Senator Raises Concerns That Recent Fed Proposed Guidance Undermines Bank Boards’ Ability and Obligation to Stop Misconduct
Text of the letter available here (PDF)
Washington, DC – Senator Elizabeth Warren (D-Mass.) today wrote a letter renewing her call for the Federal Reserve (Fed) to remove Wells Fargo Board of Directors members who served between May 2011 and July 2015. The senator’s request comes amid new evidence that the bank failed to refund money owed to car loan customers, that it overcharged small businesses for credit card transactions, and that it billed certain mortgage customers for unexpected optional services.
“Between 2011 and 2015, Wells Fargo seems to have had an almost limitless capacity to cheat its customers and shirk its regulatory responsibilities. Yet a dozen Board members from that period continue to serve today,” Senator Warren wrote.
Senator Warren once again called on Chair Yellen to use the Fed’s existing authority to remove the 12 Wells Fargo Board members who served from 2011 to 2015. She also raised concerns about a Fed proposal from earlier this month that could reduce the supervisory responsibilities for bank board members. As part of the proposed change, the Fed would stop sending bank boards most supervisory findings, instead initially providing the information only to senior management.
“If bank boards lack independent access to key supervisory findings, they can more easily be misled by senior management – and more easily plead ignorance when asked to account for their actions,” wrote Senator Warren. She noted that the proposal was particularly troubling in light of the events at Wells Fargo, where senior managers downplayed the extent of the fake-accounts scandal in their reports to the board.
The senator’s letter requests that Chair Yellen provide an update on the Fed’s review of misconduct at Wells Fargo, and asks for information about the Fed’s recent proposal.
Read a PDF copy of the letter here.