WASHINGTON (Reuters) – U.S. Senator Elizabeth Warren said on Thursday the Federal Reserve should not allow Wells Fargo & Co (WFC.N) to grow in size until the bank replaces Chief Executive Officer Tim Sloan.
FILE PHOTO: Wells Fargo & Company CEO and President Tim Sloan testifies before the Senate Banking Committee on Capitol Hill in Washington, U.S., October 3, 2017. REUTERS/Aaron P. Bernstein/File Photo
In a letter to Fed Chairman Jerome Powell, Warren said Sloan, a 30-year veteran of Wells, is “deeply implicated” in prior bank misconduct, and it is untenable for him to remain at the bank as the Fed seeks a drastic overhaul of its operations.
“The Wells Fargo Board of Directors cannot plausibly claim that it is ‘ensuring senior management’s ongoing effectiveness in managing the firm’s activities’ while retaining a CEO that helped oversee this much misconduct,” she wrote.
The Fed took the unprecedented step of ordering the bank to keep its assets below $1.95 trillion in February, saying it had prioritized growth at the expense of proper compliance and risk management. The bank now must convince the Fed it has sufficiently overhauled its policies before it is permitted to grow in size. [L2N1PS2FA]
Warren has called for Sloan’s removal in the past, and she cannot force the Fed to take such a step. But her letter indicates she is ramping up her efforts to oust Sloan.
A Fed spokesman said the agency has received the letter and will respond. Wells Fargo did not immediately respond to a request for comment.
Reporting by Pete Schroeder; Editing by Jeffrey Benkoe and Alistair Bell