Wells Fargo CEO John Stumpf To Appear Before Senate Banking Committee
DAVID GREENE, HOST:
Today on Capitol Hill, John Stumpf, the CEO of Wells Fargo, is probably going to get a grilling from the Senate Banking Committee. He's going to be asked why his bank's employees created at least 2 million accounts without the knowledge or consent of its customers. Thousands of Wells Fargo staff responsible were fired, and the bank was fined $185 million. But there's also this. The executive who ran the unit responsible for creating these accounts is set to get $125 million in stock and options when she retires this year.
Let's turn to a person who presumably will be asking some of the questions at today's hearing. It's Ohio Democrat Sherrod Brown, who's the ranking member of the Senate Banking Committee. Senator, it sounds like, from a Bloomberg story, that Wells Fargo's CEO is going to tell you that he is deeply sorry and that he has a plan to respond to what happened. Is that a good start?
SHERROD BROWN: Of course you want him to say that, but we want to know how he's going to make these hundreds of thousands - potentially millions - of customers whole. For instance, if a customer was - if an unauthorized account was opened, that customer then gets dinged with a fee that could affect that customer's credit rating, who then is in the process of getting a mortgage and ends up paying $30 or $40 a month more for their mortgages. Is Wells Fargo going to make them whole, is going to find those customers and deal with their - with their credit agency that way - so credit rating? So this is - this is far from over when he just says, I'm sorry; I won't do this again.
GREENE: OK. But if he - if he lays out some specific plan that is making the customers who are affected by this whole, that would be one substantive thing.
BROWN: That's the substantive - I mean, most importantly, he's got to find every customer was hurt - who was hurt and make that person whole. But you also look at the management here. This is the - apparently the highest paid CEO bank - bank CEO in the country. The - most of these 5,200 people that were fired make $14, $15, $16 an hour.
A teller makes $11.80. And then you have the person in charge of this getting over - probably - we're not sure exactly - but $90 to $120 million going away present while she didn't even apparently see or want to tell anybody about these 5,000 - 5,300 firings over a space of five years. So what did the CEO know, and why didn't they do something about this management structure?
GREENE: Well, what can you actually do about the executive who is supposed to get this, you know, all these stock and options when she retires? Because, I mean, correct me if I'm wrong. If I understand it, the board of the company has the power potentially to demand this money back, I mean, as a so-called clawback. But can Congress actually force that?
BROWN: I - Congress could change some of the laws here, but I don't think - not this Congress when banks are so, so powerful on the Senate Banking Committee and the House Financial Services Committee. But in fact, the chairman of this board is John Stumpf, who is the CEO who will appear in front of us today. He could convene the board and recommend clawback of this 100-plus - or hundred give or take $10 million - bonus for Ms. Tolstedt.
So we're going to - I assume somebody will ask him today, is he going to do that? But how do you - you put all the blame on these 5,300 employees who are under great pressure. Some of them quit. So they had to make these decisions, and we'll see what John Stumpf and his board does.
GREENE: Just a couple seconds left. I mean, there were so few actual criminal charges in the whole prime mortgage meltdown. I mean, can you tell Americans that the banking industry really is - I mean, that Congress is keeping tabs on them now or...
BROWN: Well, this may be a case of too big to manage, too big to fail. We don't know. This Congress has done relatively - or literally no oversight on the banking industry in the last couple of years.
GREENE: All right, Ohio Democrat Sherrod Brown, thanks for joining us. Transcript provided by NPR, Copyright NPR.