Sen. Elizabeth Warren, D-Mass., called on Federal Reserve Board Chairman Jerome Powell Tuesday to formally commit to a Board of Governors vote on whether Wells Fargo has satisfied its “remediation” plans that were set in motion by former Fed Chair Janet Yellen.
In a Tuesday letter to Powell, Warren notes the Feb. 2 consent order between the Fed and Wells Fargo prohibiting the bank from growing until it makes certain improvements.
Under the order’s terms, “Wells Fargo must submit a plan to make its board of directors more effective and a plan to improve its risk management policies to the Board by mid-April.”
Warren was taken aback by Powell’s March 1 testimony before the Senate Banking Committee in which he said he intended to delegate to staffers the Fed Board’s decision about whether to accept Wells Fargo’s remediation plans.
At the hearing, Warren challenged Powell to “consider requiring a vote of the Fed” before approving a plan, and Powell agreed.
“Requiring Senate-confirmed governors to vote on important enforcement decisions allows Congress and the American public to hold them accountable for their actions,” wrote Warren. “Given the breadth of wrongdoing at Wells Fargo and the enormous number of consumers affected, the Fed’s governors — not its staff — should be responsible for determining whether Wells Fargo is complying with the consent order.”
In her letter, Warren also requested that Powell publicly release the third-party review — required by the consent order — of Wells Fargo’s implementation of the plans.
Powell said during the March 1 hearing that he would release what he could “if there is a way to do it that is faithful to (y)our obligations and (the Board’s) practices.”
Warren urged Powell to release “as much of the third-party review as possible so Congress and the public can assess how the bank is trying to correct its conduct.”
Wrote Warren: “Wells Fargo scammed more than a million consumers across many of its business lines. The public deserves to see that the Board is strictly enforcing its order.”
She requested a response from Powell no later than April 19.
— Check out Sen. Warren, Fed Chair Powell Tangle Over Wells Fargo Sanction on ThinkAdvisor.