THE HONORABLE MAXINE WATERS, CHAIRWOMAN

THE HONORABLE AL GREEN, CHAIRMAN, SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS

116TH CONGRESS, SECOND SESSION

MARCH 2020

This report has not been officially adopted by the Committee on Financial1

Services and may not necessarily reflect the views of its Members 

THE REAL WELLS FARGO:

BOARD & MANAGEMENT FAILURES, CONSUMER ABUSES, AND

INEFFECTIVE REGULATORY OVERSIGHT

REPORT PREPARED BY THE MAJORITY STAFF OF THE 

COMMITTEE ON FINANCIAL SERVICES, U.S. HOUSE OF REPRESENTATIVES
1 

Table of Contents

Executive Summary ................................................................................................................. 4

I. Introduction ................................................................................................................... 6

II. Background on Wells Fargo........................................................................................... 9

III. The Committee Staff’s Investigation............................................................................14

A. Consent Orders..........................................................................................................15

1. 2016 Sales Practices Consent Orders. ......................................................................15

2. 2018 Federal Reserve Consent Order. ......................................................................18

3. 2018 Compliance Risk Management Consent Orders..............................................19

B. Key Wells Fargo Board Members & Senior Executives ...........................................21

IV. Committee Staff Findings.............................................................................................23

A. Before the 2016 and 2018 Consent Orders, Financial Regulators Knew About

Serious Enterprise-Wide Deficiencies at Wells Fargo for Years Without Alerting the

Public......................................................................................................................................23

1. From 2009 through 2016, the OCC failed to take serious action to address Bank

sales practices that the OCC knew posed danger to consumers. ....................................23

2. From 2013 through 2017, the Federal Reserve wrote non-public supervisory letters

to Wells Fargo in an unsuccessful effort to compel the Company to fix its pervasive risk

management deficiencies. ................................................................................................25

3. For years prior to its 2018 Compliance Risk Management Consent Order, the OCC

took ineffective, non-public actions in a failed attempt to require Wells Fargo to correct

its weak controls over UDAP risks. .................................................................................30

B. After the Bank’s Consumer Abuses Became Public and the Regulators Issued

Consent Orders, Wells Fargo’s Board Failed to Ensure Management Could Competently

Address the Company’s Risk Management Deficiencies ....................................................31

1. The board failed to ensure the Bank had managers with sufficient compliance

expertise............................................................................................................................31

2. Instead of building its compliance risk management system with in-house

employees, the Bank outsourced compliance to outside consultants..............................33

C. Wells Fargo and Political Appointees at the CFPB had Backchannel

Communications Regarding the CFPB’s Compliance Risk Management Consent Order .34

D. Wells Fargo’s Board Allowed Management to Repeatedly Submit Materially

Deficient Plans in Response to the Consent Orders ...........................................................36

1. Wells Fargo submitted multiple deficient plans that required board review (and

with regards to plans required by the OCC, board approval) in response to the 2016

Sales Practices Consent Orders. ......................................................................................36
2 

2. Despite repeated and consistent feedback from Federal Reserve staff, Wells Fargo

repeatedly submitted materially incomplete plans in response to the 2018 Federal

Reserve Consent Order. ...................................................................................................37

3. Wells Fargo submitted multiple deficient plans in response to the 2018 Compliance

Risk Management Consent Orders..................................................................................39

E. Wells Fargo’s Board and Management Prioritized Financial and Other

Considerations Above Fixing Issues Identified by Regulators ...........................................41

1. Wells Fargo’s Chief Risk Officer wanted to limit remediation to consumers and

manipulate regulators......................................................................................................41

2. Until 2017, Wells Fargo had a policy allowing the Bank to misuse the attorneyclient privilege to hide documents from its regulators and board, and the Bank

withheld documents from the independent consultant tasked with evaluating the

Bank’s sales practices and informing its compliance plan. .............................................42

3. The board abdicated its responsibility to oversee the Bank’s compliance with the

2016 Sales Practices Consent Orders. .............................................................................44

4. Wells Fargo continued to focus on growth after regulators identified unchecked

risks associated with growth and new initiatives. ..........................................................46

5. Key leaders at Wells Fargo were focused on lifting the Federal Reserve’s asset cap,

rather than addressing the Company’s systemic risk management weaknesses...........47

