Sen. Warren Presses Fed Chair Powell on Wells Fargo Remediation Plans

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.”