SAN FRANCISCO (CBS SF) — Wells Fargo Bank CEO, and San Francisco resident, John Stumpf is expected to testify before Congress in response to allegations that the bank allegedly opened over two million phony accounts without customers’ approval.
The alleged abusive practices by the bank are estimated to have cost Wells Fargo customers over $2.5 million over a five-year period.
The House Financial Services Committee’s Friday announcement that it had launched an investigation into the alleged fraud comes after a $185 million settlement by the bank with federal and California regulators.
The investigation will also look into the role that federal regulators played in monitoring Wells Fargo’s activity. Internal documents between Wells Fargo and regulators have already been requested, according to the House Financial Services Committee Chairman Jeb Hensarling (R-TX).
Wells Fargo has said that customers have been reimbursed and that over 5,000 employees have been terminated.
Stumpf, as the bank’s top official, has been facing significant public scrutiny and is also expected to testify on Tuesday at a U.S. Senate Committee on Banking, Housing and Urban Affairs hearing into the alleged fraud.
According to an August 2016 report by the Institute for Policy Studies, “The Wall Street CEO who received the most in tax-deductible bonuses is John Stumpf of Wells Fargo. Between 2012 and 2015, years in which the bank faced $10.4 billion in misconduct penalties, Stumpf pocketed more than $155 million in fully deductible performance pay. This works out to $54 million in tax subsidies for Wells Fargo — just for one man’s bonuses.”
Stumpf said publicly this week that he assumes responsibility for the alleged fraud, but does not plan to resign.
By Hannah Albarazi – Follow her on Twitter: @hannahalbarazi.