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In a letter sent to Wells Fargo (NYSE:WFC) CEO Charles Scharf on Tuesday, Senator Sherrod Brown, Chair of the Senate Banking Committee, demanded the bank “address its longstanding risk management failures.”
“I urge you to once and for all address Wells Fargo’s governance, risk management, and hiring practices – weaknesses that have plagued the bank for almost a decade,” Brown’s letter read.
The Senator listed issues regarding reports of discrimination concerning hiring after The New York Times reported Wells Fargo conducted fake interviews of Black and female applicants to give the impression of improving diversity.
Brown added that it is not the first time Wells Fargo employees have raised concerns about discriminatory treatment.
“In 2020, Wells Fargo settled a claim with the Department of Labor for discriminating against over 30,000 Black applicants for banking, sales, and support positions. In 2017, Wells Fargo settled a lawsuit brought by Black financial advisers for racial discrimination, paying $36 million to hundreds of aggrieved employees,” said the Senator.
Adding: “Wells Fargo’s ongoing, failed efforts to combat lending discrimination and increase diversity within its ranks raise questions about your ability to fix the myriad internal controls, risk management, and general governance issues that have been a problem for nearly a decade.”
Mr. Brown noted the Securities and Exchange Commission fined Wells Fargo’s broker-dealer business $7 million for anti-money laundering violations, while Wells Fargo made $21.5 billion in 2021, announcing a plan to double dividends and repurchase $18 billion in stock, and Scharf received $24.5 million last year in total compensation.
The Senator said he expects the bank to have a plan to “finally reform the firm’s risk management, internal controls, and governance structures” so that they can right past wrongs and live up to the “many promises that Wells Fargo has made to its customers and their communities.”
He concluded that the Wells Fargo chief would be speaking at the annual Wall Street oversight hearing.
