Following the biggest penalty yet issued by the Consumer Financial Protection Bureau and an epic grilling by Senator Elizabeth Warren, Wells Fargo CEO John Stumpf resigned from his position on the Federal Advisory Council which advises the Federal Reserve.
Stumpf has now agreed to forfeit over $41 million in equity and salary while an independent investigation of the company’s practice of opening unauthorized bank accounts proceeds, and another executive has also forfeited an additional $19 million
The bank also said on Tuesday that Carrie Tolstedt, the former head of the community banking division, had left the company and would not receive a severance payment. She forfeited about $19 million in outstanding unvested equity awards and would not exercise her outstanding options during the investigation, Wells Fargo said.
Neither Stumpf or Tolstedt would receive a bonus for 2016, the bank said in a statement.
Stumpf has not yet resigned from his position as CEO as Senator Warren said he should, but that certainly looks more likely now than it did yesterday.
Wells Fargo’s independent investigation would not be taking place today, their executives would still be collecting enormous benefits, and hundreds of thousands of unauthorized accounts may still be open if the Consumer Financial Protection Bureau had not been created or investigated Wells Fargo.
Congressional Republicans fought a years-long battle against the consumer protection agency. They opposed its creation, they opposed its ability to enforce the law, and even they opposed the appointment of an agency director for more than a year.
Senator Warren was once poised to be named the director of the agency, but Republicans blocked her confirmation, forcing President Obama to make a recess appointment.
On numerous occasions over the past 6 years, Republicans attempted to defang the agency by inserting language that would weaken its regulatory power into basic, unrelated government funding bills.
If Republicans had their way, Wells Fargo would still be ripping off millions of customers.
The Consumer Financial Protection Bureau opened its investigation of Wells Fargo after being tipped off by the Los Angeles Times.