Regulators to Dems: We are not satisfied with Wells Fargo

Register now

WASHINGTON — Federal regulators have reiterated their concern to Senate Democrats about the pace of Wells Fargo's progress to improve its risk management and corporate governance.

In letters to Sens. Sherrod Brown, D-Ohio, and Elizabeth Warren, D-Mass., the heads of three agencies said they are still unsatisfied with Wells' steps to correct flaws following a series of scandals that hit the bank.

“I can tell you that while the Bureau is working with Wells Fargo to ensure its compliance with the consent order, I am not satisfied with the Bank’s progress to date and have instructed staff to take all appropriate actions to ensure the Bank complies with the consent order and Federal consumer financial law,” Kathy Kraninger, director of the Consumer Financial Protection Bureau, said in a letter dated April 5. “Broadly speaking, I consider all options on the table for enforcing Bureau consent orders.”

Letters were also sent by Federal Reserve Chairman Jerome Powell and the comptroller of the currency, Joseph Otting.

Otting's April 3 letter said his agency "is fully engaged and prepared to ensure Wells Fargo corrects the identified deficiencies, remediates identified harm to its customers, and operates in a safe and sound manner going forward.”

Powell said the Fed would not remove a growth cap it imposed on Wells Fargo more than a year ago until the bank fixes its risk management shortcomings.

“I want to reiterate that we do not intend to lift the asset cap imposed on Wells Fargo until remedies to address the risk management breakdowns that the Order was meant to address have been adopted and implemented to our satisfaction,” Powell told the lawmakers in a letter dated April 3.

The letters come less than a month after Wells CEO Tim Sloan testified to the House Financial Services Committee. He abruptly announced plans to exit the troubled bank about two weeks later.

Warren had previously urged Powell not to lift the growth cap until CEO Tim Sloan was removed.

In a press release, the senators said the regulators need to ensure that Wells Fargo is held accountable.

“Scandal after scandal has shown that Wells Fargo has to be rebuilt from the ground up before regulators, Congress, and the American people can trust it again,” Warren said. “The OCC, the Fed, and the CFPB need to do their jobs and hold Wells Fargo accountable until the bank rights all wrongs, including making every single person they harmed whole.”

For reprint and licensing requests for this article, click here.