If the big banks and their lobbyists think they’ll go quietly back into the business of wretched excess and greed that helped bring the nation to the financial brink in 2008, Sen. Elizabeth Warren signaled Tuesday that she’ll be standing in the way. The senator and former Harvard professor who made her reputation – and won her seat in the Senate – based on her knowledge of how greed drives the financial industry, blistered Wells Fargo CEO John Stumpf, who made over $19 million in 2014, as he sat before the Senate Banking Committee.
Wells Fargo recently made a $185 million settlement after authorities reported illegal cross-selling to millions of customers who were enrolled in programs – credit cards, savings accounts, other products – without the customers’ knowledge. Former employees of the bank said they were pressured to sell such things or be fired. It was estimated more than 2 million accounts were involved.
Warren saw the effort as evidence that Wall Street wants to return to the free-wheeling days of old – which ultimately helped lead to the Great Recession. The senator was a strong advocate for the Consumer Finance Protection Bureau, which now offers consumers at least some safeguards against abuse by credit card companies, for one example. Wall Street fought against the agency, and opposed other regulations, and has invested heavily in the political careers of politicians friendly to the idea of loosening what reins there are on the big financial houses.
Warren doesn’t get those checks, and doesn’t want them, and she dunked Stumpf into a baptismal pool of fire Tuesday.
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She told him, “The only way Wall Street will change is if executives face jail time when they preside over massive frauds. Until then it will be business as usual and at giant banks like Wells Fargo, that seems to mean cheating as many customers, investors and employees as they possibly can.”
That was mild, compared with what else she told Stumpf: “This is about accountability. You should resign, you should give back the money you took while this scam was going on and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.”
She also reckoned Stumpf to be an example of “gutless leadership.”
The problem for the CEO, of course, is that while many Republican members of Congress would be happy to take him to dinner and soothe his hurt feelings, an election year isn’t the best time to be seen hanging around with the head of a big bank.