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Regulator Reverses Course, Tightens Controls on Wells Fargo After Scandal

Image: Regulator Reverses Course, Tightens Controls on Wells Fargo After Scandal

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Friday, 18 Nov 2016 08:05 PM

A leading U.S. bank regulator on Friday reversed course and revoked Wells Fargo & Co.'s right to shield the pay of former executives after a phony-accounts scandal.

The lender also must now seek prior approval before naming new bank leadership, said the Office of the Comptroller of the Currency, the main regulator for federal banks.

Wells Fargo in September agreed to pay $190 million to settle charges that bank employees opened as many as 2 million accounts without customers' knowledge.

The OCC exempted Wells Fargo from some controls on "golden parachutes" in that settlement. The move Friday evening voids those earlier allowances, the OCC said.

"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.

An OCC official said the move puts Wells Fargo under toughened standards for oversight which the agency had exempted in the original settlement.

John Stumpf, the departed chief executive officer, and Carrie Tolstedt, former head of retail banking, did relinquish about $60 million in stock, in the wake of the scandal according to a Reuters review of securities filings.

But the pair also stood to take home more than $350 million in compensation, according to filings.

The move on Friday positions the regulator to claw back those payouts, said an official who was not authorized to speak.

© 2017 Thomson/Reuters. All rights reserved.

   
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A leading U.S. bank regulator on Friday reversed course and revoked Wells Fargo's right to shield the pay of former executives after a phony-accounts scandal.
wells fargo, regulator, controls, pay
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2016-05-18
Friday, 18 Nov 2016 08:05 PM
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