Senate calls Stumpf to account for bogus accounts

America’s least favorite banker du jour, Wells Fargo chief John Stumpf, is slated to appear in front of a Senate banking committee on Tuesday to “explain” how his bank did not know about the 5,200 employees that he fired were ripping off customers.

Wells Fargo settled civilly with federal regulators on a $185 million fine earlier this month for opening 2 million fake bank accounts and 565,000 fake credit card accounts for customers — reaping about $2.6 million in fees. The bank didn’t admit any wrongdoing as part of the settlement.

Stumpf will say that the bank did have an incentive program for these employees to open new accounts, but upper management did not know they were opening more dummy accounts than actual ones for their customers.

Stumpf will also have to defend the $125 million bonus paid to Carrie Tolstedt, who headed the troubled banking division and announced her retirement in June.

How no one in management at the bank was fired is troubling, but to be rewarded so generously is astonishing.

The CFO for Tolstedt’s division was allowed to take a 6 month leave of absence on Friday.

It will be interesting to see how Sen. Elizabeth Warren questions Stumpf. Warren has been a harsh critic of Wall Street, but let’s see if she was gotten to by Wells Fargo’s lobbyists.

Let’s hope we hear that the Justice Department is looking into criminal charges.


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