WASHINGTON — Democratic lawmakers are calling for Wells Fargo Chief Executive John Stumpf to testify before a Senate panel as part of an investigation into nearly 2 million fraudulent bank and credit card accounts that Wells employees opened in an effort to meet sales incentives.
"The magnitude of this situation warrants thorough and comprehensive review," Sen. Bob Menendez D-N.J., wrote in a letter to Senate Banking Committee Chairman Richard Shelby.
The letter was signed by the ranking member of the committee, Sen. Sherrod Brown, D-Ohio, along with other panel members Sens. Elizabeth Warren, D-Mass., Jack Reed, D-R.I., and Jeff Merkley, D-Ore.
The letter also said the investigation should include testimony from Los Angeles County Attorney Mike Feuer, Consumer Financial Protection Bureau Director Richard Cordray and Comptroller of the Currency Thomas Curry. All three regulators helped secure the $190 million the bank will pay to settle the charges that were announced last Thursday.
Not only is the settlement a black eye for Wells, but it will also fortify CFPB's supporters who have been defending the agency against Republicans who believe the agency has too much power and autonomy. It may also increase regulatory scrutiny of corporate culture within large banks, a concern recently voiced by Federal Reserve Board Gov. Daniel Tarullo.
"Thursday's announcement is yet another indication that the CFPB is making consumer financial markets safer for consumers and protecting hard-working American families from abusive financial practices," the letter said.
The regulators' investigation found that the misconduct was pervasive and led to the bank firing roughly 5,300 employees who opened accounts between 2011 and 2014 on behalf of customers without their knowledge and led to millions of dollars in fees.
"Specifically, the committee should thoroughly examine this issue, including: how it is possible that more than 5,000 employees could bilk customers over the course of five years; the timing, extent, and disposition of customer complaints; whether Wells Fargo's sales and compensation structure incentivized employees to engage in deceptive and abusive practices; and what additional safeguards may be needed to prevent this type of behavior," the letter said.
In a CNBC interview Friday after the settlements' announcement, Tarullo said, "I don't think [bank culture has] changed enough, and I think we see evidence of that in our own supervisory work."
Congress is working on a condensed calendar because of the November elections and is in session until the end of September before returning for another shortened session in mid-November.