By Colleen M. Svelnis, J.D.
Beleaguered Wells Fargo Chairman and Chief
Executive Officer John Stumpf has retired from the company and its Board,
effective as of Oct. 12, 2016. Tim Sloan, the President and Chief Operating
Officer, will succeed him as CEO, and Stephen Sanger, its Lead Director, will be
the Board’s non-executive Chairman. These changes follow actions against Wells Fargo by the Consumer
Financial Protection Bureau and the Office of the Comptroller of the Currency
which resulted in a record fine of $100 million for Wells Fargo’s widespread
practice of secretly opening up two million unauthorized deposit and credit card
accounts that dated back to 2011. In a statement, Stumpf said that he is "very optimistic" about
Wells Fargo’s future.
Senator Sherrod Brown (D-Ohio) ranking member of
the U.S. Senate Committee on Banking, Housing, and Urban Affairs, stated that Stumpf’s retirement "does nothing to answer the
many questions that remain." Brown called for "accountability" within Wells
Fargo and stated that "We are still waiting for answers as to how Wells Fargo
plans to right its wrongs against customers and the low-paid employees who
weren’t given the benefit of a retirement package when they were fired for
refusing to cheat." Stumpf testified before the Senate Banking Committee on
Sept. 20, 2016.
Representative Maxine Waters (D-Calif), ranking
member of the House Financial Services Committee, called the retirement "more
than appropriate" due to Wells Fargo’s "unconscionable misconduct" for which
Waters stated that Stumpf "bears direct responsibility." According to Waters,
during his testimony in front of her committee, "it became clear that Mr. Stumpf
either knew, or should have known, that this misconduct was happening within his
bank and failed to do anything about it until prominent news articles were
published." Stumpf testified before the Financial Services Committee on Sept.
29, 2016.
