Senator wants Wells Fargo CEO to resign and be criminally investigated


Pressure has been building beyond Capitol Hill for Stumpf and Wells Fargo's board of directors to come up with better answers.

In one tense exchange, Sen.

Stumpf made $19.3 million in 2015, which puts him among the top earners among major financial institutions.

But that was not enough for many members of the committee, who grilled Stumpf for details about the scheme and repeatedly expressed astonishment that senior management allowed problems to fester for so long without taking more assertive action. Elizabeth Warren, D-Massachusetts, called on him to resign and said he should face criminal charges. "This is gutless leadership".

"OK, so you haven't resigned". "I have been with Wells Fargo through many challenges, none that pains me more than the one we will discuss this morning". While he accepted "full responsibility" Tuesday for the bank's misdeeds, earlier he had pinned the blame for the affair on bad employees, telling The Wall Street Journal that "there was no incentive to do bad things".

CEO John Stumpf performed poorly during his testimony Tuesday, according to the consensus view.

The panel also plans to question regulators from the Consumer Financial Protection Bureau, the Treasury Department's Office of the Controller of the Currency and the Los Angeles City Attorney's Office.

The scandal has resulted in $185 million in fines, a commitment to set aside $5 million to reimbursement customers who were charged fees on the fraudulent accounts, the firing of 5,300 employees, the installation of independent overseers at the bank, and new procedures including a requirement for employees to get signatures of credit-card applicants and to obtain customer confirmation before new accounts are created.

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Wells Fargo itself seems to have tacitly acknowledged that fake accounts may have been a big problem earlier than the 2011. Also, three customers in Utah have filed a lawsuit against the bank for fraud, breach of contract and invasion of privacy.

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She asked Stumpf if he knew how much he personally made as Wells Fargo's stock price soared during these years. Senior management, they said, seemed to ignore this practice because it helped turn the bank into a profit machine. The time frame that was already under review began in 2011.

The big question, do customers still trust Wells Fargo? The committee is independent, Stumpf said, and "I don't want to prejudice their activity".

In early September, regulators for California and the federal government joined forces to levy one of the largest fines to ever hit a US financial institution.

The Wells Fargo hearing inspired a rare burst of bipartisanship from Republicans and Democrats who teamed up to hold the hearing. Wells Fargo shares rose 2 percent to $46.94. The fake accounts were created without the knowledge nor the permission of the customers and, to make the situation even more outrageous, Wells Fargo stonewalled their client's inquiries and complaints.

Stumpf faced tough questioning from lawmakers about whether the company's top executives should return some of their bonuses over the misconduct. The House committee, chaired by GOP Rep. Jeb Hensarling, has asked for interviews before the end of the month with Wells Chief Financial Officer John Shrewsberry, Chief Operating Officer Timothy Sloan, Chief Risk Officer Michael Loughlin and former community banking chief Carrie Tolstedt. "You should give back the money that you took..." Sherrod Brown (Ohio), the ranking Democrat on the committee.

Stumpf also suggested that the Wells Fargo board, in an independent process, will consider possible clawbacks of her compensation.

That annoyed lawmakers even more. "How do you fire someone making 15 bucks and not the person" over the unit? If it was, you wouldn't have to squeeze your employees so hard to make it happen.