Federal officials announced Thursday that John Stumpf, the former head of Wells Fargo, has been barred from ever working for a bank due to his connection with its cross-selling scandal.
“The actions announced by the [Office of the Comptroller of Currency] today reinforce 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,” stated Comptroller of the Currency Joseph Otting in a release.
Along with Stumpf, eight former executives were fined for their role in sales fraud. Included was the former Head of the Community Bank Carrie Tolstedt, who could face penalties of nearly $25 million. Stumpf has agreed to a $17.5 million penalty.
Charlie Scharf, Wells Fargo’s new CEO and President, called the action by former employees “inexcusable.”
“The OCC’s actions are consistent with my belief that we should hold ourselves and individuals accountable. They also are consistent with our belief that significant parts of the operating model of our Community Bank were flawed,” Scharf said. “At the time of the sales practices issues, the Company did not have in place the appropriate people, structure, processes, controls, or culture to prevent the inappropriate conduct … Our customers and you all deserved more from the leadership of this Company.”
Scharf added that Wells Fargo has made “fundamental changes” to its business model, compensation programs, leadership, and governance.
“We are committing all necessary resources to ensure that we operate with the strongest business practices and controls, maintain the highest level of integrity, and have in place the appropriate culture. The Company is different today, but we know we still have significant work to do to regain the trust of all stakeholders,” he said.
The bank was fined $100 million in 2016 over the practice over employees opening fake accounts to receive sales bonuses.
A CFPB release from September 2016 states Wells Fargo employees “secretly opened” unauthorized accounts to hit sales goals.
“Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed,” former CFPB Director Richard Cordray said in the release.