With Rep. Hensarling threatening that the Wells Fargo debacle is "only in its 3rd inning," it appears today's Labor Department probe was enough to push CEO Stumpf over the edge as pressure mounts for his head. Effective today, John Stumpf has resign his position as the Federal Reserve Bank of San Francisco’s appointee to the Fed’s Federal Advisory Council.
Following the earlier Labor Department probe, Rep. Hensarling added to the pressure for Stumpf's (or regulators') heads…
"We're probably only in the third inning. There's lots more to go here and we're only starting investigation now,"
And now, as Bloomberg notes, Wells Fargo chief executive officer John Stumpf has resigned from his position as the Federal Reserve Bank of San Francisco’s appointee to the Fed’s Federal Advisory Council.
- *SAN FRANCISCO FED: WELLS FARGO CEO STUMPF QUITS FED PANEL
- *JOHN STUMPF MADE `PERSONAL DECISION' TO RESIGN FROM FED PANEL
- *STUMPF'S `TOP PRIORITY IS LEADING WELLS FARGO,' SPOKESMAN SAYS
- Richard E. Holbrook, First District
- James P. Gorman, Second District
- Scott V. Fainor, Third District
- Paul G. Greig, Fourth District
- Kelly S. King, Fifth District
- O.B. Grayson Hall, Jr., Sixth District
- Frederick H. Waddell, Seventh District
- Ronald J. Kruszewski, Eight District
- Patrick J. Donovan, Ninth District
- Jonathan M. Kemper, Tenth District
- Ralph W. Babb, Jr., Eleventh District
- John G. Stumpf, Twelfth District
- Herb Taylor, Secretary
The resignation follows the earlier reported news that seven senators called for a Department of Labor investigation into Wells Fargo's firing of more than 5,000 employees. The senators, who were later joined by Elizabeth Warren, called into question whether the bank violated the Fair Labor Standards Act. The other senators who signed the letter to the Department of Labor are Sherrod Brown, Jack Reed, Robert Menendez, Bernie Sanders, Jeff Merkley, Kirsten Gillibrand and Mazie Hirono.
The senators' letter was triggered by a Consumer Financial Protection Bureau investigation into Wells Fargo. The bureau settled with the bank for $185 million over the phony accounts earlier in September, but it also cited the bank's alleged abusive labor practices. As CNN reports, the CFPB found that Wells Fargo had cultivated "a workplace characterized by stringent sales quotas and aggressive incentives imposed on its employees."
It also determined that there was "staggering neglect by management of the obvious consequences to consumers of those quotas and incentives." In their letter, the senators noted that employees were complaining about wage and hour violations as far back as 1999.
One of the biggest questions is whether Wells Fargo ignored overtime laws. Employees who worked late or on weekends to meet sales quotas reportedly weren't compensated and may even have been classified as exempt from overtime.