September 21, 2016 1:02 AM
Wells Fargo CEO blasted
Senators show outrage at bank's alleged practices
MARCY GORDON and KEN SWEET | Associated Press
WASHINGTON – The CEO of Wells Fargo faced accusations of fraud and calls for his resignation Tuesday from harshly critical senators at a hearing over allegations that bank employees opened millions of accounts customers didn’t know about to meet sales quotas.
Members of the Senate Banking Committee showed bipartisan outrage over the conduct, unsatisfied by Chief Executive John Stumpf’s show of contrition.
Sen. Elizabeth Warren flatly told Stumpf he should step down.
“You squeezed your employees to the breaking point so they would cheat customers,” she said. “You should resign. You should give back the money you took while the scam was going on.”
The Massachusetts Democrat also advocated for a criminal investigation by the Justice Department and securities regulators.
Stumpf, a 34-year veteran of Wells Fargo and CEO since 2007, earned $19.3 million last year. The bank does have in place provisions its board could implement to claim back executive compensation.
Wells Fargo sales employees, trying to meet targets that called for every customer have eight products with the bank, opened more than 2 million bank and credit card accounts, regulators said last week in levying a $185 million fine.
Money in customers’ accounts was said to have been moved to these new accounts without their permission. Debit cards were issued and activated, as well as PINs created, without telling customers. In some cases, bank employees even created fake email addresses to sign up customers for online banking services, the regulators said.
The senators also 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. The practices apparently began at least in 2009.
Carrie Tolstedt, the former head of the retail banking business, announced in July that she would retire from the bank this year. She is expected to leave with up to $125 million in salary, stock options and other compensation.
Sen. Bob Corker, R- Tenn., said it would be “malpractice” if the bank doesn’t institute the compensation clawbacks, and Stumpf said the board “has the tools to hold senior leadership accountable,” including himself and Tolstedt.