By Thomas G. Wolfe, J.D.
In a September 2017 release, Independent Community Bankers of America President and CEO Camden R. Fine asserts that “federal regulators have taken no meaningful action against the board and senior managers who were supposedly responsible for the ethical, moral, and legal conduct” of Wells Fargo. According to Fine, “no community bank would have been given this kind of regulatory deference. There is not supposed to be a double standard for regulation and enforcement in this nation, but the wrongdoings of Wells Fargo show us that apparently one exists for too-big-to-fail banks.” As observed by the ICBA’s release, Fine’s remarks come in the wake of a Wells Fargo report indicating that there are many more “fake customer bank and credit card accounts than previously realized.”
Recent report. The ICBA president’s reaction is based, at least in part, on a recent Wells Fargo report about the completion of a “third-party review” of Wells Fargo retail banking accounts “dating back to the beginning of 2009.” An Aug. 31, 2017, release by Wells Fargo summarizing the report states that the third-party review included a “data analysis methodology that errs on the side of customers.”
Originally, approximately “2.1 million potentially unauthorized accounts” were identified in the Wells Fargo scandal. Now that the latest report uses a different methodology and includes retail banking accounts opened at Wells Fargo from January 2009 through September 2016, “a new total of approximately 3.5 million potentially unauthorized consumer and small business accounts” has been identified.
The ICBA points out that the Wells Fargo report follows “news last month” that Wells Fargo allegedly “was caught charging 800,000 people for auto insurance they did not want or need.”
Remove Wells Fargo executives. Fine states that federal regulators “haven’t even given them [Wells Fargo] a good slap on the wrist.” According to Fine, “Had this been a community bank board and senior managers, not only would they all have been removed from the bank months ago, but they would also be facing prosecution.” Fine also notes that the Wells Fargo scandal has produced the side effect of “tarring the good reputations of thousands of community banks and bankers.”
From Fine’s perspective, the Wells Fargo board “should be replaced, and so should its senior management. End of story.” Similarly, in August 2017, based on the cumulative evidence in the Wells Fargo scandal, Senator Elizabeth Warren (D-Mass) renewed her call for the Federal Reserve Board to remove all Wells Fargo directors who served on the board between May 2011 and July 2015 (see Banking and Finance Law Daily, Aug. 17, 2017).
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