Elizabeth Warren, D-Mass., demanded that Stumpf explain why he had not offered to give up any of his compensation – he made $19 million a year ago – or resigned in the wake of the scandal.
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He also said that top officials at the bank had been fired over the scandal. She grilled him during a hearing of the U.S. Senate Committee for Banking, Housing, & Urban Affairs.
Wells Fargo also said it will now alert every single deposit customer to review their accounts and shut down ones they don’t want or recognize.
“Here’s what really gets me about this, Mr. Stumpf”. Those who had fake accounts opened under their name could be marred because of fraudulent credit card accounts. All three such funds on TIAA’s website that match the description list Wells Fargo as one of their top holdings at almost 1 percent of net assets.
The CEO of Wells Fargo says he is “deeply sorry” as he speaks before a congressional panel about allegations that employees opened millions of unauthorized accounts to meet aggressive sales targets.
Last week, it became known that federal authorities and the city of Los Angeles had levied a $185 million fine on the bank to settle the case, along with $5 million in compensation provided to customers affected by the commissions and charges that originated when accounts they had never requested were opened by Wells Fargo employees starting in 2011.
Stumpf declined to definitely answer how Wells Fargo would handle binding arbitration clauses on unauthorized accounts. “No, cross selling is all about pumping up Wells’s stock price, isn’t it?” But in a statement, it said it is “prepared to provide the committee with information and to discuss steps we have taken to affirm our commitment to customers”.
“I disagree with the fact this is a massive fraud”, he added. Other big banks average fewer than three accounts per customer.
Stumpf told lawmakers that he learned of the misbehavior in 2013, but acknowledged the bank did not act quickly enough to remedy the problem.
In a hearing with the Senate Banking Committee, Wells Fargo Chief Executive John Stumpf was asked repeatedly about Ms. Tolstedt’s summer retirement announcement and the tens of millions of dollars she will receive in compensation for her 27 years of service there.
US Senator Elizabeth Warren, Democrat of MA, holds up copies of Wells Fargo earnings call transcripts as she questions John Stumpf, chairman and CEO of Wells Fargo, as he testifies about the unauthorized opening of accounts by Wells Fargo during a Senate Banking, Housing and Urban Affairs Committee hearing on Capitol Hill in Washington, DC, September 20, 2016.
Warren went on to criticise Wall Street as a whole, and used Wells Fargo as an example of how employees at lower levels are held accountable for their actions, but top executives often escape prosecution. Elizabeth Warren (D-Mass.) responded. “These are calls where you personally made your pitch to investors and analysts about why Wells Fargo is a great investment, and in all 12 of these calls, you personally cited Wells Fargo’s success at cross-selling retail accounts as one of the main reasons to buy more stock in the company”.
In response to questioning from Sen. Warren took him to task for his actions.
Sen. Warren wasn’t the only senator who voiced anger and frustration over the Wells Fargo scandal (although she was certainly the most fired up).
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The same is true of two other mutual funds in Warren’s disclosures: TIAA-CREF Global Equities (where she holds between $250,001 and $500,000) and CREF Equity Index Account (where she holds between $50,001 and $100,000). She said, “It’s gutless leadership”.
