Wells Fargo CEO John Stumpf, seen here in 2009, resigned from the Federal Reserve Bank of San Francisco’s advisory council.
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The Federal Advisory Council has 12 banking industry representatives and ordinarily meets four times a year.
The request comes after Wells Fargo earlier this month was ordered to pay $190 million to settle civil charges alleging its employees had set up about 2 million accounts and credit cards in customers’ names that may have not been authorized.
A Wells Fargo spokeswoman didn’t have an immediate comment. The pension funds the group represents hold about 12 million shares of Wells Fargo, according to CtW spokesman Matthew Painter.
The federal regulators had knowledge of this conduct for three years and failed to stop it.
Wells Fargo, one of the largest six USA banks and one that came away from the 2008 financial crisis relatively untarnished, earlier this month was fined $185 million by the nation’s consumer protection agency for fraudulently opening over two million unauthorized consumer credit card and savings accounts.
New York City Comptroller Scott Stringer, whose office advises on $163 billion in municipal pension funds, including nearly $500 million in Wells Fargo stock, also urged the bank to claw back pay from senior managers, including Tolstedt and Stumpf. Critics contend that bank employees set up the accounts to boost their bonuses and help drive the perception that each customer had numerous accounts with the institution, a situation they contend ultimately benefited Wells Fargo by encouraging positive analyst reports that drove up the bank’s stock price.
Chief executive John Stumpf stepped down from his post on the panel, calling the move a “personal decision”. He promised to assist affected customers.
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Government investigations have grown from the one conducted by the U.S. Consumer Financial Protection Bureau, for which we took a $185 million write-down and fired 5,300 workers, to a larger group of investigations that may include some criminal investigations. The bank says it has already refunded to customers $2.6 million in fees charged for products that were sold without authorization. Stumpf’s second term would have ended at the end of this year. Carrie Tolstedt, the former head of the retail banking business, announced in July that she would retire from the bank this year. The targets were high even in small towns.
