Sen. Elizabeth Warren on Thursday said Wells Fargo CEO John Stumpf “needs to be held accountable” for behavior that led to the bank’s $185 million fine over its sales practices.
Warren, a Massachusetts Democrat and prominent critic of Wall Street, said in a Bloomberg TV interview that she’s troubled by regulators’ claims the bank’s employees opened millions of accounts that may not have been authorized by customers to meet sales goals.
“Let’s have a little personal responsibility here,” Warren said. “Either he didn’t know, in which case there was a massive, long-term fraud on his watch. ... Or it’s the case that he actually did know what was going on.”
“Either way, he needs to be held accountable for this, as does the rest of his senior management,” she said.
A Wells Fargo spokesman declined to comment.
Warren serves on the Senate Banking Committee, which on Tuesday is scheduled to hold hearings on the Wells Fargo findings. Warren’s remarks offer a taste of what Stumpf, who is scheduled to testify, might hear from lawmakers during the hearing.
Wells Fargo has apologized for the phony accounts, but the bank did not admit or deny allegations in its government settlements announced last week. On Tuesday, the bank announced plans to drop sales goals for retail bankers who sit in branches and call centers. Wells Fargo said that move is designed to make certain its customers have “full confidence” the bankers are focused on their best interests.
Since the settlement was announced, Wells Fargo has also faced calls to “claw back” compensation awarded to the retiring executive who ran the bank unit where the alleged abuses took place. That executive, San Francisco-based Carrie Tolstedt, in 2015 made $9.1 million in salary, bonus and stock awards, down from $9.5 million in 2014.
Warren criticized the compensation Tolstedt was awarded for presiding over a unit that “systematically broke the law and cheated customers.”
“The idea that she can be in charge of this division, get yearly bonuses based on how much fraud was occurring in her division ... this tells me that something is badly broken at that bank,” Warren said.
“It tells me that notwithstanding everything that we talked about following the crash of 2008, that the culture at this giant bank is still about profits, even if it means cheating people and breaking the law.”
On Wednesday, the nonprofit group Americans for Financial Reform also called for Wells Fargo to take back some of Tolstedt’s compensation, as well as bonuses awarded to Stumpf while the alleged abuses were taking place.
Stumpf received $2.8 million in salary, a $4 million bonus and $12.5 million in performance-based stock awards in 2015, the same amounts he received for 2014. Americans for Financial Reform said Stumpf’s bonuses should be used to pay the $185 million fine and the $5 million in customer remediation the bank also agreed to provide under its settlement.