The regulator has the authority to oversee executive hiring for troubled banks – but hasn’t exercised it for Wells Fargo
Sen. Elizabeth Warren has questioned a federal regulator’s refusal to oversee Wells Fargo’s CEO hiring process.
The bank is hunting for a new boss after announcing that embattled CEO Tim Sloan would step down in June. Sloan, who replaced CEO John Stumpf in 2016 after the bank’s fake-accounts scandal broke, faced withering criticism as more of the bank’s misdeeds came to light over the next two years.
Now that Wells Fargo is hunting for a new CEO, Warren (D-Mass.) – one of the bank’s fiercest critics – wants to know why the Office of the Comptroller of the Currency is not using its statutory authority to oversee the bank’s hiring process.
Federal law allows the OCC to disapprove of a candidate for a senior position at a “troubled bank” – any bank operating under a consent order. Wels Fargo is still operating under at least three from the OCC, as well as other orders from other regulators.
“In each of the OCC’s recent enforcement cases against Wells Fargo, the OCC waived its authority to object to new executives, despite the obvious failure of Wells Fargo’s leadership, the bank’s inability to manage risk, and its failure to meet the requirements of three separate consent orders issued,” Warren’s office said in a news release. “The exemption from these requirements in the 2015 and 2016 consent orders allowed Wells Fargo to appoint Tim Sloan as CEO in October 2016, without OCC review or approval.”
Warren’s office said that had the OCC exercised its authority to review Sloan’s appointment, it might have found that his tenure as a Wells Fargo executive prior to being named CEO – during which many of the bank’s misdeeds were in full swing – disqualified him from leading the bank.
“Federal regulators must hold Wells Fargo accountable for its misdeeds and ensure that the bank ends its streak of unlawful behavior,” Warren said. “The OCC’s repeated willingness to waive its authority over Wells Fargo’s hiring process calls into question the agency’s commitment to using all of the tools in its toolbox to ensure that Wells Fargo corrects its deficiencies.”
