Wells Fargo told to fix its risk-management practices

Fenika Bench

Wells Fargo & Co.  must fix its governance and risk-management issues, the chairman of the U.S. Senate Banking Committee said, highlighting what he called a “laundry list” of consumer abuses and compliance breakdowns.

The bank has been plagued by weaknesses in its governance and risk-management practices for nearly a decade, Sherrod Brown (D., Ohio) said in an open letter sent Tuesday to Wells Fargo Chief Executive Charles Scharf.

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“It is clear that Wells Fargo still has a long way to go to fix its governance and risk management before it should be allowed to grow in size,” Sen. Brown wrote. “It is unacceptable that after years of failed attempts, nothing seems to have improved.”

Wells Fargo location in Philadelphia. (AP Photo/Matt Rourke) (AP Photo/Matt Rourke / AP Newsroom)

A spokeswoman for Wells Fargo didn’t immediately respond to a request for comment.

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Sen. Brown highlighted a $7 million penalty the U.S. Securities and Exchange Commission imposed on a Wells Fargo unit earlier this month for violations of anti-money-laundering rules. Wells Fargo also was fined $250 million in September for its failure to address longstanding problems in its mortgage business.

Wells Fargo CEO

 Charles W. Scharf, CEO of Wells Fargo (Photo By Tom Williams/CQ Roll Call/Sipa USA)  ((Photo By Tom Williams/CQ Roll Call/Sipa USA) )

Sen. Brown also pointed to a recent news report in which a former employee alleged that Wells Fargo conducted fake interviews of Black and female job applicants to give a false impression that it was trying to diversify its workforce.

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Wells Fargo’s failure to combat alleged lending discrimination and increase diversity among its staff raised questions about the bank’s ability to address “myriad internal controls, risk management and general governance issues,” Sen. Brown said.

Ticker Security Last Change Change %
WFC WELLS FARGO & CO. 44.70 -0.73 -1.61%

The senator said he expected Mr. Scharf to make a plan to reform the bank’s risk management and internal controls.

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Mr. Scharf earned $24.5 million last year, receiving a 20% raise as the bank recovered from its pandemic slump. He took over as the company’s top executive in October 2019.

Write to Richard Vanderford at [email protected]

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