“Since this massive, years-long scam came to light, you have said repeatedly, ‘I am accountable.’ But what have you actually done to hold yourself accountable?” the top Wall Street watchdog and MA senator asked during the U.S. Senate Banking Committee hearing on the bank’s opening of millions of unauthorized accounts.
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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.
“What is particularly disappointing to us is that we and investors have long held Wells Fargo management in very high regard – they have been smart contrarian thinkers and made thoughtful decisions”, he added.
Warren took Stumpf to task regarding Wells Fargo’s admission that employees created millions of fake accounts to meet sales goals. The bank announced in July that Ms. Tolstedt, the head of Wells Fargo’s retail bank, would retire at the age of 56.
The scandal also renewed debate over whether USA banks are “too big to fail” and need closer government oversight to prevent a massive collapse. In an exchange that has since gone viral, Warren told the Wells Fargo CEO that he should resign after the company’s most recent banking scandal, unleashing an eviscerating diatribe that left the man visibly stunned. Instead, evidently, your definition of “accountable” is to push the blame on your low level employees that don’t have a fancy PR firm to defend themselves. But Carrie Tolstedt, the executive who ran the unit responsible for opening up the phony accounts, was awarded a $124.6 million payday.
Stumpf told the Senate Banking Committee 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. You haven’t fired a single senior executive. “No, cross-selling is all about pumping up Wells’s stock price, isn’t it?”
Responding to those questions, Stumpf said he lacked the appropriate expertise, declaring himself at various times not to be a lawyer, a compensation expert or a credit consultant. But Stumpf started to redirect the blame saying the fake accounts were opened by 1 percent of Wells Fargo personnel and- He was interrupted again by the Senator.
The senators challenged assertions that Stumpf and other Wells Fargo senior executives didn’t become aware of the problems until 2013 – when the sales misconduct was reported by The Los Angeles Times.
“You’re not wiling to say publicly … that some of her compensation … should be clawed back?” asked Sen.
“You haven’t resigned”, Warren said.
Stumpf was called to the hearing, which lasted almost five hours, after the San Francisco-based bank reached a $185-million settlement with federal regulators and the Los Angeles city attorney’s office on September 8.
Warren also accused Stumpf of “gutless leadership”, according to CNBC. “How do you fire someone making 15 bucks and not the person” over the unit?
Sen. Elizabeth Warren was having none of it.
“Here’s what really gets me about this”, Warren continued. “If one of your tells took a handful of 20 dollar bills out of the cash drawer, they’d probably be looking at criminal charges for theft”.
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The most anticipated face-off of Tuesday’s Senate Banking Committee hearing did not disappoint: Democratic firebrand Sen.
