Elizabeth Warren DESTROYS Wells Fargo CEO For Unauthorized Accounts "YOU SHOULD RESIGN" 9/20/16

[Donkees]

Published on Sep 20, 2016
Elizabeth Warren DESTROYS Wells Fargo CEO On Anauthorized Accounts 9/20/16. Elizabeth Warren, D.-Mass., called on Wells Fargo CEO John Stumpf to step down on Tuesday in an intense examination of the CEO’s role in an unauthorized accounts scandal before the Senate Banking Committee. “You should resign,” Warren, a longtime champion of consumers, told the CEO during the hearing Warren also said Stumpf should give back millions of dollars of bonuses he received and be criminally investigated. She lashed out at the leader of the third-largest U.S. bank for firing low-level employees while allowing richly paid executives stay on the job. “It’s gutless leadership,” she said. In his opening remarks, Stumpf told a Senate panel Tuesday that he accepts “full responsibility” for unethical sales practices in the bank’s retail division, as he faced questions about allegations the bank’s employees secretly opened accounts over a five-year period to meet sales goals. In the latest example of a banker being taken to task on Capitol Hill, members of the Senate Banking Committee are pressing the CEO on when he learned about the wrongdoing, what the bank has done to stop the activity and whether he and and other executives will return some of their compensation.

Although the bank has said it began firing 5,300 employees over the activity in 2011, Stumpf said the existence of the fraudulent accounts was not brought to his attention until 2013 and didn’t reach the bank’s board until 2014.

The Senate Banking Committee scheduled the hearing to probe regulators’ claims the San Francisco-based bank opened more than 2 million deposit and credit card accounts that may not have been authorized by consumers. Earlier this month, Wells Fargo agreed to pay $185 million in government fines to resolve those allegations without admitting to or denying them.

Stumpf, 63, told the panel he was “deeply sorry” for selling customers unauthorized products.

“Wrongful sales practice behavior in our retail banking business ... runs counter to our vision of helping our customers succeed financially and it is not representative of Wells Fargo as an institution,” Stumpf said.

Stumpf said the bank recognizes now that “we should have done more sooner” to stop unethical behavior. The bank took steps to address such behavior over the years, “but we now know those steps were not enough,” he said.

“We did not get it right,” he said. The bank should have “gotten ridden of our incentive program,” he added later.

The hearing Tuesday had high attendance, with reporters having to book seats days in advance for seats in the venerable wood-paneled room. There were not protesters inside, as was the case in the financial crisis. Stumpf arrived early and took his seat with a bandaged right hand, which bank said he hurt playing with his grandkids.

The committee chairman opened the hearing by declaring that the bank violated customers’ trust.

“I’ve often said that banking is based on trust, and that trust was broken at Wells Fargo,” said Richard Shelby, an Alabama Republican.

[On CSPAN: Watch live stream of John Stumpf's testimony]

Also scheduled to testify Tuesday: Tom Curry, comptroller of the currency; Richard Cordray, director of the Consumer Financial Protection Bureau; and James Clark, chief deputy of the Los Angeles city attorney’s office. Wells Fargo agreed to the $185 million fine to settle claims brought by the two regulators and the city and county of Los Angeles.

The hearing comes as Wells Fargo seeks to repair damage done to its reputation following regulators’ descriptions of “widespread illegal” practices dating to 2011 as front-line employees in branches faced pressure to hit sales goals. In some cases, regulators said, Wells Fargo employees created fake email addresses to enroll unsuspecting consumers in online banking.

Banking industry officials say Wells Fargo, the third-largest U.S. bank by assets, has much riding on what happens Tuesday. In a report Monday, investment bank FBR & Co. called it a “critical week” for the bank, whose largest employment hub is in Charlotte.

“We are right before a critical election,” the report notes, “where the majority in the Senate is very much in play and no member wants to be perceived as siding with a ‘Wall Street bank’ over the average consumer.” DESCRIPTION BY By Deon Roberts [e-mail]