In a Senate Banking Committee Hearing today, Senator Elizabeth Warren (D-MA) called on Wells Fargo CEO John Stump to quit his job.
The hearing was called in response to the discovery that Wells Fargo created 2 million accounts that customers never requested, and then charged their clients fees on these scam accounts.
If this weren’t enough, the executive in charge of the division where this fraud occurred it retiring with almost $125 million in compensation.
She also asked Stumpf if “cross selling,” or pushing existing customers to open more accounts, was all about boosting Wells Fargo’s stock price. Stumpf said it wasn’t, but when Senator Warren read his own words back to him, and submitted to the record transcripts of twelve calls with invesors where Stumpf bragged about how cross-selling was boosting the bank:
Warren: Cross selling pumps up Wells’ stock price, right? Stumpf: No it’s about deepening relationships Warren: No? HERE ARE THE TRANSCRIPTS pic.twitter.com/PkuIjnShaW
Finally, she called Stumpf’s leadership “gutless.“
Warren wasn’t the only Senator to slam Stumpf. Senator Sherrod Brown pointed out that the bank previously faced THIRTY NINE enforcement actions:
“Over the past 10 years, your bank has had approximately 39 enforcement actions, just a few of which have come up today. Many were related to failure to serve or abusive conduct towards customers and investors. You talk much about Wells culture, how proud you are of it, about either. What does this say, if you’ve had 39 enforcement actions, about Wells culture?”
Republican Senator David Vitter asked about the implications for Too Big to Fail:
"Why isn’t this crystal clear proof that an entity as big as Wells is not only Too Big to Fail, it’s Too Big to Manage, and Too Big to Regulate. One percent of your business if fired for fraud, but it doesn’t rise to your level?”
And Senator Bob Menendez pointed out that what Stumpf called “good paying jobs” were nowhere close to his massive compensation:
.@SenatorMenendez: You said $30,000-60,000 is good money [for workers]. How much did you make last year?
But perhaps the most stunning part of the hearing was Stumpf’s stubborn refusal to acknowledge the power he possesses as CEO and Chairman of the Board. Every time he was confronted with question about clawing back the $125 million pay package that the executive who oversaw these abuses is walking away with, Stumpf repeated that he wasn’t on the Board of Director’s compensation committee, and he didn’t want to prejudice any decision they make.
While many, from Senator Brown to Shelby pointed out over and over that Stumpf is the Chairman of the Board, Senator Warren had perhaps the most colorful way to point out that the responsibility lies with him:
.@SenWarren: Mr. Stumpf, you keep referring to the Board as if they’re strangers in a dark alley. You’re Chairman of the Board #WellsFargo
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