Sen. Elizabeth Warren (D-Mass.) grilled Federal Reserve Chair Jerome Powell on Thursday over the measures the U.S. central bank is taking to hold Wells Fargo accountable for consumer abuses dating back to 2016.
Warren, who cast the lone vote against Powell’s nomination as Fed Chair, asked him whether the Fed will hold a vote to determine if Wells Fargo is adhering to the strict guidelines. She noted that Wells Fargo is required to submit to plans for review in April – an update on its risk management practices and a review of its board’s effectiveness.
“I’ve pushed the Fed for real accountability on Wells Fargo and its board for repeatedly cheating its customers, and I was glad to see the Fed take action. But I want to understand how the Fed intends to enforce the consent order now that you’re in charge,” Warren told Powell.
The Fed said early last month it would restrict the growth of the bank until it “sufficiently improves its governance and controls,” and it replaces three board members by April and a fourth member by the end of the year. The central bank’s cease and desist order with the bank requires the firm to improve its “governance and risk management processes,” which includes boosting the effectiveness of oversight by its board.
Powell initially said the Fed board did not plan to hold a vote on Wells Fargo’s compliance – a stance that drew a sharp rebuke from Warren.
“Fed Board members are supposed to make the big decisions and Fed Board members are supposed to be accountable for these decisions. Will you consider requiring a vote by the Fed board before these measures are approved?” Warren said.
Powell answered Warren’s question with a simple “yes.” When asked if he would consider making the a third-party review of Wells Fargo’s compliance public, Powell said he could not commit to doing so without speaking with his staff.
“I will look at that and if there’s a way to do it that’s faithful to our obligations and our practices,” Powell said.
Wells Fargo shares are down nearly 12% in the last month.