Feds Revoke Agreement And Leave Wells Fargo Scrambling

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Robert Donachie Capitol Hill and Health Care Reporter
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Federal regulators revoked key components of the two month old settlement they made with Wells Fargo, putting the American banking institution under strict oversight for the unforeseeable future.

The Office of the Comptroller of the Currency (OCC) announced Friday that it “revoked” certain provisions of the original deal and that Wells Fargo now has to comply with a host of new demands. For instance, the firm must provide the OCC with a “written notice” if it is making changes in “directors and senior executive officers.” The firm can no longer provide “golden parachute payments,” a term used to describe the lucrative benefits an employee gets from the firm if they are terminated or retire.

The federal government originally agreed to a $185 million dollar settlement after Wells Fargo was found guilty of opening over two million bank accounts without customer consent. (RELATED: Wells Fargo Just Got Hit With The Biggest Fine In CFPB History)

Wells Fargo management initially responded to the crisis by firing 5,300 employees associated with the scandal, but these surface changes were not enough for customers or lawmakers.

Former Chairman and CEO John Stumpf faced congressional investigation and a grilling from Senate leadership. Massachusetts Sen. Elizabeth Warren told Stumpf in a congressional hearing, “You should resign. You should give back the money that you took while this scam was going on, and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.”

Following the congressional hearings, the Wells Fargo board ordered Stumpf to cough up $41 million in assets and earnings he accrued from his decades-long tenure at the bank. The board also cut some mid-level management. (RELATED: Wells Fargo Investors Want Company Board To Do More)

Stumpf announced he was stepping down as chairman and CEO Oct. 12.

The announcement by the OCC is the latest strike against Wells Fargo in the wake of the scandal.

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