Sen. Sherrod Brown Tells CEO Scharf to Fix Wells Fargo

Sen. Sherrod Brown, D-Ohio, chairman of the Senate Banking Committee, told Wells Fargo CEO Charles Scharf in a recent letter to fix “the laundry list of consumer abuses and compliance breakdowns” that have occurred at the bank.

“Recent revelations of racial disparities in mortgage lending, fake job interviews for minority and female candidates, and anti-money laundering violations are troubling as Wells Fargo, unfortunately, continues to demonstrate its inability to address its longstanding risk management failures,” Brown said in a May 31 letter.

The recent problems, Brown continued, “add to the laundry list of consumer abuses and compliance breakdowns that led to the imposition of a growth restriction on your bank in 2018 until your firm improves its governance and controls.”

On May 20, Wells Fargo agreed to pay the Securities and Exchange Commission $7 million for failing to file at least 34 suspicious activity reports in a timely manner.

Brown urged Scharf “once and for all” to address Wells Fargo’s “governance, risk management, and hiring practices — weaknesses that have plagued the bank for almost a decade.”

Despite these failures, Brown told Scharf, Wells Fargo “made $21.5 billion in 2021 and announced a plan to double dividends and buyback $18 billion in stock between third quarter 2021 and second quarter 2022.”

Scharf received $24.5 million last year in total compensation, which included a 20% increase from 2020, Brown noted.

As noted in the 2022 Wells Fargo proxy statement, “your total annualized compensation exceeded 290 times the median Wells Fargo employee estimated annual total compensation of $73,578,” Brown said.

The bank’s “continued inability to manage the basic requirements of serving its customers means that consumers, investors, and employees continue to pay the price,” Brown said, adding that he expects Scharf “to have a plan to finally reform the firm’s risk management, internal controls, and governance structures.”