Sen. Elizabeth Warren blasts Wells Fargo management over sales practices
Sen. Elizabeth Warren on Thursday blasted top management of Wells Fargo & Co. over the aggressive sales tactics of bank employees that led to a $185-million settlement with federal and state regulators.
The Massachusetts Democrat said there was a “serious problem with senior management at Wells Fargo” and complained that so far there had not been enough accountability by Wells Fargo’s top executives for the employees’ actions.
Warren’s remarks set the stage for what’s expected to be a contentious Senate Banking Committee hearing Tuesday, where Wells Fargo Chairman and Chief Executive John Stumpf is scheduled to appear. Warren is a member of the committee.
“I want to hear something about some accountability,” Warren said in an interview with CNBC. “The question is about senior management. Is it the case that they really didn’t know what was going on? Because if they didn’t, then this is a bank that’s just too big to manage.
“We’re talking about a scandal here that involves thousands of their employees cheating tens of thousands of customers out of money and making millions of dollars doing it for the bank,” she said.
Wells Fargo, which neither admitted nor denied the allegations in the settlement, declined to comment on Warren’s remarks.
But the San Francisco-based banking giant reiterated that it was ready to provide the committee “with information on this matter and to discuss steps we have taken to affirm our commitment to customers.”
Wells Fargo last week agreed to the settlement with federal regulators and Los Angeles City Atty. Mike Feuer over the sales tactics, which sources said are being probed by the Justice Department.
The tactics, first uncovered by the Los Angeles Times in 2013, involved thousands of bank employees opening as many as 2 million accounts that customers did not authorize in order to meet aggressive sales goals.
Investigations by the city attorney’s office and federal banking regulators described some of the steps employees took to open the savings, checking and credit card accounts as fraudulent and illegal.
Top executives have blamed lower-level employees for the problem and said there were no incentives to take improper actions. The bank also said it discovered the problem itself and has fired 5,300 workers for improper sales practices since 2011.
Stumpf told CNBC earlier this week that he was accountable for the problems but did not plan to resign. “The best thing I could do right now is lead this company and lead this company forward,” he said.
For more business news, follow James F. Peltz on Twitter: @PeltzLATimes
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