Sen. Elizabeth Warren, a Massachusetts Democrat, questions Jerome Powell, president of the U.S. Federal Reserve nominee for U.S. President Donald Trump, on the right, during a confirmation hearing by the Senate Banking Committee in Washington, DC , USA, Tuesday, November 28, 2017.
Andrew Harrer | Bloomberg | Getty Images
Senator Elizabeth Warren on Tuesday urged the Federal Reserve to break Wells Fargo, arguing that a series of scandals against the financial security puts consumers at risk.
In a letter to Fed Chairman Jerome Powell, the Massachusetts Democrat asked the central bank’s governing board to use its authority to separate Wells Fargo’s banking unit from its financial services companies. He said the Fed could break Wells Fargo by revoking his license to operate as a financial holding company.
“The Fed has the power to put consumers first and must use it,” Warren wrote. “By invoking its full authority to protect consumers and the financial system and requiring Wells Fargo to separate its consumer-oriented banking bank from the rest of its financial activities, the Fed can ensure that Wells Fargo faces the appropriate consequences. for their long-standing ungovernable behavior “.
Wells Fargo did not immediately respond to a request for comment.
Shares of the company rose less than 1% on Tuesday morning.
Washington has stepped up its scrutiny of Wells Fargo’s practices since the 2016 revelation that the company created millions of bank accounts on behalf of real people without their knowledge or consent. Wells Fargo has paid more than $ 4 billion in fines since the scandal came to light.
The company’s problems didn’t end there. Last week, the Office of the Comptroller of the Currency received a $ 250 million fine from Wells Fargo, saying it violated a 2018 consent order, a measure that requires financial institutions to be able to address violations of the rules. regulators.
Still, Wells Fargo said last week that a 2016 Consumer Financial Protection Consent order related to the fake account scandal had expired. This could indicate a decrease in government pressure on the company.
The Fed put an asset limit on Wells Fargo in 2018.
Warren cited the scandal with false accounts and other practices in Wells Fargo’s insurance and wealth management companies, arguing that the company is an “irrecoverable recidivist” with the “inability to comply with regulatory requirements and deal its consumers with honesty and fairness “.
– Hugh Son of CNBC contributed to this report
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