Wells Fargo CEO apologizes at Senate hearing
Bank head blasted over allegations employees opened fake accounts
WASHINGTON — The CEO of Wells Fargo faced accusations of fraud and calls for his resignation Tuesday from harshly critical senators at a hearing over allegations that bank employees opened millions of accounts customers didn’t know about to meet aggressive sales quotas.
Members of the Senate Banking Committee showed bipartisan outrage over the long-running conduct, unsatisfied by Chief Executive John Stumpf’s show of contrition.
Stumpf said he was “deeply sorry” that the bank failed to meet its responsibility to customers and didn’t act sooner to stem “this unacceptable activity.” He promised to assist affected customers.
Sen. Elizabeth Warren flatly told Stumpf he should resign. “You squeezed your employees to the breaking point so they would cheat customers,” she said. “You should resign. You should give back the money you took while the scam was going on.”
The Massachusetts Democrat, one of the fiercest critics of Wall Street, also advocated for a criminal investigation by the Justice Department and securities regulators.
Stumpf, a 34-year veteran of Wells Fargo and CEO since 2007, earned $19.3 million last year. The bank does have in place provisions its board could implement to claim back executive compensation.
Sales employees, trying to meet targets for every customer to have eight products with the bank, opened more than 2 million bank and credit card accounts, regulators said last week in levying a $185 million fine.
Money in customers’ accounts was said to have been moved to these new accounts without their permission. Debit cards were issued and activated, as well as PINs created, without telling customers. In some cases, bank employees created fake email addresses to sign up customers for online banking services, the regulators said.
Peppered with criticism for hours, Stumpf at one point stumbled a bit over his words and bristled at Warren’s suggestion that the sales practices were a “scam.”
“We recognize now that we should have done more sooner,” he acknowledged. “I am deeply sorry that we have not lived up to our values in this way.” He promised: “I will make it right.”
The senators challenged assertions that he and other Wells Fargo senior executives didn’t become aware of the problems until 2013 — when the sales misconduct was reported by The Los Angeles Times. The practices apparently began at least in 2009.