That letter seeks transcribed interviews with CFO John Shrewsberry, COO and president Timothy Sloan, chief risk officer Michael Loughlin and Carrie Tolstedt, the executive who oversaw the bank unit responsible for fake accounts, and who departed the bank with a pay package worth almost $100 million.
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Now the bank has been ordered by regulators to pay a fine of $185 million.
Responding to demands from Democrats, the House Financial Services Committee said it launched an investigation into “alleged fraud” at the bank and would hold a hearing soon.
“Wells Fargo’s resulting market dominance has come at a significant price to the general public, because it has been achieved in large part through an ambitious and strictly enforced sales quota system”, said the complaint. “We do acknowledge the cross-selling scandal can remain an overhang for some time”.
Wells Fargo’s troubles in Washington are deepening. The stock has dropped 7.5% compared with a almost 2.4% decline for the Dow Jones US Banks Index.
A House of Representatives panel is also starting an investigation of the bank amid the growing unauthorized accounts scandal.
More than 2 million fraudulent accounts, including debit and credit cards, were opened in customers’ names without their knowledge.
Tolstedt, 56, was head of community banking until July, when the bank announced she was retiring and would be replaced by retail brokerage head Mary Mack.
“Ever since the economic crisis, consumers have been moving to credit unions because they trust the values of credit unions”, Andrea Molnau, communications director of the Minnesota Credit Union Network, said in a statement.
The Senate Banking Committee, chaired by Republican Richard Shelby, plans to hold a hearing on the matter on Tuesday, where Stumpf will testify.
California-based Wells Fargo says it has refunded to customers $2.6 million in fees charged for products that were sold without authorization. Of those, about 14,000 accounts generated fees worth more than $400,000. However, the bank was quick to point out that this figure only represented about 1 percent of its workforce, and said the terminations “reflect our commitment to monitoring and addressing any inappropriate sales conduct”.
Wells Fargo has fired 5,300 employees for improper sales tactics since 2011.
The employees were opening the accounts in order to “satisfy sales goals and earn financial rewards under the bank’s incentive-compensation program”, according to the Office of the Los Angeles City Attorney.
Wells Fargo, the country’s third-largest bank by assets, has said it has fired 5,300 people over the matter and would eliminate sales goals in its retail banking on January 1, 2017.
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But beyond the regulatory issues, ICBA’s Fine isn’t mincing words when it comes to Wells Fargo.
