To claw back pay of former executives at Wells Fargo & Co after a phony-accounts scandal, a leading U.S. bank regulator reversed course and repositioned the agency.
The Office of the Comptroller of the Currency, the main regulator for federal banks said that the lender must also now seek prior approval before naming new bank leadership.
At a time when some lawmakers complain bank bosses have not paid a fair price for their part in financial scandals, this move may target executive pay at Wells Fargo.
To settle charges that bank employees opened as many as 2 million accounts without customers' knowledge, Wells Fargo agreed to pay $190 million in September. The San Francisco-based bank that fired 5,300 employees involved said that the fraud went on for at least five years.
John Stumpf, the firm's chief executive officer, resigned and Congressional hearings followed news of the scandal.
Meanwhile, the September settlement with Wells Fargo remained relatively lax.
In that agreement, the OCC exempted Wells Fargo from some controls on "golden parachutes". The OCC said that the latest move puts Wells Fargo under toughened standards for oversight and voids those earlier allowances.
"The OCC informed the Bank today that it has revoked... relief from specific requirements and limitations regarding rules, policies, and procedures for corporate activities," the agency said in a Friday evening statement.
The bank is on track to restore its reputation and business, a Wells Fargo official said. "This will not inhibit our ability to execute our strategy, rebuild trust and serve our customers," said spokeswoman Jennifer Dunn.
According to a Reuters review of securities filings, in the wake of the scandal, Stumpf and Carrie Tolstedt, former head of retail banking, did relinquish about $60 million in stock. But according ot the filings, the pair also stood to take home more than $350 million in compensation.
According to the September settlement, Wells Fargo "is not subject to the limitation on golden parachute and indemnification payment." An eight-page stipulation exempts the bank from "requiring OCC approval of a change in directors and senior executive officers" and that allowance on executive pay appears in the stipulation.
According to banking rules, the OCC could have asked that incoming executives satisfy tests of "experience, character or integrity" if it has asserted its right to screen Wells Fargo executives.
While exemptions are common, after the savings and loan crisis of the 1980s and 1990s, regulators gained the right to freeze executive payouts at troubled banks. According to documents, roughly half the times it issued cease-and-desist orders this year, the OCC has granted an exemption on "golden parachute" standards.
Wells Fargo was urged to come clean about the scope of the phony-accounts scandal in Congress. Emails, memos and meeting minutes from the bank's inner workings have been asked to be shared by Democrats on the Senate Banking Committee. But the has largely declined.
(Source:www.reuters.com)
The Office of the Comptroller of the Currency, the main regulator for federal banks said that the lender must also now seek prior approval before naming new bank leadership.
At a time when some lawmakers complain bank bosses have not paid a fair price for their part in financial scandals, this move may target executive pay at Wells Fargo.
To settle charges that bank employees opened as many as 2 million accounts without customers' knowledge, Wells Fargo agreed to pay $190 million in September. The San Francisco-based bank that fired 5,300 employees involved said that the fraud went on for at least five years.
John Stumpf, the firm's chief executive officer, resigned and Congressional hearings followed news of the scandal.
Meanwhile, the September settlement with Wells Fargo remained relatively lax.
In that agreement, the OCC exempted Wells Fargo from some controls on "golden parachutes". The OCC said that the latest move puts Wells Fargo under toughened standards for oversight and voids those earlier allowances.
"The OCC informed the Bank today that it has revoked... relief from specific requirements and limitations regarding rules, policies, and procedures for corporate activities," the agency said in a Friday evening statement.
The bank is on track to restore its reputation and business, a Wells Fargo official said. "This will not inhibit our ability to execute our strategy, rebuild trust and serve our customers," said spokeswoman Jennifer Dunn.
According to a Reuters review of securities filings, in the wake of the scandal, Stumpf and Carrie Tolstedt, former head of retail banking, did relinquish about $60 million in stock. But according ot the filings, the pair also stood to take home more than $350 million in compensation.
According to the September settlement, Wells Fargo "is not subject to the limitation on golden parachute and indemnification payment." An eight-page stipulation exempts the bank from "requiring OCC approval of a change in directors and senior executive officers" and that allowance on executive pay appears in the stipulation.
According to banking rules, the OCC could have asked that incoming executives satisfy tests of "experience, character or integrity" if it has asserted its right to screen Wells Fargo executives.
While exemptions are common, after the savings and loan crisis of the 1980s and 1990s, regulators gained the right to freeze executive payouts at troubled banks. According to documents, roughly half the times it issued cease-and-desist orders this year, the OCC has granted an exemption on "golden parachute" standards.
Wells Fargo was urged to come clean about the scope of the phony-accounts scandal in Congress. Emails, memos and meeting minutes from the bank's inner workings have been asked to be shared by Democrats on the Senate Banking Committee. But the has largely declined.
(Source:www.reuters.com)
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