Yesterday, during the House Financial Services Committee hearing, I had the opportunity to question the Wells Fargo CEO, John Stumpf, about one of the worst financial abuses since the foreclosure crisis. Colleagues and I on the House Financial Services Committee examined how thousands of people were deceived and ripped off under his watch. Needless to say, there wasn’t a clear explanation.
My questions to Mr. Stumpf centered on just how high this scheme, this blatant disregard for moral decency, extended in the company. Wells Fargo has fired 5,300 lower level employees, but it is unclear how much senior executives are really being held accountable. The answers given were not sufficient. This behavior was not an isolated incident, but a pervasive scheme based on unreasonable quota demands and a perverse compensation structure. This kind of policy comes from the top, and senior executives must be held accountable.
From 2011 on, improper sales practices at Wells Fargo resulted in a staggering number of unauthorized accounts by employees. Employees secretly opened as many as 2 million credit or debit card accounts for current customers – without their knowledge. They then created fake pin numbers and phony email addresses to manage the accounts. All this so they could meet quotas, collect fees for opening new accounts, and charge overdraft or late fees.
Each of us on the Housing and Finance Committee represents about 700,000 people and every one of them should be angry about this. People who were denied important life-changing decisions - decisions like buying a home, a car or trying to start a business. Wells Fargo customers were getting ripped off and were not even aware – while Wells Fargo’s stock continued to rise.
The attitude unfortunately of some corporate executives is greed is good, greed is right. Thousands of bank customers were on fire and Wells Fargo had tubs of water but decided to drink it and let the people burn.
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