In a fiery Capitol Hill hearing Tuesday morning, Sen. Elizabeth Warren (D-MA) offered an incredible rebuke of John Stumpf, the CEO of Wells Fargo, where bank employees under pressure to meet demanding sales targets opened more than two million fake bank accounts over the last several years.
“You should resign. You should give back the money that you took while this scam was going on, and you should be criminally investigated, by the Department of Justice and the Securities and Exchange Commission.” Warren said.
Stumpf and Wells Fargo executives have denied there was any coordinated effort to open fake bank accounts in an attempt to boost the company’s stock price. Instead, Stumpf maintained Tuesday that individual bankers made decisions independently to open the fake accounts. Wells Fargo has fired more than 5,000 employees in connection with the fake accounts.
But Warren wasn’t letting Stumpf off the hook nor did a cadre of other senators – both Republicans and Democrats – who grilled the CEO.
“This just is not right. A cashier is held accountable, but Wall Street executives who never hold themselves accountable, not now and not in 2008 when they crashed the worldwide economy,” Warren said. “The only way that Wall Street will change is if executives face jail time when they preside over massive fraud. We need tough new laws to hold corporate executives personally accountable.”
During her line of questioning at the Senate Banking Committee hearing, Warren argued that Stumpf had personally profited from the bankers opening up the fake accounts. She read from quarterly meetings where Stumpf had personally used growth in the number of individual customers accounts to justify the value of the bank.
“You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket,” Warren said. “And when it all blew up, you kept your job, you kept your multimillion dollar bonuses, and you went on television to blame thousands of $12 an hour employees who were just trying to meet cross sell quotas that made you rich.”
Watch Warren grill Stumpf:
YEAH, Elizabeth ! I want to see that exchange…let’s add the video of his red faced reaction to realizing that she’s speaking the truth to rich powerful guys like this.
Asking him to give back the money must have really made him fearful. All these people know is dollar signs next to their titles.
C-Span has it at the link:
Who is this woman!!! No member of congress would EVER speak that way to a congressional sponsor and patron.
People at the top blame the workers. Workers blame the bosses. Does anyone ever admit responsibility?
Having had this happen in a company that wasn’t banking, I’ve lived the pressure to meet those quotas. The s the plan is formed with a target set at the top, and then while the program moves down the chain of command each and every manager and supervisor adds to the target. So if the original target was 10% of transactions from the top by the time it reached the tellers or personal bankers it reached 30-35% of transactions.
And nowhere is there an accounting of repeat customers. The plan is not allowing for repeat customers if the plan is based on “new services.”