Warren Tells Fed (Again): Wells Fargo CEO Has to Go
Her request follows findings of independent research tied to Tim Sloan's role in the fake-accounts scandals in 2016.
Sen. Elizabeth Warren, D-Mass., is repeating her request that the Federal Reserve not lift a restriction on growth at Wells Fargo until CEO Tim Sloan is removed from his post.
She wrote a letter to Fed Chair Jerome Powell on Friday, about one week after a report by the research group Capital Form found that staff in the bank’s wholesale banking unit “routinely falsified clients’ signatures and otherwise doctored paperwork” in 2016, when Sloan was in charge of the unit and reached a legal settlement with the Office of the Comptroller of the Currency (OCC) due to violations of anti-money laundering laws.
The Feb. 14 report also concludes that Sloan led the unit “while documents were doctored by the bank to falsely represent that it was complying with the terms of that settlement,” according to Warren.
The Fed put a growth cap on the bank In February 2018. In addition, the bank must “ensure senior management’s ongoing effectiveness in managing the firm’s activities and related risks and promoting strong risk management across the firm” in order for the restriction to end.
“This latest report of Wells Fargo misconduct, if true, provides evidence the bank, under Mr. Sloan’s leadership, failed to comply with anti-money laundering laws and then falsified documents to cover up noncompliance with a government order when the company got caught,” Warren said. “The Federal Reserve should take no action to remove the growth cap until Wells Fargo replaces Mr. Sloan as CEO.”
The lawmaker made a similar request in October 2018, and about two years earlier she demanded that then-Chairman John Stumpf resign over the fake-accounts scandal.
“In Mr. Sloan’s 31 years at Wells Fargo — many of them in senior positions at the bank — he has presided over a litany of unlawful actions that reveal little to no effectiveness in managing the firm’s activities and related risks,” she added.
(Click here for A Timeline of the Wells Fargo Scandals)
In its recent report, the Capital Forum wrote that bank employees “routinely falsified clients’ signatures and otherwise doctored paperwork in a misguided effort to satisfy anti-money laundering rules, prompting three federal agencies to consider sanctioning the bank,” citing “sources familiar with the matter.”
While the Wall Street Journal’s coverage of the scandals has highlighted bogus signatures made in 2017, the Capitol Forum says it has discovered that problems began a year earlier.
In response to the new report, the bank told the research organization: “There were no customers negatively impacted, no data left the company, and there were no products or services sold as a result of this issue … We take all issues relative to documentation very seriously.”
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