Senator asks Wells Fargo to fix its risk management practices

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Wells Fargo CEO Charles Scharf earned $24.5 million last year, up 20% from 2020.


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Andrew Harrer/Bloomberg News

Wells Fargo & Co. needs to address its governance and risk management issues, the U.S. Senate Banking Committee chairman said, pointing to what he called a “laundry list” of consumer abuses and market failures. compliance.

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 to Wells Fargo chief executive Charles Scharf on Tuesday. .

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

A Wells Fargo spokeswoman did not immediately respond to a request for comment.

Senator Brown pointed to a $7 million fine the U.S. Securities and Exchange Commission imposed on a Wells Fargo unit earlier this month for violating anti-money laundering rules. Wells Fargo was also fined $250 million in September for its failure to address longstanding issues in its mortgage business.

Senator Brown also pointed to a recent news report in which a former employee alleged that Wells Fargo conducted fake interviews with black and female candidates to give the false impression that it was trying to diversify its workforce.

Wells Fargo’s failure to address alleged discrimination in lending and increase diversity among its workforce has raised questions about the bank’s ability to address “a myriad of internal control, risks and general governance,” said Senator Brown.

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

Mr Scharf earned $24.5 million last year, receiving a 20% raise as the bank recovered from its pandemic crisis. He took over the management of the company in October 2019.

Write to Richard Vanderford at [email protected]

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