Wells Fargo CEO Scharf Faces Escalating Scrutiny Over Anti-Union Position and Racial Disparities Amid Regulatory Probe
The combined recent criticism from a prominent U.S. senator and New York City's comptroller underscores the growing scrutiny surrounding Wells Fargo's practices, urging the bank to address racial disparities in lending and to reconsider its stance on workers' rights during ongoing unionization efforts.
“Annual Oversight of Wall Street Firms”
On December 6, 2023 U.S. Senator Sherrod Brown (D-OH), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, delivered the following message to the CEOs of the largest American banks, including Wells Fargo CEO Charlie Scharf, during the hearing entitled, “Annual Oversight of Wall Street Firms:
“Your banks need to do far better when it comes to meeting customers where they are and recognizing their dignity of work, your employees and your customers. You should be cutting prices for consumers, increasing opportunities for your employees and increasing diversity with your executive ranks, and supporting your workers’ efforts, if they so choose, to unionize.”
Sen. Brown went on to question Scharf directly on whether Wells Fargo will respect its employees rights to organize a union:
SEN. BROWN: Mr. Scharf, American support for unions as we’ve discussed is at a half century high. Unions help ensure that workers share in a company’s success through better pay, better benefits, control over their schedules, and greater stability to their personal and professional lives. Workers at two Wells Fargo branches will be voting to unionize this month, dozens of other union organizing drives are in the works. Wells Fargo’s recent scandals highlight the pressure overworked, underpaid workers at short-staffed branches face. One worker said “the executives don’t have to deal with the consequences of their decisions in a direct sense, but we do.” Mr Scharf - I appreciate your willingness to talk one-on-one about this with me. I remain concerned about Unfair Labor Practices and reports that Wells Fargo has geared up in response to the union campaign. Will you remain neutral as these employees vote to organize?
SCHARF: Chairman Brown, I agree with your sentiment about the importance of the workforce and our employees, and as you know we’ve done a tremendous amount to support them and will continue to do that. We believe that it's best we have a direct relationship with those employees and we do intend to exercise our right to speak with them to make sure they make an informed decision.
BROWN: It was an opportunity to show the American public truly a new day at Wells Fargo and I'm sorry you failed to show that real change is afoot at your bank.
Consumer Financial Protection Bureau Probe
In the wake of a Consumer Financial Protection Bureau (CFPB) probe into Wells Fargo's lending practices, New York City Comptroller Brad Lander has issued a scathing critique of the bank, particularly targeting CEO Charles Scharf:
“I’m deeply disappointed, but unfortunately not surprised, to hear that Wells Fargo is being probed by the Consumer Financial Protection Bureau for racially disparate lending practices in how it distributes discounts and more favorable rates for home loans.”
Lander also expressed support for the Wells Fargo union drive:
“This report comes on the heels of Wells Fargo CEO Charles Scharf announcing the company would not stay neutral in union drives, anti-union behavior that may violate workers’ rights. Our city and our economy are better off when workers’ rights to freedom of association are respected and borrowers are treated fairly.”