Wells Fargo CEO apologizes; senators heap criticism on bank

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

News 12 Staff

Sep 20, 2016, 11:06 PM

Updated 2,773 days ago

Share:

Wells Fargo CEO apologizes; senators heap criticism on bank
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.
Wells Fargo sales employees, trying to meet targets that called for every customer 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 even 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 asked that he specifically lay out action the bank will take to do so. They also 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.
Wells Fargo has long been known in the banking industry for its aggressive sales goals. Carrie Tolstedt, the former head of the retail banking business, announced in July that she would retire from the bank this year. She is expected to leave with as much as $125 million in salary, stock options and other compensation.
Sen. Bob Corker of Tennessee said it would be "malpractice" if the bank doesn't institute the compensation clawbacks, and Stumpf said the board "has the tools to hold senior leadership accountable," including himself and Tolstedt.
Questioned again by Warren, Stumpf said the bank had not considered firing her.
Under the settlement with regulators, it neither admitted nor denied the allegations. It later said it plans to eliminate the sales targets by Jan. 1. Some 5,300 Wells Fargo employees have been fired.
Stumpf offered some detail at the hearing about who was fired, saying "bankers, bank managers, managers of managers, and even an area president." They ranged in pay from about $35,000 to $65,000.


More from News 12
0:51
Wildfire in Wharton State Forest consumes more than 400 acres of land

Wildfire in Wharton State Forest consumes more than 400 acres of land

1:56
Isolated storms tonight; freeze warning in effect for parts of NJ overnight

Isolated storms tonight; freeze warning in effect for parts of NJ overnight

2:54
Longtime Democratic US Rep. Donald Payne Jr. dies at 65 following heart attack

Longtime Democratic US Rep. Donald Payne Jr. dies at 65 following heart attack

1:53
Shop Mother’s Day Gifts – Exclusive Offers Up to 75% OFF!

Shop Mother’s Day Gifts – Exclusive Offers Up to 75% OFF!

0:56
Passaic to get $1.6M in federal funds to reduce flash flooding where 2 people died

Passaic to get $1.6M in federal funds to reduce flash flooding where 2 people died

2:56
Doctors combine a pig kidney transplant and a heart device in a bid to extend New Jersey woman's life

Doctors combine a pig kidney transplant and a heart device in a bid to extend New Jersey woman's life

0:43
Jersey Proud: Manchester HS students teach older generation about tech

Jersey Proud: Manchester HS students teach older generation about tech

2:23
'The tower is an eyesore.' Demolition of former Nabisco factory tower set to begin after 1-year delay

'The tower is an eyesore.' Demolition of former Nabisco factory tower set to begin after 1-year delay

1:03
Rep. Gottheimer announces another attempt to put an end to NYC’s congestion pricing plan

Rep. Gottheimer announces another attempt to put an end to NYC’s congestion pricing plan

0:29
Former Wawa gas attendant accused of stealing thousands of dollars from customers

Former Wawa gas attendant accused of stealing thousands of dollars from customers

1:33
AAA: New Jersey gas prices increase nearly 20 cents from last week

AAA: New Jersey gas prices increase nearly 20 cents from last week

2:12
Princeton University accused of violating civil rights of Jewish students

Princeton University accused of violating civil rights of Jewish students

0:37
Prosecutors: Former Jersey City police officer charged with sex assault, criminal restraint

Prosecutors: Former Jersey City police officer charged with sex assault, criminal restraint

0:27
Washington Township police issues warning over 'Water Wars' game

Washington Township police issues warning over 'Water Wars' game

0:34
Camden County man charged in crash that killed young mother

Camden County man charged in crash that killed young mother

2:18
Remnants of bird flu virus found in pasteurized milk, FDA says

Remnants of bird flu virus found in pasteurized milk, FDA says

0:32
US banning TikTok? Your key questions answered

US banning TikTok? Your key questions answered

0:35
Bon Jovi docuseries premieres Friday on Hulu

Bon Jovi docuseries premieres Friday on Hulu

0:31
New federal rule would bar 'noncompete' agreements for most employees

New federal rule would bar 'noncompete' agreements for most employees

1:02
Composting can save money, help gardens and save the planet. Here are 10 tips to get you started

Composting can save money, help gardens and save the planet. Here are 10 tips to get you started