A group of five Democratic U.S. senators has demanded to know whether Wells Fargo—recently slapped by regulators with a $185 million fine for creating millions of unauthorized bank and credit card accounts, racking up fees for consumers and bonuses for employees—intends on rescinding compensation to executives behind the “staggering fraud.”
In their letter (pdf) sent Thursday to Wells Fargo chairman and CEO John G. Stumpf, Elizabeth Warren (Mass.), Sherrod Brown (Ohio), Jack Reed (R.I.), Robert Menendez (N.J.), and Jeff Merkley (Ore.), all members of the Republican-led Senate Banking Committee, ask whether the bank will invoke its clawback provision, “designed to prevent exactly what happened with Ms. Toldstedt: shareholders and consumers bearing the burden of bank misconduct while senior executives walk away with multi-million dollar awards based on what the company later finds out are fraudulent practices.”
That’s Carrie Tolstedt, the former senior executive vice president of community banking, the division that led the fraudulent incentive-compensation program.
The senators write that Tolstedt
Following her retirement announcement, Stumpf praised Tolstedt as “a standard-bearer of our culture” and “a champion for our customers.” CFPB head Richard Cordray, meanwhile, denounced the unit she led, saying it committed “unfair and abusive practices under federal law.”
The senators demand an answer about the clawback by Sept. 19, the day before Stumpf is scheduled to testify before the committee.
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