Wells Fargo CEO Takes Bipartisan Beating Over Mass Fraud Scandal
Lawmakers grilled Wells Fargo CEO John Stumpf on the two million fake accounts company employees created to meet sales expectations at a four-hour House Financial Services Committee hearing Thursday.
Members on both sides of the aisle lambasted Stumpf for his mismanagement of the bank and failure to take responsibility for the mass fraud at the banking giant.
“Mr. Stumpf, I have a mortgage with your bank. I wish I didn’t,” Chairman Jeb Hensarling said. “I wish I was in the position to pay it off because you have broken my trust as you have broken the trust of millions and it’s going to take a long time to earn it back”
The embattled CEO, who was raked over the coals by members in the upper chamber last week, argued individual employees, not the company’s culture are what led to the scandal that shook the banking industry.
“I don’t want our culture to be defined by these mistakes,” he told the panel, which were less than impressed with his answers.
While the bank was handed a $185 million fine by the Consumer Financial Protection Bureau, the company’s board clawed back $41 million of Stumpf’s salary and 5,300 people were fired — lawmakers said the punishment doesn’t fit the gravity of the crime.
“When your stocks were bought, it benefited you and top level executives to the detriment of lower level entry employees. They get fired,” Texas Democrat Rep. Al Green said. “Top level executives get golden parachutes. And it’s business as usual. Well, Mr. chairman, this will not end by simply having some lower level employees go to jail.”
Several committee members called for his resignation, arguing the fraud happened on his watch and he should have done more to prevent it.
“I came to Congress to deregulate and because of your actions it’s really making it extremely difficult for me to advocate for main street or community banks,” Texas Republican Rep. Roger Williams said. “So I’ve got one simple question for you. When are you going to resign?”
Stumpf reiterated his promise to correct the company’s wrongdoings, noting Wells Fargo has already reimbursed $2.6 billion in fees on the unauthorized accounts.
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