Warren says the Fed must break the “recidivist” Wells Fargo

WASHINGTON, Sept. 14 (Reuters) – U.S. Sen. Elizabeth Warren on Tuesday called on the Federal Reserve to separate Wells Fargo & Co (WFC.N), arguing that the latest fine against the bank proves it is a ” unrecoverable recidivist “.

In a letter to the Fed, Warren urged the central bank to revoke Wells Fargo’s financial holding status and order the sale of its investment banking and non-banking activities, citing the bank’s years of struggle. to address regulatory shortcomings.

“Wells Fargo is simply ungovernable,” he said in the letter, the latest in his long campaign against the bank, which has been repeatedly sanctioned by regulators for various issues.

Warren, an unsuccessful candidate for the 2020 Democratic presidential candidacy, is on the Senate banking committee.

The bank has paid fines of more than $ 5 billion and the Fed has put an unprecedented asset cap on potentially selling millions of fake accounts to customers, among other issues, in a series of long-running scandals that led to the dismissal of two separate chiefs. executives.

A Fed spokesman said the central bank had received the letter and planned to respond to it. In a statement, Wells Fargo said meeting regulatory expectations for control and risk control “remains Wells Fargo’s top priority” and said “significant progress” had been made.

Warren’s letter comes days after Wells received a $ 250 million fine from the Office of the Currency Controller, which punished the bank for failing to properly reimburse customers who had been charged inappropriate commissions or excessive. Read more

In a separate letter to the bank’s board, Warren pressed for details on the compensation of current CEO Charles Scharf, including the amount that was based on the bank’s ability to address regulatory shortcomings. He also asked for details on the bank’s timeline for resolving issues, noting that Scharf has been at the bank for almost two years.

“You owe your customers, investors and regulators an explanation for Wells Fargo’s continued inability to comply with legal and regulatory requirements,” he wrote.

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