Elizabeth Warren, a Massachusetts Democrat and frequent critic of Wall Street, called for Stumpf and Wells Fargo to be criminally investigated and asserted Stumpf had shown “gutless leadership” during the long-running sales misconduct.
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The hearings are looking into a massive scam Wells Fargo pulled on two million of its clients involving bogus accounts opened without their permission or knowledge, and charging those clients service fees on those accounts.
She told Stumpf he should resign and “give back the money you took while the scam was going on”.
Senators hammered Stumpf on Tolstedt’s compensation, demanding he explain why the bank’s board of directors – which he presides over as chairman – hasn’t exercised its authority to take it back from her. Carrie Tolstedt, the former head of the retail banking business, announced in July that she would retire from the bank this year.
While the directors boast a wealth of corporate and government experience – with Blackberry CEO John Chen, Novatel CEO Susan Swenson, a former Federal Reserve governor and two ex-Cabinet secretaries – they also have an average tenure of 10 years, the longest of the boards of any of the six biggest USA banks, according to data analyzed by TheStreet.
Wells Fargo’s stock was down almost 2 percent in late-morning trading, versus a less than 1 percent rise in the KBW Bank Index, which tracks share performance of 24 large US lenders.
Carrie Tolstedt, the executive at Wells Fargo Bank who oversaw the unit that created almost 2 million fraudulent accounts without the knowledge or consent of their customers, will be retiring with a $125 million pay package. “I am deeply sorry that we have not lived up to our values in this way”.
“I am deeply sorry we failed to fulfil our responsibility”, Stumpf said in a prepared statement.
The Minnesota Vikings will allow Wells Fargo to keep certain signs near the team’s new stadium in downtown Minneapolis.
The fraudulent practices of Wells Fargo employees were the result of “unrealistic sales goals” which include selling eight financial products per customer.
Committee Chairman Sen. Richard Shelby, R-Ala., says there are many unanswered questions, including when the misconduct started, how much top executives knew about it and why did federal regulators wait until this year to crack down. “Until then, it will be business as usual, and at giant banks like Wells Fargo, that seems to mean cheating as many customers, investors and employees as they possibly can”.
Questioned again by Warren, Stumpf said the bank had not considered firing Tolstedt.
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He testifies Tuesday before the Senate Banking Committee. Get twice-daily updates on what the St. Louis business community is talking about.