6. Wells Fargo leaders sought to remove language from the OCC’s press release......54

7. Key Leaders at Wells Fargo were focused on financial considerations, rather than

addressing the Bank’s compliance failures identified by the OCC. ................................54

F. Wells Fargo’s Board Did Not Hold Senior Management Accountable for Repeatedly

Failing to Meet Regulators’ Expectations ...........................................................................55

G. Sloan Gave Inaccurate and Misleading Testimony About Wells Fargo’s Progress

During the March 12, 2019 Committee Hearing ................................................................61

H. The Potential for Widespread Consumer Abuse at Wells Fargo Remains ..............62

1. Wells Fargo has yet to submit fully satisfactory plans to address the governance

and risk management weaknesses identified by the Federal Reserve. ..........................62

2. In 2019, Wells Fargo’s risk management infrastructure remained dangerously

broken. ..............................................................................................................................62

3. The Bank continues to engage in consumer abuses. ................................................62

4. The regulators continue to express dissatisfaction with the Bank’s progress.........64

5. Wells Fargo’s employees continue to express concerns about the Company’s

culture...............................................................................................................................66

V. Policy Recommendations ..............................................................................................66

1. Congress should compel regulators to act against recidivist megabanks, like Wells

Fargo, that engage in widespread consumer abuses. ......................................................67
3 

2. Congress should strengthen the regulators’ authorities and enhance bank

management and board accountability............................................................................69

3. Congress should require greater transparency regarding bank supervision and how

banks treat consumers. ....................................................................................................70

4. Congress should enhance bank compensation practices. .........................................73

5. Congress should pass a bank workers’ bill of rights.................................................73

VI. Conclusion .....................................................................................................................73

VII. Appendices ....................................................................................................................75
4 

Executive Summary

For at least the past fifteen years, one of America’s largest financial institutions, Wells 

Fargo (i.e., Wells Fargo Bank, N.A. and Wells Fargo & Company, collectively), has failed to 

correct serious deficiencies in its infrastructure for managing risks to consumers and 

complying with the law. As a result, Wells Fargo’s customers have been exposed to countless 

abuses, including racial discrimination, wrongful foreclosure, illegal vehicle repossession, 

and fraudulently opened accounts. 

In response to these issues, the Consumer Financial Protection Bureau (“CFPB”), the 

Office of the Comptroller of the Currency (“OCC”), and Federal Reserve, took public 

enforcement actions against Wells Fargo in 2016 and 2018. These actions resulted in the 

agencies entering into five separate consent orders with Wells Fargo: the CFPB’s and OCC’s 

September 8, 2016 sales practices consent orders; the Federal Reserve’s February 2, 2018 

risk management consent order; and the CFPB’s and OCC’s April 20, 2018 compliance risk 

management consent orders. Under each of the aforementioned consent orders, Wells Fargo 

committed to take steps to remediate harmed customers and develop effective internal 

controls over risks such as employee misconduct. To date, Wells Fargo has yet to fully satisfy 

any of the aforementioned orders.

In February 2019, Representative Maxine Waters, Chairwoman of the U.S. House of 

Representatives Committee on Financial Services (“Committee”), initiated an investigation 

to (1) determine and evaluate the non-public actions taken by Wells Fargo’s board, 

management, and regulators to facilitate improvements at Wells Fargo; and (2) identify 

policy solutions to ensure consumers are protected from recidivist megabanks like Wells 

Fargo. This Committee staff report details the results of the Committee staff’s investigation.

Part I provides a brief introduction to the Committee staff’s investigation, including 

the key events preceding it. Part II includes a description of Wells Fargo, an institution that, 

on one hand, boasts a near-ubiquitous presence in the financial dealings of everyday 

Americans, and on the other hand, has faced widespread criticism for its lengthy record of 

consumer abuses. Part III describes the Committee staff’s investigation, summarizes the five 

relevant consent orders, and identifies a number of key individuals at Wells Fargo involved 

in the Company’s response to the five consent orders. 

