{"id":11955,"date":"2016-09-20T11:37:53","date_gmt":"2016-09-20T11:37:53","guid":{"rendered":"http:\/\/www.biphoo.com\/bipnews\/?p=11955"},"modified":"2016-09-20T11:37:53","modified_gmt":"2016-09-20T11:37:53","slug":"wells-fargo-john-stumpf-takes-center-stage-at-senate","status":"publish","type":"post","link":"https:\/\/www.biphoo.com\/bipnews\/business\/wells-fargo-john-stumpf-takes-center-stage-at-senate.html","title":{"rendered":"Wells Fargo John Stumpf Takes Center Stage at Senate"},"content":{"rendered":"

Wells Fargo’s John Stumpf Takes Center Stage at Senate<\/span><\/strong><\/h2>\n

Wells Fargo\u2019s John Stumpf Takes Center Stage at Senate<\/strong> : John Stumpf\u2019s trip to Capitol Hill on Tuesday opens Wells Fargo\u2019s sales practices\u2014and the executive himself\u2014to a fresh round of scrutiny.<\/span><\/p>\n

The Wells Fargo chief executive has been called to testify before the Senate Banking Committee to discuss allegedly illegal sales practices at Wells Fargo. These led the bank to agree to a $185 million fine and enter into an enforcement action with regulators.<\/span><\/p>\n

Mr. Stumpf has said he is hopeful he\u2019ll get to \u201cshare Wells Fargo\u2019s story with the Senate.\u201d Already, though, a group of Democratic senators have written to him asking whether the bank plans to claw back pay from top executives.<\/span><\/p>\n

Given the bank fired 5,300 employees over five years for improper conduct, Mr. Stumpf is likely to face questions about just who in the bank\u2019s upper reaches was disciplined, as well as his own stewardship of the bank.<\/span><\/p>\n

Here are four senators to watch during the hearing, which begins at 10 a.m.Eastern time Tuesday.<\/span><\/p>\n

Richard Shelby<\/span><\/strong><\/p>\n

As chairman of the banking committee, Sen. Richard Shelby (R, Ala.) will have the chance to try to set the tone for the hearing. That could work to Wells Fargo\u2019s advantage, but the bank can\u2019t be assured he will be a friend.<\/span><\/p>\n

Sen. Shelby is seen as being fairly sympathetic to banks and has been a critic of the Dodd-Frank Act, the 2010 financial-overhaul law. He has also been hostile to the Consumer Financial Protection Bureau, one of the government agencies that leveled the accusations against Wells Fargo that led to its fine.<\/span><\/p>\n

That could indicate Sen. Shelby will be less inclined than some other senators to take the CFPB\u2019s criticisms of the bank at face-value. Indeed, when J.P. Morgan Chase & Co. chief James Dimon appeared before the Senate panel in 2012 over the so-called London Whale trading scandal, Sen. Shelby\u2019s questions weren\u2019t particularly critical.<\/span><\/p>\n

But Mr. Dimon may have benefited from the fact that he could assure the panel the trading never put any customer funds at risk. Nor did it directly affect consumers. That isn\u2019t the case with Wells Fargo.<\/span><\/p>\n

Elizabeth Warren<\/span><\/strong><\/p>\n

A longtime critic of Wall Street, Sen. Elizabeth Warren (D, Mass.) has regularly expressed frustration over the behemoth size of the nation\u2019s banks and the inability of regulators to manage them. Her questioning of Mr. Stumpf is likely to be most closely watched, and perhaps the most biting.<\/span><\/p>\n

The Massachusetts Democrat is already calling for Mr. Strumpf to take responsibility for the bank\u2019s alleged misconduct. \u201cHe needs to be accountable, as does the rest of his senior management,\u201d Sen. Warren said in a television interview last week. \u201cYou should not be able to keep your job and keep raking millions of dollars in bonuses.\u201d<\/span><\/p>\n

Ms. Warren is also likely to use the hearing to press for adoption of proposed rules regarding claw backs of pay for top bank executives. And the hearing could also provide a venue for her to highlight the role of the CFPB, which she helped create, in protecting consumers. It was one of the agencies that took part in the investigation into Wells Fargo.<\/span><\/p>\n

Sen. Warren has also routinely chastised regulators for failing to prosecute more top bank executives for wrongdoing.<\/span><\/p>\n

Bob Corker<\/span><\/strong><\/p>\n

Tennessee Republican Bob Corker is tough to pigeon-hole when it comes to big banks.<\/span><\/p>\n

Sen. Corker has been both a critic and an advocate of financial regulation. For example, he has raised concerns that the Financial Stability Oversight Council could unwind a healthy bank simply because the council viewed it as \u201ctoo big to fail.\u201d<\/span><\/p>\n

Yet he also was one of the driving forces behind an overhaul of money-market fund rules, at one point suggesting that if the Securities and Exchange Commission failed to enact rules to prevent destabilizing runs, the FSOC should consider enacting the rules itself.<\/span><\/p>\n

The Tennessee Republican has been known for his efforts to forge bipartisan deals on the Dodd-Frank Act, the auto bailout, housing finance and the Consumer Financial Protection Bureau. This can be lonely work on Capitol Hill\u2014and Mr. Corker\u2019s efforts have often ended in failure.<\/span><\/p>\n

So while Sen. Corker isn\u2019t likely to be the fiercest critic of Wells Fargo on the banking panel, expect him to focus on questions such as when Mr. Stumpf knew of the troubles at the bank, who is the highest level employee to be held accountable, and whether Wells Fargo is too big to manage.<\/span><\/p>\n

Sherrod Brown<\/span><\/strong><\/p>\n

The top Democrat on the banking panel, Sen. Sherrod Brown is no friend of big banks.<\/span><\/p>\n

A proponent of breaking up the largest banks, Mr. Brown is likely to take the opportunity during Tuesday\u2019s panel to reignite the debate that megabanks are \u201ctoo big to manage,\u201d as lawmakers seek to understand how the events at Wells Fargo transpired.<\/span><\/p>\n

He, along with four other Democratic senators on the committee, immediately sent a letter last week to Chairman Shelby pressing for a \u201cthorough and comprehensive review\u201d of Wells Fargo.<\/span><\/p>\n

Among their questions: How was it possible than \u201cmore than 5,000 employees could bilk customers over the course of five years.\u201d<\/span><\/p>\n

\u00a0Wells Fargo has said it dismissed employees who didn\u2019t \u201chonor\u201d the banks values, but that the firings weren\u2019t a sign of deeper institutional or cultural problems.<\/span><\/p>\n

The Ohio Democrat is a staunch defender of the 2010 Dodd-Frank law, and has advocated for putting an end to compensation practices seen as risky on Wall Street. Mr. Brown has also pushed for a proposal to cap the size of the largest banks.<\/span><\/p>\n

Source<\/strong> : http:\/\/www.wsj.com\/articles\/wells-fargos-john-stumpf-takes-center-stage-at-senate-1474363803<\/span><\/p>\n

\n\t\t\t
\n\t\t\t <\/div><\/div>\n\t\t