The Massachusetts senator believes that 12 members of the embattled bank’s board should be removed over the fake-accounts scandal
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Sen. Elizabeth Warren wants a dozen of Wells Fargo’s board members to be booted from the company as punishment for the bank’s massive fake-accounts scandal last year.
The bank has already paid $150 million in fines to regulators, agreed to pay at least $142 million to affected consumers, and ousted its CEO over the scandal. But 12 of the bank’s 15 board members served during the period, from 2011 to 2015, when Wells Fargo employees were opening millions of unauthorized accounts.
Warren, a Massachusetts Democrat, believes those 12 need to go, according to a letter she sent Monday to the Federal Reserve Board of Governors. In the letter, Warren asked the Fed to invoke its authority to remove the 12 Wells Fargo board members.
“The fake accounts scandal cost Wells Fargo customers millions of dollars in unauthorized fees and damaged many of their credit scores,” Warren wrote. “The scandal also revealed severe problems with the bank’s risk management practices – problems that justify the Federal Reserve’s removal of all responsible Board members.”
Warren cited a report on an investigation into the bank’s practices by law firm Shearman & Sterling, which found that the board’s “failure to establish adequate risk management practices and uncover these improper retail practices” demonstrated a “continuing disregard for the bank’s soundness.
“By any measure, a bank’s risk management practices cannot be adequate if they permitted more than 5,000 employees to open more than two million sham accounts in a four-year span,” Warren wrote.
Warren criticized the Fed for not taking action against Wells Fargo in the wake of the scandal while other regulatory authorities – like the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency – levied heavy penalties.
“The CFPB and the OCC have acted within their jurisdiction in response to the Wells Fargo scandal,” she wrote. “It is time for the Federal Reserve to act as well.”
Related stories:
Wells Fargo agrees to fully compensate all victims of fake-account scandal
Wells Fargo accused of making unauthorized changes to mortgages
The bank has already paid $150 million in fines to regulators, agreed to pay at least $142 million to affected consumers, and ousted its CEO over the scandal. But 12 of the bank’s 15 board members served during the period, from 2011 to 2015, when Wells Fargo employees were opening millions of unauthorized accounts.
Warren, a Massachusetts Democrat, believes those 12 need to go, according to a letter she sent Monday to the Federal Reserve Board of Governors. In the letter, Warren asked the Fed to invoke its authority to remove the 12 Wells Fargo board members.
“The fake accounts scandal cost Wells Fargo customers millions of dollars in unauthorized fees and damaged many of their credit scores,” Warren wrote. “The scandal also revealed severe problems with the bank’s risk management practices – problems that justify the Federal Reserve’s removal of all responsible Board members.”
Warren cited a report on an investigation into the bank’s practices by law firm Shearman & Sterling, which found that the board’s “failure to establish adequate risk management practices and uncover these improper retail practices” demonstrated a “continuing disregard for the bank’s soundness.
“By any measure, a bank’s risk management practices cannot be adequate if they permitted more than 5,000 employees to open more than two million sham accounts in a four-year span,” Warren wrote.
Warren criticized the Fed for not taking action against Wells Fargo in the wake of the scandal while other regulatory authorities – like the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency – levied heavy penalties.
“The CFPB and the OCC have acted within their jurisdiction in response to the Wells Fargo scandal,” she wrote. “It is time for the Federal Reserve to act as well.”
Related stories:
Wells Fargo agrees to fully compensate all victims of fake-account scandal
Wells Fargo accused of making unauthorized changes to mortgages
