WASHINGTON–Regulators should shut down Wells Fargo for its abuse of the trust of millions of its customers, according to one member of Congress.
Meanwhile, during testimony before Congress yesterday, the company’s CEO, Timothy J. Sloan, got an earful from several members of the Senate at a hearing on Wells Fargo’s illegal sales practices.
Sen. Elizabeth Warren (D-MA) told Sloan, “At best you are incompetent, at worst you were complicit,” Ms. Warren said. “Either way you should be fired.”
Warren also called for Wells Fargo directors who served on the board during the years of the fake account scandal to be removed.
Sloan told the Senate hearing, “I also want to be clear about another thing: Wells Fargo is a better bank today than it was a year ago. And next year, Wells Fargo will be a better bank than it is today. That is because we have spent the past year determined to earn back the public’s trust.”
That was met with skepticism, with Sen. John Kennedy (R-LA) saying to Sloan, “What in God’s name were you thinking?”
Separately, Rep. Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, has issued a 38-page report that is critical of regulators for failing to punish the bank more severely following scandals that have involved millions of customers and heavy fines. The report refers to Wells Fargo as a “repeat offender” and cites the 3.5-million bogus accounts opened as employees tried to hit unreasonable sales goals, forcing more than 570,000 auto loan customers to purchase unnecessary auto insurance, and alleged discrimination in its mortgage lending program, among other issues.
"When a megabank has engaged in a pattern of extensive violations of law that harms millions of consumers, like Wells Fargo has," the report said, "it should not be allowed to continue to operate within our nation's banking system."
Wells Fargo has approximately $1.75-trillion in assets, 70-million customers and 271,000 employees
As CUToday.info has reported, Wells Fargo was fined $185 million by regulators in 2016 as part of a settlement related to the fake accounts. In the report, Waters says the fines are meaningless with big banks like Wells Fargo because they are ultimately paid by shareholders, not the executives who preside over bad behavior.
The report said regulators should have considered harsher penalties, shut down problem areas of Wells Fargo, removed executives and directors, banned personnel from working in financial services, revoked the bank's national charter, and considered shutting down the bank entirely.