Elizabeth Warren Asks the Fed to Break Up Wells Fargo

https://www.nytimes.com/2021/09/14/business/wells-fargo-elizabeth-warren.html

Senator Elizabeth Warren says Wells Fargo has run out of time to fix the many internal problems that have harmed its customers.

In a letter to the Federal Reserve chair, Jerome H. Powell, on Monday, Ms. Warren asked the Fed to force the financial giant to break off its core banking activities, like offering checking and savings accounts and loans, from its other financial services.

Divorcing Wall Street-centric work — which can include managing investment funds and providing financial market sales and trading services — from the bank would ensure that Wells Fargo’s everyday customers did not continue to suffer, Ms. Warren wrote. The Fed could accomplish this, she explained, by revoking Wells Fargo’s financial holding company license — essentially making it impossible for the company to operate any nonbanking businesses.

“Continuing to allow this giant bank with a broken culture to conduct business in its current form poses substantial risks to consumers and the financial system,” she wrote.

It’s the first time that Ms. Warren, a Massachusetts Democrat, has made such a request to a regulator. If the Fed granted it, Wells Fargo would somehow have to shed dozens of nonbank subsidiaries.

A Fed spokesman confirmed that the letter had been received.

Wells Fargo has spent years trying to right its standing with regulators and lawmakers after a cascade of disclosures of misconduct by the bank against its customers. It admitted to opening accounts in their names without their knowledge, forcing them to buy unnecessary insurance and charging them unwarranted mortgage fees.

Last week, federal regulators announced another set of fines and restrictions on the bank, stemming from the its inappropriate handling of some of its home loan customers’ portfolios. The Office of the Comptroller of the Currency found that Wells Fargo’s management of its mortgage accounts had been so sloppy that it might have improperly foreclosed on some borrowers’ homes. The regulator fined the bank $250 million, ordered it to halt some foreclosures in progress and gave it five months to get its management systems on track.

Comment! It's anonymous!

50 replies (most recent on top)

Hey Liz…How about Wells Fargo gets broken up right after Congress passes term limits? Seems like an equitable arrangement.

How many more training classes on Develop You will we now need to take? Yep, it is CYA time again.

@1adm+
What do you know, you don't even work here troll. Go away.

“Working hard” doesn’t matter. Results matter.

Throwing 11000 people at Risk didn’t achieve anything, it’s clear that entire businesses do not comply with laws or properly manage risks.

The company needs to sell branches, sell the advisory and IB, clean out middle management aggressively and jettison Scharf and friends. He’s done NOTHING but demoralize employees and drive out competent people with more choices.

@rap+1cPFK9Pz, are you a college professor or US Senator?

You work at a bank, doing what?

Not in the executive suite, but you mock someone who's done more than you in life because you are insecure.

Try bringing your knowledge to the marketplace of ideas and let's see what you got.

But you got nothing except insults.

Sad.

so much for hiring Bill Daley

She is crying Wolf. Charlie can keep his job. Attacking Wells will always be a bullet point on her resume.

So many insults, so few (none) examples of why she's wrong.

No wonder Wells is in so much trouble, it's mostly just complainers and trolls with no solutions.

Her greatest accomplishment in life was that of a university professor. I think she needs to go back to her failed past.

@mmx+1cPFK9Pz
Assumes that the so called Consumer Protection org that Warren started isn't corrupt. And will you bet your life on that?

@aue+1cPFK9Pz

Trust was NOT sold. CORPORATE Trust was sold. There is a big difference.

"In any event, government officials aren't qualified to choose. Doesn't matter who it is or what party they represent. No one in government should be making these decisions, ever."

It's 100% governments job to protect citizens from people and or corporations that do bad stuff.

New Alert - Wells has done a lot of really, really bad stuff, and doesn't seem to be in a hurry to do better.

Your opinions on this topic matter.

Charlie is listening.

@apn+1cPFK9Pz

There's thousands of banks, you think there isn't enough competition? Really? There's a lot of industries that have less. Break them all up? On what basis?

In any event, government officials aren't qualified to choose. Doesn't matter who it is or what party they represent. No one in government should be making these decisions, ever. If the board or shareholders want to break up WF, they will do so. It's happened many times in the past, with no political involvement.

'why shouldn't it be broken up?' is a ridiculous question. It's like asking 'why shouldn't that guy over there punch himself in the face?'. The shareholders have no responsibility whatsoever to break up the company. Fix issues, sure, but the idea that that can't be done without a break up is a joke. It also flies in the face of all evidence. We've already downsized / sold all kinds of businesses. Has it fixed things to your satisfaction? Then what evidence suggests that selling more parts off will improve things? The answer is 'there isn't any'. Current leadership may not be good enough to fix things, but if that's the case they will be sacked and new people brought in. No breakup required.

You think Warren despises both based on the hours and hours you two have spent talking about economics?

Seriously, people have "feelings" about people they've never even been in the same zip code with, and feel confident to share those feelings in public.

Agree with an earlier point that there is a difference between Capitalism and Free Enterprise. But my money is on the thought that Warren assuredly despises both.

Still just insults and no rational counterpoint.

FYI, Capitalism and Free Enterprise are not the same thing.

And you can be all in for Capitalism as long as it's regulated so it doesn't eat itself.

Which is what Wells has been doing for years now, first with the crimes, and by making everyone miserable with layoffs ever since.

We get it, you don't like Warren, but how about someone, anyone, tell us all why Wells and the rest of the Too Big To Fail But Give Me My 10 Million Dollar Bonus banks shouldn't be broken up.

