OCC should speak up on Wells Fargo's exec changes: Warren
WASHINGTON — Sen. Elizabeth Warren is keeping the pressure on the Office of the Comptroller of the Currency over its oversight of Wells Fargo following the departure of the beleaguered bank's CEO.
In a letter to Comptroller Joseph Otting, the Massachusetts Democrat took issue with the OCC apparently not exercising its authority — in the case of Wells — to object to candidates for senior positions at troubled institutions.
“Under federal law, underperforming financial institutions must give the OCC the opportunity to object before making changes to their senior leadership, such as hiring new board members and senior executive officers,” Warren said. “The OCC, however, has systemically exempted Wells Fargo from this requirement — raising questions about the agency's willingness to hold the bank accountable for its misdeeds.”
Warren suggested that the OCC could have more effectively scrutinized the bank's promotion of Tim Sloan to succeed John Stumpf as Wells Fargo CEO following the revelation of the bank's fake-accounts scandal. Sloan was the target of persistent congressional criticism as subsequent consumer protection scandals came to light. The bank announced Sloan's departure in March.
Warren cited consent orders issued against Wells Fargo in 2015 and 2016, in which the OCC exempted it from requirements for troubled banks to get approval by the regulator to make changes to directors and senior executive officers.
“Had the OCC conducted a review of Mr. Sloan's ‘competence, experience, character, or integrity,’ it may have concluded that Mr. Sloan's tenure as a high-ranking Wells Fargo executive — including serving as the head of the bank's Wholesale Banking business from 2014 to November 2015 while the bank failed to comply with anti-money laundering laws — disqualified him from becoming CEO at a time when Wells Fargo was in need of drastic reform,” Warren said.
Warren is asking whether the OCC plans to conduct a review of the next CEO and president of Wells Fargo at the conclusion of the bank’s search.
She also inquired why the OCC exempted Wells Fargo from the executive approval process in its 2015 and 2016 consent orders, and whether the regulator believes that the appointment of Sloan as CEO was in the best interest of Wells Fargo's depositors and the public.
She is also asking for details on the factors the OCC considers in assessing an individual’s “competence, experience, character or integrity,” and what would potentially disqualify someone to serve as a senior executive or board member.
Additionally, Warren is asking how many enforcement actions the OCC has taken against its regulated institutions for every year since 2000, and how many of those firms were either exempted or subjected to the requirement that the OCC approve or disapprove changes in its senior leadership.
Warren is asking for the OCC to respond to her inquiry by May 1. A spokesperson for the OCC said the agency does not comment on congressional correspondence.