VIDEO: Lucas’ Harsh Words For Wells Fargo CEO After Fake Accounts Scandal
Congressman Frank Lucas criticized Wells Fargo CEO John Stumpf Thursday as the banking executive testified before the House Financial Services Committee.
Thousands of bank employees have been fired for setting up illegal and unauthorized accounts as part of a sales incentive program.
"I don't know how you correct this, but I suspect, sir, when you interact with your peers within the industry, you're going to have some challenges for a long time to come,” Lucas said. “Because the brush with which you will be painted will stroke all of them too. And I suspect that's blatantly unfair.”
Oklahoma's Third District Representative said the actions by low-level tellers and staffers negatively affected thousands of lives and tainted the country's banking industry.
“You've just made it really hard for those of us who want to maintain that concept of a market economy, who want to continue make sure that bankers, not some bureaucrat somewhere, are the arbitragers of capital that effectively make this country move forward,” Lucas said.
During the hearing, Stumpf apologized for the scandal, but rejected the idea that it resulted from failings in Wells Fargo's leadership and corporate culture, The New York Times’ Stacy Cowley reports:
“I led the company with courage,” Mr. Stumpf said, while admitting that the company “should have done more sooner” to address the problem of unauthorized accounts being created by employees in the names of real customers. After the Senate hearing and before the House hearing, the board of directors of Wells Fargo agreed to claw back $41 million of Mr. Stumpf’s unvested stock awards, deny him his annual bonus and strip away a portion of his $2.8 million base salary. Mr. Stumpf said he approved of the decision. Carrie L. Tolstedt, who until recently ran the Wells Fargo retail banking operation, will lose $19 million in compensation. Confronted by the lawmakers with evidence that the practice of setting up phony accounts to meet sales goals might have gone back much further than the bank has admitted, perhaps to 2007, Mr. Stumpf said that Wells Fargo was continuing to investigate the extent of the problem, how far back it stretched and who knew. But those steps did not appease the lawmakers. Several called for Mr. Stumpf’s resignation, and others asked why he shouldn’t be jailed, like a bank robber.