Lesson for India in tackling bank NPAs? Must watch, US Senate Banking Committee’s verbal thrashing of Wells Fargo CEO

By: | Published: September 21, 2016 11:47 AM

Wells Fargo CEO, Wells Fargo CEO John StumpfThe video clip below is a must watch to know how John Stumpf, Wells Fargo CEO came under fire for the bank’s alleged fraud. (AP Photo)

It’s not everyday that the CEO of one of US’ largest banks, Wells Fargo, is grilled, verbally thrashed and subjected to intense questioning. The video clip below is a must watch to know how John Stumpf, Wells Fargo CEO came under fire for the bank’s alleged fraud. While we are in no position to decide on the guilt of Wells Fargo and its CEO, we wonder if Indian regulatory agencies would ever roast defaulting Indian CEOs, banks and financial institutions in a similar manner. Cheating customers and deafulting are serious offences, and we really hope that India would look at a similar system to hold companies and their managements accountable.

Wells Fargo CEO John Stumpf came under intense scrutiny from the US Senate Banking Committee, over the bank allegedly opening millions of customer accounts without their permission. In a three hour long grilling session, Stumpf was reportedly peppered with criticism. Calls are growing louder for his resignation, and Stumpf it is said “appeared taken aback” by the intensity of the verbal lashing that he received. Elizabeth Warren, a Massachusetts Democrat and frequent critic of Wall Street, called for Stumpf and Wells Fargo to be criminally investigated and asserted that Stumpf had shown “gutless leadership” during the long-running sales misconduct.

Stumpf told the Senate Banking Committee he has told his managers to do “whatever it takes” to make customers whole, refunding fees or compensating them for damage to their credit ratings. Stumpf said he was “deeply sorry” that the bank failed to meet its responsibility to customers and didn’t act sooner to stem “this unacceptable activity.”

Watch: Senator Warren to Wells Fargo CEO: “You should resign.”

Members of the Senate Banking Committee were not satisfied by Stumpf’s show of contrition. “Words that come like a San Francisco fog on little cat feet won’t cut it,” Senator Sherrod Brown of Ohio, the panel’s top Democrat, told Stumpf. “These were not magically delivered ‘unwanted products’. This was fraud; fraud that you did not find or fix quickly enough.” They pressed Stumpf about claims from regulators that Wells Fargo employees opened the unauthorized accounts, transferred customers’ money into them, and even signed people up for online banking in a feverish drive to meet sales targets.

Debit cards were issued and activated, as well as PINs created, without customers knowing, US and California regulators said as they fined San Francisco-based Wells Fargo a combined $185 million earlier this month.

(With inputs from AP)

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