Wells Fargo& Co.'s unauthorized accounts scandal dominated the Beltwaynews cycle this week as politicians were able to put aside partisan differencesto beat up on the bank.
Chairman and CEO John Stumpf testified in front of theSenate Banking Committee on Sept. 20, and his performance was poor.Bank-bashing Sen. Elizabeth Warren, D-Mass., took the harshest line, calling onStumpf to resign. For only firing low-level employees after news broke, Warrenexcoriated Stumpf for "gutless leadership."
Stumpf's answers deferred to the board, saying any clawbackdecisions would be up to them. While it might have been technically correct, itwas not, to some, the bestkind of correct.
At the Los AngelesTimes, columnist Michael Hiltzik wrote that Stumpf's testimony was "aclinic in how to weasel out of real accountability."
Even Wall Street insiders were disappointed in theexecutive's performance. CNBC personality Jim Cramer was unimpressed byStumpf's testimony.
"It just wasn't satisfying, and I've never seen theRepublicans and the Democrats come together so quickly," Cramer said.
Even pundits who wanted to defend Stumpf had trouble withthe testimony. Fox Business' Steve Tobak wrote a columntitled, "In Defense of John Stumpf and Wells Fargo," that includedthe zinger: "To be blunt, I thought Stumpf came across sort of weaselly."
There was at least one full-throated defense of Stumpf, butit simply side-stepped his Senate testimony. Writing for CNBC, Notre Damefinance professor Priyank Gandhi arguedthe scandal was largely inconsequential to Wells Fargo's bottom line and thatultimately "there will be no serious repercussions or consequences fromthe scandal."
Also at CNBC, John Marino offered a different view by notingthat Stumpf will be out by 2018 at the latest, when he turns 65, the age atwhich Wells Fargo executives typically leave.
Rep. Robert Pittenger, R-N.C., did his best to takethe heat off Stumpf. In a Sept. 22 interview with the BBC, theHouse Financial Services Committee member made comments that he quicklyregretted.
Pressed on why protestors in Charlotte, N.C., whichoverlaps with Pittenger's district, had taken to the streets, therepresentative initially tried to pin the issue on Democrats and the welfarestate. The BBC interviewer pushed back, arguing that protestors were surely notupset with President Lyndon B. Johnson. That was when Pittenger stepped in it.
"Thegrievance in their mind is the animus, the anger. They hate white peoplebecause white people are successful and they're not," Pittenger said.
Withinhours, Pittenger tweetedan apology and issued an officialstatement apologizing for the interview.
CFPB Director Richard Cordray spoke this week at aconference of the National Association of Federal Credit Unions, asking if theCFPB could be friends with credit unions. Judging by the , Cordray will need to lookelsewhere for companionship.
A letter from Cordray regarding next week's WellsFargo hearing laid the groundwork for what will likely be a contentious hearingfor the CFPB. American Banker reportedon Sept. 22 that Cordray responded to a demand for all relevant data by sayingthat ongoing investigations will prevent disclosure of certain confidential information.Committee Chairman Jeb Hensarling, R-Texas, has made it clear he thinks theCFPB should have acted quicker on the scandal and has previously criticizedCordray for being unresponsive to committee requests.
The CFPB took two enforcement actions this week. Theregulator on Sept. 21 suedfive title lenders in Arizona for failing to disclose accurate annualpercentage rates in their advertising. And on Sept. 23, the agency announced alawsuit against a credit repair company for charging a series of illegaladvance fees.
Rep. Patrick McHenry, R-N.C., introducedthe Financial Services Innovation Act of 2016, which calls for a federalregulatory framework to enable innovation in the rapidly growing financialtechnology space. The legislation would require 12 federal regulators to createFinancial Services Innovation Offices within their agencies.
Bills were introduced in both the Senate and the House thisweek to amend the Federal Deposit Insurance Act so that prepaid funds at aninsured depository would qualify for the primary purpose exclusion. Rep. ScottTipton, R-Colo, introduced H.R. 6162 in the House, and Sen. Mark Warner, D-Va.,introduced S. 3373 in the Senate.