Wells Fargo CEO John Stumpf Steps Down
AUDIE CORNISH, HOST:
Wells Fargo has been under pressure for weeks now ever since federal regulators ordered the bank to pay a $185 million fine. Wells Fargo admitted to opening up some 2 million accounts in customers names without their knowledge, and it fired low-level employees as a result. But at a Senate hearing on Capitol Hill, Massachusetts Senator Elizabeth Warren told the bank's CEO that was not enough.
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ELIZABETH WARREN: And when it all blew up, you kept your job. You kept your multimillion dollar bonuses, and you went on television to blame thousands of $12-an-hour employees who were just trying to meet cross-sell quotas that made you rich.
CORNISH: Warren told the CEO, John Stumpf, he should resign. Well, now he's informed the bank's board he's retiring effective immediately. Joining us to discuss this latest turn is NPR's Chris Arnold. And, Chris, to start, why now?
CHRIS ARNOLD, BYLINE: Well, the official statement from the company says - and I'll read here - that - they say John Stumpf has dedicated his professional life to banking, successfully led Wells Fargo through the financial crisis and helped to create one of the strongest financial services companies in the world. Although, it goes on to say, however, he believes that new leadership at this time is appropriate to guide Wells Fargo through its current challenges.
Now, that's the statement, but it did seem like John Stumpf was trying to hang onto his job after this scandal broke. And we heard that tape in the Senate. He faced two panels in Congress with lawmakers. It was one of the rare times yiu had Republicans and Democrats united sort of, you know, hurling questions at the CEO. And he was trying to make the case that - look; we fired 5,000 people. We've got rid of the bad apples. We're cleaning up this mess. But lawmakers were not really being persuaded.
CORNISH: And the scandal's far from over, right? There are lawsuits pending, some of those on behalf of workers right now - right? - not just customers.
ARNOLD: Yeah, and I thinks (ph) that - at this point, that is the most interesting part of this story to me - that when we first heard about this, it was, OK, up to 2 million customers got an extra credit card and checking card. And that's outrageous. But as I've been reporting on this, that shifted, and the anger you heard from Elizabeth Warren - that's one thing that - look; you're scapegoating a lower-level workers.
In the face of that, the CEO, Stumpf, actually had his pay clawed back eventually $41 million. That's two years worth of pay. So you could see there things were starting to shift. And it feels like that's the direction this scandal's going now.
CORNISH: You've been reporting on this for some time. What have you been hearing from Wells Fargo employees?
ARNOLD: Well, a lot of them are saying, look; we were fired unfairly. This is not a case of just bad apples. They're - they say, we were good apples. And you know, people have been telling me, I was calling the company ethics line and saying, this is a boiler room culture. You - you're forcing us to sell, sell, sell these products. People are breaking the rules. It's unethical. I can't meet these sales quotas.
Some of those people would get fired, get something that sounded bad put on their permanent record that hurt them from getting another job. And you know, if you're calling the ethics line and you get fired, that just doesn't sound like a good culture, right?
CORNISH: In the meantime, the new CEO, Tim Sloan - what can you tell us about him?
ARNOLD: Well, very quickly, he is the company's president and chief operating officer. He joined Wells Fargo 29 years ago. And I think that's going to be the big challenge - to convince people, look. It - as this story has evolved, the culture of Wells Fargo is really a question. And can somebody who's been a part of that culture for almost 30 years be the person who's able to turn the ship around and change it?
CORNISH: That's NPR's Chris Arnold. Chris, thanks so much.
ARNOLD: Thanks, Audie. Transcript provided by NPR, Copyright NPR.