Embattled Wells Fargo to face protests and more calls for change at annual meeting
Wells Fargo & Co.’s top brass will gather in Iowa Tuesday for the bank’s annual shareholder meeting — and they’ll be getting an earful from critics and advocacy groups over issues such as continued revelations of consumer abuses and the bank’s dealings with gun makers.
It’s the second shareholder meeting since the San Francisco bank admitted in 2016 that its employees had created potentially millions of accounts without customer authorization, and just days after regulators fined the bank $1 billion over other problems uncovered in the scandal’s wake.
The Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau on Friday each ordered the bank to pay $500 million to answer for pervasive risk-management problems and for specific abuses in its auto- and mortgage-lending divisions. The Federal Reserve in February cited the same issues when it took the unprecedented step of ordering the bank to cap its growth.
The bank has acknowledged that it charged improper fees to some mortgage borrowers and that it pushed hundreds of thousands of auto loan customers to pay for insurance policies they did not need. Both of those practices came to light last year as regulators and Wells Fargo itself investigated a wide array of practices at the bank.
The penalty handed down last week dwarfs the $185 million the bank agreed to pay to regulators in 2016, but bank critics want still more to be done. Some will make their case today at the Marriott hotel in downtown Des Moines that will host the bank’s meeting.
Last year, shareholders voted in droves against the bank’s board members in what the bank’s then-Chairman Stephen Sanger called “a clear message of dissatisfaction.” Since then, the company has replaced several long-serving board members, including Sanger. Just five of the bank’s 15 board members have been with the bank since before the accounts scandal broke.
Friday’s regulatory order also gave the OCC the right to remove Chief Executive Tim Sloan and other senior officers, as well all board members, and approve any replacements.
Bank spokesman Ancel Martinez said Wells Fargo has “made significant progress on making things right for our customers” and improving its compliance and corporate oversight.
“Company leaders look forward to presenting to shareholders an update on accomplishments to date, and the work in progress,” he said. “We remain focused on building a better bank and rebuilding trust with our broad range of stakeholders.”
California Treasurer and gubernatorial candidate John Chiang will be at the meeting, calling for a shakeup in the bank’s executive suite and for an end to Wells Fargo’s use of forced-arbitration clauses — contract provisions that have kept customers from being able to sue the bank, even over unauthorized accounts and other abuses.
Before traveling to Iowa, Chiang on Monday held a news conference near Wells Fargo’s headquarters and delivered a letter calling for the resignation of Sloan, appointed in 2016 after his predecessor, John Stump, was ousted weeks after the $185-million settlement.
New York Comptroller Thomas DiNapoli wants shareholders to ask for a report on the bank’s incentive compensation systems, which have been blamed for many of the bank’s woes.
Workers created unauthorized accounts as they tried to hit onerous sales goals, either to meet incentive compensation targets or simply keep their jobs, a practice first documented in a 2013 Times investigation.
The bank in 2016 eliminated sales goals for branch-level workers, but a former currency trader at the bank said in a lawsuit this month that incentive pay also may have led to misconduct in Wells Fargo’s foreign-exchange business.
Members of the labor-backed group Committee for Better Banks plan to protest outside the meeting and in a handful of other cities, also calling for Sloan’s resignation and improved pay for bank workers.
Another group, Iowa Citizens for Community Improvement, has organized a protest to call for new leadership and a breakup of the massive bank, the Des Moines Register reported.
That and other groups have been critical not only of the bank’s consumer abuses but also of its history of doing business with gun manufacturers. Bloomberg reported last month that Wells Fargo is the primary bank of the National Rifle Assn. and has arranged more financing for gun makers than any other institution.
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