April 04, 2018

Warren Calls on Fed Chairman Powell to Commit to a Public Vote on Wells Fargo's Remediation Plans

Senator Urges Powell to Release Third Party Review of how Bank is Implementing Reforms

Text of letter (PDF)

Washington, DC - United States Senator Elizabeth Warren (D-Mass.) sent a letter to Chairman of the Federal Reserve Jerome Powell calling on him to formally commit to a Board of Governors vote on whether Wells Fargo's remediation plans are satisfactory under the terms of the February 2, 2018 consent order between the Federal Reserve and Wells Fargo. She also asked Chairman Powell to commit to releasing as much of the third-party review of Wells Fargo's implementation of the plans.

The consent order prohibits Wells Fargo from growing any larger until it makes certain improvements. Under the order's terms, Wells Fargo must submit a plan to make its board of directors more effective and a plan to improve its risk management policies to the Board by mid-April. During a March 1st  Senate Banking Committee hearing, Chairman Powell said he intended to delegate the Board's decision about whether to accept Wells Fargo's remediation plans to staff. Senator Warren asked Chairman Powell to "consider requiring a vote of the Fed before" approving a plan and Chairman Powell said he would.

In her letter, Senator Warren pressed Chairman Powell to formally commit to requiring a vote by the Fed's governors. "Requiring Senate-confirmed governors to vote on important enforcement decisions allows Congress and the American public to hold them accountable for their actions," wrote Senator Warren. "Given the breadth of wrongdoing at Wells Fargo and the enormous number of consumers affected, the Fed's governors - not its staff - should be responsible for determining whether Wells Fargo is complying with the consent order."

Also during the March 1st hearing, Senator Warren asked Chairman Powell to publicly release the third-party review - required by the consent order - of Wells Fargo's implementation of the plans. Chairman Powell said he would release what he could "if there is a way to do it that is faithful to (y)our obligations and (the Board's) practices. In her letter, Senator Warren urged Chairman Powell to release as much of the third party review as possible so Congress and the public can assess how the bank is trying to correct its conduct.

"Wells Fargo scammed more than a million consumers across many of its business lines," wrote Senator Warren. "The public deserves to see that the Board is strictly enforcing its order." Senator Warren requested a response from Chairman Powell no later than April 19, 2018.