House law­mak­ers heap blis­ter­ing crit­i­cism on Wells Fargo CEO

Marysville Appeal-Democrat - - OBITUARIES / LOCAL / STATE / FINANCE -

WASH­ING­TON (AP) – An­gry law­mak­ers heaped an­other round of blis­ter­ing crit­i­cism on Wells Fargo’s CEO, press­ing Thurs­day for details about what se­nior man­agers knew about al­legedly il­le­gal sales prac­tices and when any con­cerns were dis­closed.

Chief Ex­ec­u­tive John Stumpf, newly stripped of tens of mil­lions in com­pen­sa­tion, told the House Fi­nan­cial Ser­vices Com­mit­tee that the bank is ex­pand­ing its re­view of ac­counts and will eval­u­ate ex­ec­u­tives’ roles. But as dur­ing the grilling he re­ceived last week from a Sen­ate panel, Stumpf re­mained on the de­fen­sive.

Sev­eral law­mak­ers, both Repub­li­can and Demo­crat, al­leged Wells Fargo’s sales prac­tices may have vi­o­lated fed­eral laws, in­clud­ing the fed­eral rack­e­teer­ing laws, which would con­sti­tute a crim­i­nal of­fense. Fed­eral reg­u­la­tors have not said if they have re­ferred the Wells Fargo case to the Depart- ment of Jus­tice.

“Fraud is fraud. Theft is theft,” com­mit­tee head Rep. Jeb Hen­sar­ling, R-Texas, told Stumpf.

The panel’s se­nior Demo­crat, Rep. Max­ine Waters of Cal­i­for­nia, was adamant the al­leged abuses show that the sec­ond-largest U.S. bank is too big for se­nior ex­ec­u­tives to keep track of what’s go­ing on. “I have come to the con­clu­sion that Wells Fargo should be bro­ken up,” she said.

Stumpf re­it­er­ated his pre­vi­ous words, that he was “deeply sorry.” He said the bank was look­ing at ac­counts fur­ther back, to 2009, and that an in­quiry by Wells Fargo’s out­side di­rec­tors will re­view ex­ec­u­tives’ roles “across the board.”

U.S. and Cal­i­for­nia reg­u­la­tors have fined San Fran­cisco-based Wells Fargo $185 mil­lion, say­ing bank em­ploy­ees try­ing to meet sales tar­gets opened up to 2 mil­lion fake de­posit and credit card ac­counts with­out cus­tomers’ knowl­edge.

Reg­u­la­tors said they is­sued and ac­ti­vated debit cards, and signed peo­ple up for on­line bank­ing with­out per­mis­sion. The abuses are said to have gone on for years, unchecked by se­nior man­age­ment.

Stumpf fi­nally shared some ba­sic in­for­ma­tion about the po­ten­tial vic­tims, say­ing those af­fected skewed to younger Wells cus­tomers. When ques­tioned by law­mak­ers, Stumpf also gave some state-by-state break­downs.

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