Elizabeth Warren to Fed: Wells Fargo CEO must go
Sen. Elizabeth Warren, D-Mass., asked Federal Reserve Chairman Jerome Powell on Thursday to keep growth restrictions on Wells Fargo in place until the bank ousts its CEO, Tim Sloan.
Warren, who sits on the Senate Banking Committee, has long advocated for harsh disciplinary action against Wells Fargo amid a series of scandals related to questionable business practices. Last Februry, the Fed imposed a growth cap on Wells Fargo until the bank demonstrably improved its corporate governance and replaced four members of its board of directors.
“I write to urge you not to remove the growth cap the Federal Reserve has imposed on Wells Fargo until the company's Board of Directors replaces CEO Tim Sloan with someone who is not deeply implicated in the bank's repeated and egregious misconduct,” Warren wrote in a letter. “Given Mr. Sloan's track record, the Board of Directors cannot comply with the Federal Reserve's requirements for removing the growth cap if it permits Mr. Sloan to continue running the company.”
A longtime Wells Fargo executive, Sloan replaced John Stumpf as CEO in October 2016. Stumpf resigned after the Consumer Financial Protection Bureau uncovered evidence that Wells Fargo employees had fraudulently opened millions of credit card and deposit accounts for customers without their consent in order to pad sales figures.
Later, Wells Fargo’s auto insurance arm was accused of misleading customers into taking out unnecessary policies. The CFPB rejected the bank’s proposal to refund the loan customers last September, ordering it to do more to compensate impacted consumers.
Warren has repeatedly clashed with Powell since he became head of the Fed in February. She cast the lone dissenting vote during his confirmation process and pressed the chairman last March to conduct a hearing gauging Wells Fargo’s adherence to federal governance mandates.
Despite Wells Fargo’s various scandals, Sloan received a $4.6 million raise last year, earning $17.6 million in total compensation.