Wells Fargo faces tighter controls as U.S. regulator reverses course

Fri Nov 18, 2016 10:12pm EST
 
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By Patrick Rucker

WASHINGTON (Reuters) - A leading U.S. bank regulator on Friday reversed course and positioned the agency to claw back pay of former executives at Wells Fargo & Co after a phony-accounts scandal.

The lender must also now seek prior approval before naming new bank leadership, said the Office of the Comptroller of the Currency, the main regulator for federal banks.

Friday's move may target executive pay at Wells Fargo at a time when some lawmakers complain bank bosses have not paid a fair price for their part in financial scandals.

Wells Fargo in September agreed to pay $190 million to settle charges that bank employees opened as many as 2 million accounts without customers' knowledge.

The fraud went on for at least five years, said the San Francisco-based bank that fired 5,300 employees involved.

Congressional hearings followed news of the scandal and John Stumpf, the firm's chief executive officer, resigned.

Meanwhile, the September settlement with Wells Fargo remained relatively lax.

The OCC exempted Wells Fargo from some controls on "golden parachutes" in that agreement. The move Friday evening voids those earlier allowances and puts Wells Fargo under toughened standards for oversight, the OCC said.   Continued...

 
A Wells Fargo branch is seen in the Chicago suburb of Evanston, Illinois, U.S. on February 10, 2015.  REUTERS/Jim Young/File Photo