More smaller banks would mean more competition, and since they'd have to be more local, they'd care about investing in their own community instead of other countries, becauase it would be good for business.

And now, let the attack of the MBA's begin.... show us what mommy and daddy got for their college fund money. :-)

Good for her! She still owns Stumpf's ball sack from 2016 when she called his bluff. I don't agree with her on much, but on WF we are on the same page! Break em up beeotch!

It’s comical to watch weak men boohooing about a strong woman.

lol, politicians talking about accountability. The people that are literally never held accountable for anything.

Where's the teamworks chainsaw response to this one

Sad part though is that the bank HAS been divesting business - slowly - to keep the lights on and extract value for chainsaw and his cronies.

Trust, retirement, leasing, and student loan businesses were all sold.

Reality is - breaking up the bank is already happening; just not at the pace Warren would like and benefiting the people she doesn't.

@uas+1cPFK9Pz

Warren isn't bringing up any issues, she's bringing up demands for tribute. Please don't tell me you are naive enough to think otherwise. Pols in DC do not care about you. They don't care about the economy. They don't care about businesses. They don't care about the country. They don't care about ethics. They care about one thing, and one thing only: their own power.

Warren couldn't be happier when a bank has regulatory issues, it gives her a convenient punching bag to get votes and tribute. This isn't to say that WF doesn't have issues, all companies do, but no one should care what a senator from MA, or any other state, cares about whether or not a business should be broken up. It's not their business and they aren't qualified to make that assessment. Government has already weaponized the control of private businesses more than they should. Last I heard fascism was bad, so let's stop trying to create the text book definition of one by granting absolute power over allegedly private businesses to the gov.

Never thought I'd agree with Elizabeth Warren on ANYTHING! But she is spot on here!

In a separate letter to the chairman of Wells Fargo's board of directors, Warren questioned whether CEO Charlie Scharf and the board were capable of managing the bank. She accused the bank of additional "corruption" and "mind-boggling" mismanagement under Scharf, who earned more than $20 million in the 2020 fiscal year.

"It is unfathomable that Mr. Scharf has been so well compensated while failing for the last two years to address the company’s ‘top priority,’ and inconceivable that no member of the Wells Fargo Board or its top executives has been held sufficiently accountable," she wrote. "You owe your customers, your investors, and your regulators an explanation for Wells Fargo’s ongoing inability to meet legal and regulatory requirements."

I feel like she's trying to get us in the unemployment line. Maybe she wants to turn us into losers who need handouts. Pass.

Team horse paste trying their damndest to what-about Wells Fargo’s issues away once again. They must not have seen that WF incurred yet another huge fine just last week, definitely the sign of a rehabilitated culture of compliance.

Isn't is just possible that she just keeps moving the goal posts? I mean, what exactly are the "specific detailed objectives" she claims Well is not meeting? Her inquiry into Charlie's income related to regulatory replies is really none of her business. If she were a man she would be what is known in old terms as a blow hard. All wind, look at me, no substance. In reality, just a sad cry out for help.

Actually, this should have happened years ago. Wells only came acquired the dealer through the Wachovia acquisition. There is some analysis out there which suggests that ownership of a dealer reduces the stock value of a bank as the dealer earnings are much more volatile and subject to substantial losses. So, those you employed by the bank would be better off w/o the dealer and the stock price would likely go up if the dealer divested.

“The issues are being addressed”

Maybe, but the problem is that the bank doesn’t ever stop having new ones. That is the result of cultural rot, an inability to ever do the right thing the first time.

And if new issues were just buried in layers, that is more than enough proof that it’s too big to manage.

Post ID: @sqh+1cPFK9Pz

Being tough on banks is her stchick - that and taxing people out of existence. I can see why folks might comment.

Hey, you guys notice how any post with Warren in it gets extra comments?

It's almost as if the Wells PR/HR teams are standing by...

Oh look!

When being called out for not having any ideas just insults, they just keep throwing insults.

Because they got nothing else.

Please, tell us in your learned view, using the latest graphs and charts, why Wells should not be broken up.

Or just call everyone here a poopyhead and we'll call it a day.

"No one refuses being paid by Wells. Especially those who whine the most. Hypocrite at its best."

I dunno... Your parents die and leave you 300K. Do you refuse to accept it because they're as-----s?

No one refuses being paid by Wells. Especially those who whine the most. Hypocrite at its best.

Post ID: @uas+1cPFK9Pz

The issues are being addressed as anyone who works here well knows. Her chiming in is just political theater / grandstanding and there's plenty of that on both sides of the aisle.

Oh, look!

Instead of addressing the issues Warren brings up, the right just attacks Warren.

When you run out of ideas, you just call names I guess.

There isn't one person at Wells who doesn't agree with her, but some folks just won't give up that Wells paycheck, no matter how dirty the money is.

Wouldn’t be surprised if that’s been the plan all along…

Translation: 'hey Daly, you didn't drop off enough briefcases full of cash for my campaign. Keep 'em coming...or else.'

Warren was a pretty hardcore capitalist until she realized that she could get more power for herself as a militant socialist instead. She has no principles beyond "more power for me", and she's always been a known liar and culture appropriationist. If she doesn't like you, you're probably doing the right thing. Doesn't mean WF doesn't have issues to resolve, but Warren gives politicians a bad name, and that's no small task.

Time to pull the money out and park them elsewhere. Dems mean business...

You can tell the culture that enabled the scandals has really improved by how many posters here still belligerently stick their heads in the sand any time it is brought up

Thread regarding Wells Fargo & Co. layoffs

Elizabeth Warren Asks the Fed to Break Up Wells Fargo

50 replies (most recent on top)

Post a reply