The Office of the Comptroller of the Currency issued fines of $37.5 million against five former Wells Fargo executives and reached settlements of $21 million with ex-Chairman and CEO John Stumpf and several other former members of the bank’s operating committee.
Stumpf is barred from the business and will pay a $17.5 million fine. Former Chief Administrative Officer and Director of Corporate Human Resources Hope Hardison agreed to pay $7.5 million, while ex-Chief Risk Officer Michael Loughlin is set to pay a $1.25 million fine.
The biggest fine for the former bank execs affects Carrie Tolstedt, who led Wells Fargo’s community bank during the fake-accounts scandal. She now faces a $25 million penalty, but it could be increased, the OCC says. Tolstedt and four others are fighting the allegations and have not reached a settlement.
The news comes more than three years after the bank agreed to pay a fine and $185 million settlement with the Consumer Financial Protection Bureau, Office of the Comptroller of the Currency and Los Angeles City Attorney’s Office over 2 million-plus client accounts and credit cards that were potentially unauthorized.
“The actions announced by the OCC today reinforce the agency’s expectations that management and employees of national banks and federal savings associations provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations,” Comptroller of the Currency Joseph Otting said in a statement.
The charges allege that the executives “failed to adequately perform their duties and responsibilities, which contributed to the bank’s systemic problems with sales practices misconduct from 2002 until October 2016,” the OCC explained.
“The misconduct of these individuals allowed the practices to continue for years, affecting millions of bank customers and thousands of lower level bank employees,” it said, adding that ex-community banking risk officer Claudia Russ Anderson made false and misleading statements to the OCC and “actively obstructed the OCC’s examinations of the bank’s sales practices.”
Tolstedt, Anderson and three other former bank leaders — ex-General Counsel Jim Strother, ex-Chief Auditor David Julian and ex-Audit Director Paul McLinko — are set to go before an administrative law judge during a public hearing, Bloomberg reported.