The Wall Street Journal ran a story on Monday about big banks bracing for a “browbeating” by Sen. Elizabeth Warren, the Massachusetts Democrat who’s exploring running for president.
She didn’t disappoint.
On Monday morning, Warren outlined the reasons she wants Wells Fargo
to dismiss its CEO, Timothy Sloan.
Over Twitter, Warren launched a tweetstorm based on an interview Sloan did with Jim Cramer, in which the bank CEO said he didn’t have an informed opinion about her.
Warren says she has an informed opinion about the executive — noting first that as CFO and COO during the fake-account scandal that rocked Wells Fargo, Sloan “helped enable it.”
Wells Fargo also charged more than 800,000 people who took out car loans with auto insurance they didn’t need and it didn’t provide refunds to thousand who paid off those loans early. The bank also blamed a calculation error for more than 500 customers who lost their homes, had to pay $175 million to settle claims it charged minority borrowers higher fees and has been charging more than rivals for bank products to students. Warren retweets all of these findings, posting news stories about the bank’s settlement with regulators, videos of Senate testimony and correspondence with the Federal Reserve.
I could go on but I don’t need to: it’s clear that Tim Sloan isn’t the right person to try to clean up @WellsFargo. His hands are too dirty from overseeing years of scams and scandals.
That’s not just an “informed” opinion. That’s a fact.
— Elizabeth Warren (@SenWarren) January 28, 2019
In a statement, Wells Fargo defended its CEO.
“Over the last two years, CEO Tim Sloan, with the full support of the Wells Fargo board of directors, has been leading a transformational change at the company. Since November 2016, under Tim’s direction, the company has undergone an extensive review process and has been working diligently to address and resolve the problems of the past, take care of our customers promptly and fairly, and transparently describe our progress,” the statement read. “Organizationally, he has been streamlining the company’s operating structure, adding new leaders in key positions, enhancing how we serve customers, focusing on customer-friendly innovation, strengthening risk and compliance measures, and improving the culture at Wells Fargo. We will continue to provide all our stakeholders, including lawmakers, with comprehensive information on the transformation at Wells Fargo.”
Wells Fargo shares fell 1.7% on Monday, about in line with the broader stock market
. Over the last 52 weeks, Wells Fargo shares have slumped 25%.
The bank still is limited by an unprecedented Federal Reserve consent order — arguably done after pressure from Warren — that restricts its ability to grow assets until the central bank signs off on measures to improve the lender’s risk oversight and control. When the Fed imposed the order in February 2018, Wells Fargo said it anticipated meeting its requirements by the end of last year, which so far it hasn’t been able to do.
On a conference call earlier this month, Sloan said the bank anticipates being under the asset cap for all of 2019.
“In order to have enough time to incorporate this feedback in our plans in a thoughtful manner and adopt and implement the final plans as accepted by the Federal Reserve and complete the required third-party reviews, we’re now planning to operate under the asset cap through the end of 2019,” he told investors.
“Making the changes necessary to not only meet but to exceed regulatory expectation remains a top priority, as is continuing to serve our customers and help them succeed financially. We believe that we can achieve both of these priorities, while we operate under the asset cap, and our growth in both loans and deposits in the fourth quarter demonstrated our ability to do so.”