Sen. Elizabeth Warren grills Wells Fargo CEO: ‘You should be fired’
It’s not your typical homework assignment: A group of nuns upset about the spate of scandals at Wells Fargo just got the bank to agree to write up how it failed to prevent the problems.
This week, the nuns and other Wells Fargo investors announced the bank had bowed to their demands for the report, whose findings are expected to detail the root causes of the scandals, including at the board level.
“We are encouraged that they are finally agreeing to take this first step towards what we hope will be authentic reform,” Sister Nora Nash, of the Sisters of St. Francis of Philadelphia, said in a statement.
News of the report comes as Wells Fargo continues to deal with fresh scandals as well as the revelations from nearly two years ago, when it was learned that employees may have created millions of accounts without customer knowledge to meet aggressive sale quotas.
Nash, who helped lead the talks with Wells Fargo, noted that the investors have wanted Wells Fargo to explain its business practices since 2014, when the bank came in last in a survey on risk management, responsible lending and other metrics.
“With each new scandal and penalty as a result of aggressive cross-selling, car loan insurance issues, and mortgage fraud, we tried to impress upon management the need for a comprehensive review that will lead to systemic change,” Nash said.
The investors had been prepared to present a shareholder proposal calling for the report at the bank’s annual shareholders meeting next month. That proposal is being withdrawn now that Wells Fargo has agreed to produce the review by the end of the year, the investors said.
Wells Fargo, whose largest employee hub is in Charlotte, said in a statement that it will publish the “business standards” report on its website.
“We greatly value input from our shareholders and other stakeholders,” the San Francisco-based bank said.
The Sisters of St. Francis and other members of the New York-based Interfaith Center on Corporate Responsibility were involved in the push for the report. The center is a coalition of institutional investors that presses companies to adopt practices it deems beneficial to society and the environment, such as curbing greenhouse gas emissions.
The state treasurers of Rhode Island and Connecticut had also called for the Wells Fargo report.
In a statement, Rhode Island Treasurer Seth Magaziner said that by producing the report, Wells Fargo is taking incremental steps toward reforming itself and re-establishing trust.
“Investors and customers deserve information on the culture at Wells Fargo which allowed systemic fraud to occur over years, and what the bank is doing to ensure ethical behavior throughout its lines of business,” Magaziner said.
Some investors have remained frustrated as Wells Fargo continues to stumble.
Just last week, Wells Fargo said federal authorities are looking into practices in a different arm of the company: its wealth and investment management business. Wells said the bank’s board is reviewing practices in that division, including whether there have been inappropriate referrals or customer recommendations.
It wasn’t the only disclosure from Wells last week. The bank also said it’s found instances of incorrect fees being applied to assets and accounts in its investment and fiduciary services business, which is part of its wealth management operation.