Sen. Elizabeth Warren (D-Mass.) called Monday for the removal of a dozen Wells Fargo board members over the controversy involving fraudulently opened accounts, according to a CNBC report
Warren called on Federal Reserve Chairwoman Janet Yellen to remove the 12 board members, saying the bank has the power to do so under federal law.
“I urge you to use the tools Congress has given you to remove the responsible board members and protect the continued safety and soundness of one of the country’s largest banks,” Warren reportedly wrote in the letter sent Monday.
{mosads}In September 2016, it came to light that Wells Fargo employees had set up fake accounts for many customers, racking up unauthorized fees.
Warren said those actions hurt the bank’s customers, costing them money and lowered credit scores. She said such risky management practices warranted the “removal of all responsible board members.”
”The scandal also revealed severe problems with the bank’s risk management practices — problems that justify the Federal Reserve’s removal of all responsible Board members,” the Democratic lawmaker continued.
Wells Fargo agreed to pay a $185 million fine to settle claims from the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Los Angeles city attorney that employees had opened more than 2 million bank accounts without customer’s knowledge or permission from May 2011 until July 2015.
Employees were reportedly opening these accounts in order to “satisfy sales goals and earn financial rewards under the bank’s incentive-compensation program,” according to the Los Angeles city attorney.
About 5,300 employees were fired as a result of the allegations and the bank announced early in 2017 that the employee sales goals program — which many pointed to as partly a motivating factor — would end.
“Wells Fargo’s board and management team have taken many actions in response to its retail sales practices issues, including changes in senior leadership, executive accountability actions and numerous steps to ensure we make things right with any customer affected by unacceptable sales practices,” said a Wells Fargo spokesperson in a statement to The Hill. “That work continues and remains a core part of our efforts to build a better Wells Fargo for the future.”
A Fed spokesman confirmed to CNBC that they received the letter and said they intend to respond.
CNBC reported that in order for the Fed to take action, there would need to be evidence that the actions of an individual board member, or members, were risky.
This story was updated at 5:15 p.m.