Warren has sent a letter to Federal Reserve Board Chairman Jerome Powell urging him to maintain the Fed's punitive growth restrictions on Wells Fargo until the bank replaces CEO John Sloan with, in the senator's words, “someone who is not deeply implicated in the bank's misconduct.”
Sloan served as Wells Fargo's chief operating officer (COO) before being elevated to CEO, replacing John Stumpf, who took early retirement following the 2016 revelation that Wells Fargo employees had opened millions of checking and credit card accounts without customers' knowledge or consent.
In response the Fed placed restrictions on the bank, including limits to how quickly, and to what extent it could grow.
Follows bank’s positive earnings report
Warren's letter follows last week's third quarter earnings report, showing Wells Fargo earned more revenue than expected during the period, even as its bottom line came in slightly softer than expected. On a conference call with analysts last week, Sloan said the results reflect the positive changes the bank has been making.
The Fed issued an order in February telling Wells Fargo it would not be permitted to get any larger until it improved its internal controls. In her letter to Chairman Powell, Warner argued those changes will not happen until there is a change at the top.
Bank confident it’s meeting requirements
In a statement to the media, Wells Fargo said it continues to have a “constructive dialog” with the Fed and is working to satisfy its obligations under the consent order. A spokesman said the bank is confident that it is meeting its requirements.
"Mr. Sloan's long track record at the bank demonstrates little ability to 'effectively manage the firm's activities' - and should give the Federal Reserve little confidence that he can help transform the bank's culture and operations as the Cease and Desist Order requires," Warren wrote in her letter.
"To effectively enforce the requirements in the February 2, 2018 Cease and Desist order, the Federal Reserve should not remove the growth cap on WFC until the Board replaces Mr. Sloan with a new CEO who has not contributed to the very problems the Federal Reserve is seeking to fix," the letter continued.
In the wake of the 2016 scandal Warren not only pushed for the removal of Stumpf as CEO but also urged the Fed to remove 12 members of the bank's board of directors. She renewed that call in July 2017 when it was revealed as many as 800,000 auto loan customers were sold insurance they didn't need.
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