Senator Corker: 'Legitimate concerns' over scale of Wells Fargo account scandal
The scope and length of time of the unsolicited account mess at Wells Fargo needs to be investigated, Sen. Bob Corker told CNBC on Tuesday, ahead of the morning hearing before his Senate Banking Committee panel.
The Tennessee Republican said there are "legitimate concerns" over the practices that led to the bank's $185 million settlement with regulators earlier this month over charges employees boosted their sales targets and bonuses by opening accounts for unsuspecting customers.
Corker said he wants to get to the bottom of how these kind of practices "could have been going on and for so long with so many people in the bank."
"It was kind of interesting that internal controls didn't flag what was happening here," he added.
In prepared testimony, Wells Fargo Chairman and Chief Executive John Stumpf said he's "deeply sorry" for the unauthorized account scandal, and takes "full responsibility."
Last week, Stumpf told CNBC's "Mad Money" he holds himself accountable, but does not plan to resign.
Corker said a focus will also be on Carrie Tolstedt, the Wells Fargo executive in charge of the unit where employees opened as many as 2 million unauthorized customer accounts. She retires at the end of the year, according to a bank announcement in July.
There are accounts Tolstedt was a "workaholic," Corker said, adding she was reported to be "very, very micro-focused, and yet at the same time systemically there was something happening at the bank."
According to a Wells Fargo proxy statement, Tolstedt accumulated stock and options over the course of her career at the bank of $95 million, based on when the stock was trading around $49 per share.
"There are also questions about what the role the regulators played. Was this really something an LA Times reporter figured out was occurring or did our folks involved in regulating this actually play a role?" Corker said.
Wells Fargo last Tuesday said it would eliminate retail banking product sales goals, starting next year.
Hours later, CFO John Shrewsberry blamed underperforming employees struggling to meet goals for the lapses. Speaking at a banking conference in New York, he said 10 percent of the 5,300 employees fired were branch managers or more senior staffers.
Last week, The Wall Street Journal reported that federal prosecutors were investigating Wells Fargo over the unauthorized accounts. The investigation is in its early stages and prosecutors have yet to decide whether they would pursue a civil or criminal case, if either, according to the Journal.