John Stumpf told the Senate Banking Committee on Tuesday the bank will contact all deposit customers in the US, including those who already had fees refunded, to invite them to review their accounts with their banker.
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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 Wells Fargo board is actively engaged in this issue”, Stumpf said.
Senator Sherrod Brown, an Ohio Democrat, told the CEO that the bank’s response has been inadequate, and said, for example, that Wells Fargo hasn’t yet calculated what effect lower credit scores resulting from the fake accounts might have had on customers’ finances. Carrie Tolstedt, who oversaw retail banking, has announced plans to retire at year’s end after 27 years at the bank. “Senior management downplayed the importance of the problem and continued to award performance bonuses to those involved as recently as two months ago”.
In his testimony Strumpf said the bank did not inform the SEC about the matter as “it was not a material event”.
Wells Fargo has always been known for its aggressive sales goals, but the details and the $185 million fine that regulators imposed last week have singed the consumer banking giant’s reputation as a well-run, tightly managed company removed from the reckless conduct on Wall Street that stoked the financial crisis. CFPB Director Richard Cordray also was scheduled to speak.
“I’m not on the human resources committee”, Stumpf said. The firm started terminating roughly 1,000 of its 100,000 retail banking employees annually for violations.
Wells Fargo has in place executive compensation clawback provisions that the board could implement. By 2012, the lender began lowering some sales goals for compensation.
MA U.S. Sen. Elizabeth Warren blasted the head of Wells Fargo and demanded both his resignation and a criminal investigation, even as records indicate the anti-Wall Street crusader appears to hold investments in the embattled bank herself.
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The CEO of embattled Wells Fargo has appeared to testify before the Senate Banking Committee on the scandal over allegations that employees opened millions of unauthorized accounts to meet aggressive sales targets. But Sen. Elizabeth Warren (D., Mass.) said that it isn’t as if Mr. Stumpf is separate from the board-he is the board’s chairman, though he doesn’t serve on the human resources committee. It later said it plans to eliminate the sales targets by January 1. Tolstedt as well as other corporate officers will be called for transcribed interviews, the lawmaker said.
