Fargo”. Bankers in Minnesota, Pennsylvania and elsewhere described a sales culture where cheating the system was par the course. Stumpf said he would “take it under advisement”.
That was mild, compared with what else she told Stumpf: “This is about accountability”.
Much of Stumpf’s $200 million haul will not come from a golden parachute – the notorious compensation clauses that allow CEOs to collect millions of dollars when they are let go or after selling their company.
Bank of America and SunTrust declined to comment on the concerns raised by their workers.
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A Wells Fargo spokeswoman said the bank prides itself on “creating a positive environment for our team members, including market competitive compensation, career-development opportunities, a broad array of benefits, and a strong offering of work-life programs”. But he added, “We should have done more sooner”.
