OCC fines former Wells Fargo CEO $17.5M, bans him from banking industry
Compliance Week - Lori Tripoli - 1/24/20
The Office of the Comptroller of the Currency (OCC) banned former Wells Fargo Bank CEO John Stumpf from participating in the banking industry Thursday.
In settling with the OCC, Stumpf also agreed to pay a $17.5 million civil penalty to resolve longstanding problems during his tenure at the bank. Stumpf reached his deal with the OCC without admitting any wrongdoing.
By taking action against Stumpf and other former executives at Wells Fargo, the OCC is reinforcing “the agency’s expectations that management and employees of national banks and federal savings associations provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations,” said Comptroller of the Currency Joseph Otting in a press release.
Others caught up in ‘systemic problems’
At the time the OCC disclosed its arrangement with Stumpf, it also announced settlements with Hope Hardison, former chief administrative officer and director of corporate human resources at Wells Fargo, and Michael Loughlin, former chief risk officer at the bank. Hardison agreed to pay a $2.25 million penalty, and Loughlin is on the hook for $1.25 million.
In addition, the OCC issued a notice of charges seeking to fine Carrie Tolstedt, the former head of the community bank at Wells Fargo, and four others—former General Counsel James Strother, former Chief Auditor David Julian, former Executive Audit Director Paul McLinko, and former Community Bank Group Risk Officer Claudia Russ Anderson. The OCC maintains Russ Anderson also “actively obstructed” examination of the bank’s sales practices and made “false and misleading” statements to the OCC.
The OCC’s actions stem from the executives’ alleged failure to “adequately perform” their jobs, which, in turn, “contributed to the bank’s systemic problems with sales practices misconduct” from 2002 through 2016, the OCC wrote.
Calling the OCC’s actions “a step toward accountability” at Wells Fargo, Patrick Creaven, a communications associate at the bank as well as a member of the Committee for Better Banks, said the government’s charges “will not bring justice for employees who were unfairly scapegoated, or change the corrupt system in place at Wells Fargo that fueled the disastrous sales scandal of 2016 in the first place.”