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Senator Asks the Fed to Punish Major Bank’s CEO

A spokesman for the Federal Reserve said that it has received a letter from Sen. Elizabeth Warren urging Wells Fargo, one of the biggest banks in the U.S., be kept under an asset cap it was placed under in February 2018. This action was taken in response to Wells Fargo having created millions of fake customer accounts in what the Fed called “widespread consumer abuses,” then allegedly silencing employees who tried to speak out.

According to CNN, Senator Elizabeth Warren, a Massachusetts Democrat widely considered a contender in the 2020 presidential race, sent the letter asking that the central bank maintain the asset cap—at least until Wells Fargo dismisses its current CEO, Tim Sloan.

“Mr. Sloan has served as CEO, CFO, and COO as Wells Fargo has engaged in this persistent and widespread mistreatment of customers and employees,” Sen. Warren’s letter stated. “Either he was aware of this misconduct and did nothing to stop it, or he was not aware of it despite his obligations as senior manager of the company.”

The Fed has required that Wells Fargo undergo a number of steps to ensure previous abuses do not occur again, otherwise the cap will remain in place. Senator Warren argues that it’s impossible for the bank to satisfy these requirements with Sloan still in charge.

Wells Fargo responded in a statement saying that it “continues to have constructive dialogue” with Fed officials as the bank seeks to comply with all requirements. The bank has contended that overall corporate deposits were lower last quarter than they would have been if it had not been for efforts necessitated to “manage the asset gap.”

Wells Fargo has made multiple changes in an effort to comply with the Fed’s requirements, including replacing CEO John Stumpf, getting rid of its sales goals, and refunding customers for improper fees. The bank has also launched a marketing campaign to rehabilitate its image.

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