Senators focused on the cross-selling program by Wells Fargo that Stumpf had previously told investors was one of the cores of the bank’s business. Another practice called “stagecoaching”, had Wells Fargo bankers stationed behind tellers while customers came in for routine transactions, looking for opportunities to sell.
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Wells Fargo’s embattled CEO is resigning his position on the Federal Reserve’s advisory council amid a scandal over millions of accounts allegedly opened by the bank without customers’ permission.
Bove said he still believes Stumpf will make it to retirement, but acknowledged: “His performance” before the Senate Banking Committee this week “was abysmal”.
NEW YORK (CNNMoney) – Elizabeth Warren isn’t through with Wells Fargo.
Sherrod Brown, the senior Democrat on the senate panel, blasted Wells Fargo for exploiting customers and the bank’s slow response to control the abuse. Employees are not guilt free because their boss pressures them to commit a crime.
Wells Fargo responded by firing 5,500 employees directly related to the scandal and said it would end its current sales quotas.
The total cost to customers of this chicanery at the nation’s largest retail bank was about $2.4 million in unauthorized fees between May 2011 and July 2015. Tolstedt, who government filings say is in her mid-50s, was the head of Wells Fargo’s division – which oversees the banks most consumers are familiar with – until her retirement was announced in July.
The House of Representative’s Financial Services Committee opened an investigation into the bank’s alleged misconduct as well as “the role of Washington regulators in monitoring and investigating” the alleged misconduct.
“The Wells Fargo board is actively engaged in this issue”, Stumpf, 63, said in his prepared remarks.
“I was stunned when I learned about the breadth and duration of this fraud”, the OH lawmaker said in his opening remarks.
Under fire, Stumpf said he has told his managers to do “whatever it takes” to make customers whole, refunding fees or compensating them for damage to their credit ratings.
The CEO said on Tuesday he is “deeply sorry” for conduct that “failed to fulfill our responsibilities to our customers, our team members and the American public”. “Instead, evidently, your definition of accountable is to push the blame to your low-level employees who don’t have the money for a fancy PR firm to defend themselves”.
Senators Joe Donnelly and Tester both pointed out that this could result in lasting financial hardships, especially for customers who need a good credit history to, for example, take out a mortgage.
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Will Wells Fargo be further prosecuted for this?
