WASHINGTON Nov 21 The U.S. government should go
after payouts to former Wells Fargo & Co executives
involved in a scandal over unauthorized accounts now that a
federal regulator has said it has the power to do so, lawmakers
said on Monday.
The San Francisco-based bank reached a $190 million
settlement with federal regulators after admitting employees
opened as many as 2 million accounts without customer consent.
That September deal allowed Wells Fargo to make "golden
parachute" payments to departing executives. But on Friday, the
Office of the Comptroller of the Currency, which oversees many
federal banks, voided those terms.
On Monday, two leading Democratic lawmakers urged the OCC to
move ahead and revoke compensation to relevant executives.
"Bank executives shouldn't get golden parachutes while
employees making $12 an hour get shown the door," U.S. Senator
Sherrod Brown of Ohio told Reuters in a statement.
Brown, the most senior Democrat on the Senate Banking
Committee, has said Wells Fargo scapegoated low-paid tellers in
the scandal while bank bosses escaped blame. Wells Fargo fired
5,300 workers over the course of five years that the fraud
"The OCC and all federal watchdogs shouldn't give banks that
cheat a free pass," he said.
U.S. Senator Mark Warner of Virginia also urged the
regulator to go after former executives with all its authority.
"I am encouraged that the OCC has now positioned itself to
take appropriate action, and I would strongly urge them to do
so," he told Reuters in a statement.
On Saturday, Wells Fargo's chief executive, Tim Sloan, wrote
employees that the bank would "comply with the revised
requirements and continue to cooperate with the OCC."
A Wells Fargo spokesman cited that memo when asked for
comment on Monday.
Last week's move was a reversal for the OCC, which had
stopped short of imposing the toughest controls on executive
payouts in its original settlement with Wells Fargo.
The San Francisco-based bank "is not subject to the
limitation on golden parachute and indemnification payment,"
according to the September accord.
On Friday, the OCC said that it had "revoked" that earlier
exemption for Wells Fargo, allowing it to keep a check on
executive payouts, new bank leaders and other controls.
An OCC official declined to say what steps the regulator
would take next. The agency also declined to say why it had
initially offered Wells Fargo an exemption or what prompted the
The regulator often waives its authority over "golden
In 2014, for instance, the OCC sanctioned Bank of America
and Citibank but exempted the lenders from those controls,
according to a Reuters review of enforcement paperwork.
Bank of America Corp and Citigroup Inc both
declined to comment.
Following the settlement, lawmakers held hearings where they
grilled then-CEO John Stumpf about Wells Fargo's sales practices
and corporate culture. He resigned in October.
Stumpf and Carrie Tolstedt, the former head of retail
banking, relinquished about $60 million in stock compensation in
the aftermath of the scandal. But the pair also stood to take
home more than $350 million in compensation, according to a
Reuters review of filings.
Stumpf and Tolstedt could not be immediately reached for
Wells Fargo has said that it might try to recoup some of
Tolstedt's compensation - but only after the firm has completed
an internal investigation.
(Reporting By Patrick Rucker in Washington and Dan Freed in New
York.; Editing by Lauren Tara LaCapra and Jonathan Oatis)