Warren’s push marks a climb in his long campaign to celebrate Wells Fargo (WFC) is responsible for snatching customers.
“Every day that Wells Fargo continues to maintain these deposit accounts is a day when millions of customers remain at risk of additional negligence and intentional fraud,” Warren wrote in a letter sent Monday to Federal Reserve Chairman Jerome Powell. The New York Times first reported the letter.
Warren urged the Fed to revoke Wells Fargo’s status as a financial holding company and demand that the company separate its traditional banking activities from non-banking activities. In fact, that would break with one of the nation’s largest lenders. Warren noted that the Banking Companies Act requires that financial corporations be “well-capitalized” and “well-managed”.
“The only way these consumers and their bank accounts can be kept safe is through another institution, one of which the business model does not depend on the scam of customers for every last penny they can get. “Warren wrote. “The Fed has the power to put consumers first and must use it.”
A Fed spokesman said the central bank received the letter and plans to respond to it.
Without responding directly to Warren’s letter, Wells Fargo issued a statement detailing the various regulatory hurdles it has removed in recent years and the milestones it has achieved since it was examined for its various scandals.
“Meeting our own risk management and control expectations, as well as those of our regulators, remains Wells Fargo’s top priority,” the company said in a statement. “Today we are a different bank than we were five years ago because we have made significant progress.”
The push comes after regulators fined Wells Fargo $ 250 million due to “significant shortcomings” in the bank’s mortgage lending practices and slow progress in returning customers.
“Wells Fargo has not met the requirements of the 2018 OCC action against the bank. This is unacceptable,” Michael Hsu, the currency’s auditor, said in a statement last week.
In her final act as Fed chairwoman, Janet Yellen-led Fed imposed an unprecedented asset limit on Wells Fargo in early 2018, citing the bank’s “widespread abuses”.
Warren fired a separate letter to Wells Fargo’s board of directors, which lashed out at CEO Charlie Scharf and called on directors to hold executives accountable. Scharf joined Wells Fargo in late 2019. “It is unattainable that Mr Scharf has been so well compensated as he has failed to address the company’s‘ top priority ’for the past two years.
Warren’s call for harsh sanctions against Wells Fargo is not the first time progressives have pushed regulators to break the bank.
“I have come to the conclusion that Wells Fargo should be broken,” Democratic Congresswoman Maxine Waters said during a 2016 hearing on the fake accounts scandal. “It’s too big to handle and I’m moving forward to break the bank.”
Although regulators have imposed sanctions on Wells Fargo and senior management has become, the bank remains intact.
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