Out with the Wells Fargo directors.
That’s a call being made by Massachusetts Sen. Elizabeth Warren, who on Monday said Federal Reserve Chairwoman Janet Yellen should remove the dozen executives sitting on the board of the beleaguered bank.
Those individuals were at the helm of Wells at the time of the infamous fake accounts scandal that led to a tarnished reputation and millions of dollars in fines. As has been widely reported, about 2 million fake accounts were established against customers’ wishes or knowledge as Wells employees rushed to make sales quotas, resulting in Wells paying $185 million in fines last year. Several thousand employees were terminated.
The board members, CNBC.com reported, were cited by Warren as failing to guard the best interests of their customers.
A letter Warren sent Yellen says the scandal shed light on “severe problems” with Wells’ risk management. And the Fed, noted the senator, has the power to remove the dozen board members. “The fake accounts scandal cost Wells Fargo customers millions of dollars in unauthorized fees and damaged many of their credit scores,” the letter stated. “The scandal also revealed severe problems with the bank’s risk management practices — problems that justify the Federal Reserve’s removal of all responsible Board members.” Further, Warren said the Fed “has done nothing to date” to punish the bank “despite its ample statutory authority.” Warren went on to say, “I urge you to use the tools Congress has given you to remove the responsible board members and protect the continued safety and soundness of one of the country’s largest banks.”