March 25, 2019

Senators Warren and Brown Call on OCC, CFPB to Fire Wells Fargo CEO Tim Sloan, Renew Call for Fed Action

Senators' Letters to Fed, OCC, and CFPB Follow Two More Scandals at Bank Under Sloan's Leadership

In Case You Missed It:

Senators Warren and Brown Call on OCC, CFPB to Fire Wells Fargo CEO Tim Sloan, Renew Call for Fed Action

Senators' Letters to Fed, OCC, and CFPB Follow Two More Scandals at Bank Under Sloan's Leadership

Letter to Fed Board (PDF) | Letter to OCC and CFPB (PDF)

Washington, DC - Last week, United States Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection, and United States Senator Sherrod Brown (D-Ohio), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee sent a letter to the Office of the Comptroller of the Currency (OCC) and Consumer Financial Protection Bureau (CFPB) urging the agencies to use their powers under a consent order with Wells Fargo to take additional action and remove Tim Sloan as the bank's President and CEO following recent revelations about Wells Fargo's failure to comply with the order and adequately compensate customers harmed by its auto loan scandal. The senators also sent a separate letter to Federal Reserve Board Chairman Jerome Powell highlighting two recent scandals at Wells Fargo and urging him, once again, to refrain from lifting Wells Fargo's growth restriction until Tim Sloan is replaced as the bank's President and CEO. 

In their letter to the OCC and the CFPB, Senators Warren and Brown cited a recent report from Capital Forum which indicated that, under Mr. Sloan's watch, Wells Fargo has failed to compensate customers affected by the bank's illegal auto-lending practices. According to the report, Wells Fargo's steps to identify and compensate affected customers were rushed and disorganized. The senators' letter requested information from the regulators about their efforts to ensure that Wells Fargo is adequately providing restitution to customers impacted by its auto loan scandal.  The letter also urged the regulators to use their power to compel Wells Fargo to hire an independent third party to monitor its remediation program and remove Tim Sloan as President and CEO.

"Given Wells Fargo's history of unlawful activity and its current leadership's apparent inability to successfully make things right, I strongly urge the OCC and the CFPB to take additional action," the senators wrote in their letter to the OCC and CFPB. "Regulators should require Wells Fargo to fire the bank's President and CEO Timothy Sloan and to install a third-party monitor so that customers the bank cheated can receive the restitution they deserve."

The senators also wrote to Chairman Powell to bring to his attention Wells Fargo's failure to fairly compensate consumers and comply with its auto loan settlement. The senators' letter highlighted a recent Securities and Exchange Commission settlement fining the bank $17.4 million for overcharging retail mutual fund investors in 2014-2015, when Mr. Sloan was a senior-level bank executive.

In February 2018, the Federal Reserve (Fed) imposed a growth restriction on Wells Fargo as part of a consent order requiring the bank to maintain total consolidated assets below the level it reported at the end of 2017.  As a condition for the Fed lifting the growth cap, Wells Fargo must "ensure senior management's ongoing effectiveness in managing the (bank's) activities and related risks and promoting strong risk management across the (bank)." This January, Wells Fargo said it would operate under the Fed-imposed cap through the end of 2019.

Senator Warren first called on the Fed to require that Sloan be fired in October 2018, arguing that Sloan's long tenure in senior positions at Wells Fargo during a string of illegal activities made him unable to fulfill the terms of the settlement. She renewed that call last month after new revelations about Wells Fargo's failure to comply with an OCC consent order related to weaknesses in its anti-money laundering controls.

"These recent reports provide more evidence that Wells Fargo is currently fundamentally broken, with a record of misconduct that has lasted for years," wrote Senators Warren and Brown in their latest letter to Chairman Powell. "There is no evidence whatsoever that these problems can be fixed under Mr. Sloan's watch, and the Federal Reserve should take no action to remove the growth cap until Wells Fargo replaces Mr. Sloan as President and CEO."

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