Senators Warren and Brown Call on OCC, CFPB to Fire Wells Fargo CEO Tim Sloan, Renew Call for Fed Action
Senators' Letters to Fed, OCC, and CFPB Follow Two More Scandals at Bank Under Sloan's Leadership
Letter to Fed Board (PDF) | Letter to OCC and CFPB (PDF)
Washington, DC - United States Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection, and United States Senator Sherrod Brown (D-OH), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee today sent a letter to the Office of the Comptroller of the Currency (OCC) and Consumer Financial Protection Bureau (CFPB) urging the agencies to use their powers under a consent order with Wells Fargo to take additional action and remove Tim Sloan as the bank's President and CEO following recent revelations about Wells Fargo's failure to comply with the order and adequately compensate customers harmed by its auto loan scandal. The senators also sent a separate letter to Federal Reserve Board Chairman Jerome Powell highlighting two recent scandals at Wells Fargo and urging him, once again, to refrain from lifting Wells Fargo's growth restriction until Tim Sloan is replaced as the bank's President and CEO.
In their letter to the OCC and the CFPB, Senators Warren and Brown cited a recent report from Capital Forum which indicated that, under Mr. Sloan's watch, Wells Fargo has failed to compensate customers affected by the bank's illegal auto-lending practices. According to the report, Wells Fargo's steps to identify and compensate affected customers were rushed and disorganized. The senators' letter requested information from the regulators about their efforts to ensure that Wells Fargo is adequately providing restitution to customers impacted by its auto loan scandal. The letter also urged the regulators to use their power to compel Wells Fargo to hire an independent third party to monitor its remediation program and remove Tim Sloan as President and CEO.
"Given Wells Fargo's history of unlawful activity and its current leadership's apparent inability to successfully make things right, I strongly urge the OCC and the CFPB to take additional action," the senators wrote in their letter to the OCC and CFPB. "Regulators should require Wells Fargo to fire the bank's President and CEO Timothy Sloan and to install a third-party monitor so that customers the bank cheated can receive the restitution they deserve."
The senators also wrote to Chairman Powell to bring to his attention Wells Fargo's failure to fairly compensate consumers and comply with its auto loan settlement. The senators' letter highlighted a recent Securities and Exchange Commission settlement fining the bank $17.4 million for overcharging retail mutual fund investors in 2014-2015, when Mr. Sloan was a senior-level bank executive.
In February 2018, the Federal Reserve (Fed) imposed a growth restriction on Wells Fargo as part of a consent order requiring the bank to maintain total consolidated assets below the level it reported at the end of 2017. As a condition for the Fed lifting the growth cap, Wells Fargo must "ensure senior management's ongoing effectiveness in managing the (bank's) activities and related risks and promoting strong risk management across the (bank)." This January, Wells Fargo said it would operate under the Fed-imposed cap through the end of 2019.
Senator Warren first called on the Fed to require that Sloan be fired in October 2018, arguing that Sloan's long tenure in senior positions at Wells Fargo during a string of illegal activities made him unable to fulfill the terms of the settlement. She renewed that call last month after new revelations about Wells Fargo's failure to comply with an OCC consent order related to weaknesses in its anti-money laundering controls.
"These recent reports provide more evidence that Wells Fargo is currently fundamentally broken, with a record of misconduct that has lasted for years," wrote Senators Warren and Brown in their latest letter to Chairman Powell. "There is no evidence whatsoever that these problems can be fixed under Mr. Sloan's watch, and the Federal Reserve should take no action to remove the growth cap until Wells Fargo replaces Mr. Sloan as President and CEO."
Senator Warren has led the charge to hold Wells Fargo senior management accountable since the fake-accounts scandal came to light, and has called for stronger consumer protections:
- On September 20, 2016, Senator Warren called on former Wells Fargo CEO and Chairman John Stumpf to resign for his role in the fake accounts scandal. Mr. Stumpf resigned on October 12, 2016.
- On June 19, 2017, Senator Warren sent a letter to then-Fed Chair Janet Yellen urging her to remove 12 Wells Fargo board members following the fake accounts scandal.
- At a Senate Banking Committee hearing on July 13, 2017, Senator Warren again called on Chair Yellen to remove implicated Wells Fargo board members.
- Later in July 2017, Senator Warren renewed her call for the Fed to remove Wells Fargo board members after it was reported that more than 800,000 Wells Fargo customers were charged for auto insurance they did not need.
- On August 16, 2017, Senator Warren again called for the removal of Wells Fargo board members amid new evidence that the bank failed to refund money owed to car loan customers, that it overcharged small businesses for credit card transactions, and that it billed certain mortgage customers for unexpected, optional services.
- On February 2, 2018, Chair Yellen announced in response to Senator Warren that the Fed would freeze the growth of Wells Fargo and push out four of the board members responsible.
- During a March 1, 2018 Senate Banking Committee hearing, Senator Warren urged Fed Chair Jerome Powell to hold a public vote by the Fed Board on lifting growth restrictions for Wells Fargo instead of delegating it to staff. She also asked for the public release of the third-party review of how Wells Fargo is implementing reforms. Senator Warren followed up in April and again pressed Chair Powell to change course.
- In a response to Senator Warren on May 10, 2018, Chair Powell reconsidered and announced he would require a Fed Board vote on whether to lift Wells Fargo's growth restrictions. He also said he would consider releasing as much of the third-party review as possible.
- On January 17, 2019, Senator Warren questioned Tim Sloan on excessively high fees Wells Fargo charged college students.
- On February 22, 2019, Senator Warren once again urged Chair Powell not to lift growth cap restrictions on Wells Fargo until Tim Sloan is removed from his role as CEO, citing a report revealing that, beginning in 2016, Wells Fargo employees "routinely falsified clients' signatures and otherwise doctored paperwork" in order to comply with a legal settlement with the Office of the Comptroller of the Currency related to violations of anti-money laundering laws.
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