Senate Democrats Press Wells Fargo Board For Answers on Sales Practices

Senate Democrats Press Wells Fargo Board For Answers on Sales Practices

Members of Senate Banking Committee sent letter to bank seeking more information


By:  Emily Glazer

Democrats on the Senate Banking Committee demanded Wells Fargo & Co.’s board respond to questions the bank has yet to answer related to its sales practices scandal, according to a letter reviewed by The Wall Street Journal.

The senators asked the board for more information about its continuing independent investigation of the alleged fraud that caused the bank to pay a $185 million settlement in September over opening as many as 2.1 million accounts using fictitious or unauthorized customer information.

The senators in this latest letter also asked the board for a timeline of when its members learned of the questionable sales tactics, actions the board took to address the problemand reasons why it didn’t investigate sooner, according to the letter. It asked for answers to its 10 questions by Jan. 7.

“Continued failure to answer questions—especially basic questions—about the causes and consequences of the fraud that Wells Fargo permitted for many years does nothing to restore the trust of Wells Fargo’s customers and shareholders, many of whom are our constituents,” according to the letter.

Wells Fargo’s board in late September announced its independent investigation alongside moves to rescind a collective $61 million in pay from now-former Chief Executive John Stumpf and former retail banking head Carrie Tolstedt.

The board’s independent directors “will take such other actions as they collectively deem appropriate,” according to a statement at the time. The bank neither admitted nor denied the allegations in the settlement Sept. 8.

The 10 Democratic senators, led by ranking member Sen. Sherrod Brown (D., Ohio), submitted 58 questions to Wells Fargo management on Sept. 29 that they said weren't answered by Mr. Stumpf in two congressional hearings. The bank responded on Nov. 15, but cited the board’s continuing independent investigation as a reason it couldn’t fully answer some questions.

A bank spokeswoman at the time said Wells Fargo appreciates Congress’s role and will continue to be responsive to lawmakers as the bank’s board investigation progresses.

A person familiar with the board said Thursday that it previously responded to earlier letters from some of the Democratic senators that included some of the same questions.

A spokesman for the board reiterated Thursday that the board would make the findings of the investigation public upon its conclusion.

In addition to Sen. Brown, the latest letter was jointly submitted by Sens. Jack Reed (D., R.I.), Bob Menendez (D., N.J.), Jon Tester (D., Mont.), Mark Warner (D., Va.), Jeff Merkley(D., Ore.), Elizabeth Warren (D., Mass.), Heidi Heitkamp (D., N.D.) and Joe Donnelly (D., Ind.).

They asked the board to identify members of the special committee who are leading the investigation and the criteria to select them, why the board didn’t launch an independent investigation earlier, and the probe’s scope.

The senators also sought details on how the board will provide “sufficient transparency into and details of” the investigation to stakeholders and the public, among other questions relating to the sales practices issues.