The Senate Banking Committee took turns grilling Wells Fargo CEO John Stumpf Tuesday about illegal accounts that were opened without customer authorization.
As many as 2 million unauthorized accounts were created in order to meet sales goals and collect bonuses. Customers were charged excessive fees and experienced damage to their credit ratings. The bank has fired about 5,300 employees involved in the scandal and agreed to paying a fine of $185 million.
But the committee says that is not hardly enough. They want those at the top to return the ill gotten gains.
For 2 ½ hours, senators on Capitol Hill expressed their contempt for the bank’s criminal behavior and demanded answers.
“What we've been learning is so deeply disturbing at so many levels,” Republican Senator Pat Toomey said.
Stumpf repeatedly apologized and said he takes “full responsibility” for the misconduct. But Democratic Senator Elizabeth Warren wasn’t buying it. “Your definition of accountable is to push the blame to your low-level employees who don't have the money for a fancy PR firm to defend themselves. It's gutless leadership,” she said.
Senator Jon Tester, another Democrat, asked Stumpf about damage being done to customers’ credit ratings. “Just tell me. Did the information, if there was fees and fines involved, and the credit bureaus requested it—or even if they didn’t—did that information get forwarded to the credit bureaus?
“I'm trying to—sir, I'm trying to work with you,” Stumpf replied. “Yes or no works,” Tester said. Stumpf then said yes.
Warren said Wells Fargo was known for cross-selling products to its customers, encouraging those with checking accounts to open credit cards, for instance. That put a lot of pressure on employees to meet ambitious sales targets.
But Wall Street loved it. And the bank's stocks soared. Stumpf’s personal stock in Wells is valued at approximately $250 million. Some of the biggest gains were made during the time fraudulent activity was taking place.
In July, former executive Carrie Tolstedt, who oversaw the division most responsible for the scandal, retired and walked away with about $125 million in bonuses, options and stock. Stumpf told the Senate he never considered firing her. In fact, he praised Tolstedt’s work, calling the retail banking head “one of the most valuable Wells Fargo leaders, a standard-bearer of our culture, a champion for our customers, and a role model for responsible, principled and inclusive leadership.”
In addition to the pressure being placed on high-level Wells Fargo executives, a petition is being circulated online to demand the return of compensation received during the illegal activity. Moveon.org is calling for Stumpf and Tolstedt to give back a portion of their compensation. There are currently 63,597 signatures. The goal is 75,000. To sign the petition, go online atwww.moveon.org.