June 19, 2017

Warren Urges Fed to Remove 12 Wells Fargo Board Members Following Fake Accounts Scandal

Text of the letter (PDF)

Washington, D.C. - United States Senator Elizabeth Warren (D-Mass.) on Monday urged the Federal Reserve to remove 12 current members of the Wells Fargo Board of Directors who served during the fake accounts scandal from 2011 to 2015.

In calling for their removal, Senator Warren cited the Federal Reserve's ample statutory authority to remove a director who violates laws or regulations or engages in unsafe practices that could cause a financial loss or otherwise damage the institution they serve.

"I urge you to exercise your legal authority to remove the holdover Wells Fargo Board members. Federal Reserve regulations and guidance impose clear risk-management obligations on the Board- obligations that are quite demanding for a bank as large and complex as Wells Fargo," wrote Senator Warren. "An exhaustive investigation into the Board's conduct establishes that the Board failed to satisfy its risk-management obligations. The Board did nothing to stop rampant misconduct in the Community Bank that resulted in more than 5000 bank employees creating more than two million fake accounts over four years."

In concluding her 8 page letter to Federal Reserve Board Chair Janet Yellen, Senator Warren wrote, "The 2008 financial crisis demonstrated the danger of inadequate risk-management practices at the country's largest banks. The Federal Reserve must hold the Wells Fargo Board members accountable for their risk-management failures - both to ensure the safety and soundness of one of the country's biggest banks and to show the rest of the banking industry that poor risk management practices will not be tolerated. The CFPB and the OCC have acted within their jurisdiction in response to the Wells Fargo scandal. It is time for the Federal Reserve to act as well."