Wells Fargo’s chairman and chief executive officer John Stumpf subsequently reached out to bank customers on Tuesday.
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Hensarling said the committee will consider further actions, including subpoenas, as warranted.
“Rather than acknowledging a management breakdown, CEO John Stumpf blamed a minority of bad employees”, the resolution said. Stumpf also told CNBC’s Jim Cramer “the best thing I can do right now is lead this company, and lead this company forward”.
Elizabeth Warren is slamming Wells Fargo ahead of a Congressional hearing around the recent scandal at the bank involving millions of potentially fake bank accounts.
A Wells Fargo spokeswoman did not immediately respond to a request for comment.
Carrie Tolstedt was head of the community banking division of Wells Fargo for over nine years. Tolstedt, a 27-year company veteran, and one of the most powerful women in banking, earned $20 million in bonuses between 2010 and 2015, according to a letter sent to the company by five Senate Democrats. Multiple reports suggest her severance package is much larger.
The announcement of the House investigation comes a little over a week after the alleged misconduct was outlined by authorities. That, coupled with the bank’s own internal sales targets and compensation incentives, led to employees padding their sales figures by opening accounts in the name of existing customers and drawing funds from their existing accounts without their consent or knowledge in order to fund them. She is described as the “chief sandbagger” in the Utah lawsuit, referring to what it describes as Wells Fargo’s practice of failing to open customer accounts in a timely fashion, instead stockpiling them until the next sales reporting period.
In all, more than two million unauthorized accounts may have been opened.
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Democratic lawmakers with the House Committee said they would be asking questions in detail about the impact of Wells Fargo’s conduct on customers and investors in its shares, particularly pension funds. Of those, about 14,000 accounts generated fees worth more than $400,000. It will also pay an extra $35 million to the Office of the Comptroller of the Currency and $50 million to the City and County of Los Angeles, according to an CFPB statement. “They don’t have to participate if there is willful negligence”, he said. Employees blame the bank’s working culture, and the CEO blames the employees. The estimate by Mark Reilly, a managing director at human-resources consultancy Overture Group LLC, reflects the value of stock and stock options as well retirement benefits for the departing Wells Fargo executive.