Part IV, citing records obtained and witness interviews conducted during the course 

of this investigation, details Committee staff’s findings that: 

(A) financial regulators knew about serious, enterprise-wide deficiencies at Wells

Fargo for years without taking public enforcement action;

(B) Wells Fargo’s board of directors failed to ensure management could competently

address the Company’s risk management deficiencies;

(C) Wells Fargo and CFPB political appointees had backchannel communications

regarding the CFPB’s Compliance Risk Management Consent Order;

(D) Wells Fargo’s board of directors allowed management to repeatedly submit

materially deficient plans to regulators in response to the consent orders;
5 

(E) both Wells Fargo’s board and management prioritized financial and other

considerations above fixing the issues identified by regulators;

(F) Wells Fargo’s board did not hold senior management accountable for repeatedly

failing to meet regulators’ expectations;

(G) former Wells Fargo CEO Timothy J. Sloan gave inaccurate and misleading

testimony to Congress during a March 2019 Committee hearing; and,

(H) the potential for widespread consumer abuse still remains at Wells Fargo.

Part V provides policy recommendations to enhance accountability for recidivist

megabanks like Wells Fargo, along with their senior management and board of directors. 

Additional policy recommendations would promote transparency and market discipline, 

strengthen consumer protections, and empower responsible bank employees. Part VI 

concludes this report. 
6 

I. Introduction

In 2016 and 2018, Wells Fargo Bank, N.A., and its holding company, Wells Fargo & 

Company (collectively, “Wells Fargo”) entered into five consent orders with the Consumer 

Financial Protection Bureau (“CFPB”), Office of the Comptroller of the Currency (“OCC”), 

and Federal Reserve System (“Federal Reserve”) to settle the regulators’ allegations of 

widespread consumer abuses and compliance failures within Wells Fargo. In February 2019, 

Representative Maxine Waters, Chairwoman of the U.S. House of Representatives 

Committee on Financial Services (“Committee”), initiated an investigation into Wells Fargo’s 

progress toward designing and implementing the risk management reforms and customer 

remediation programs required by the five consent orders, which remain open as of the date 

of this report. 

Specifically, the Committee staff’s investigation examined Wells Fargo’s compliance 

with the CFPB’s and OCC’s September 8, 2016 sales practices consent orders (collectively, 

“2016 Sales Practices Consent Orders”); the Federal Reserve’s February 2, 2018 risk 

management consent order (“2018 Federal Reserve Consent Order”); and the CFPB’s and 

OCC’s April 20, 2018 compliance risk management consent orders (collectively, “2018 

Compliance Risk Management Consent Orders”). 

On February 25, 2019, Chairwoman Waters formally scheduled Wells Fargo’s thenChief Executive Officer (“CEO”) and President, Timothy J. Sloan, to testify before the 

Committee on March 12, 2019.1 Chairwoman Waters specifically requested that Sloan’s 

testimony cover, among other things, “Wells Fargo’s efforts to remediate consumers affected 

by its various instances of wrongdoing,” and “Wells Fargo’s varied engagements with its 

regulators, including the bank’s compliance with its outstanding consent orders” with the

CFPB, OCC, and Federal Reserve.2

During the March 12, 2019 Committee hearing, Mr. Sloan made several comments 

regarding Wells Fargo’s efforts to comply with the 2016 and 2018 consent orders. For 

example, in response to Chairwoman Waters’ question about the statuses of the remediation 

plans that Wells Fargo must submit for the CFPB’s and OCC’s approval under the 2018 

Compliance Risk Management Consent Orders, Mr. Sloan, testified, “We are in compliance 

with those plans” (emphasis added).3 

Additionally, in response to a question from Representative Nydia Velázquez 

regarding the status of the Bank’s compliance with the 2018 Federal Reserve Consent Order, 

Sloan suggested that Wells Fargo had completed the governance reforms required by the

1 Letter from Chairwoman Maxine Waters to Timothy Sloan, President & Chief Executive Officer, 

Wells Fargo (Feb. 25, 2019).

2 Id.

3 House Financial Services Committee, Hearing on Holding Megabanks Accountable: An 

Examination of Wells Fargo's Pattern of Consumer Abuses, 116th Cong at 6-7 (Mar. 12, 2019) (Serial 

No. 116-7), available at https://www.govinfo.gov/content/pkg/CHRG-116hhrg36462/pdf/CHRG116hhrg36462.pdf. 
7 

Federal Reserve, stating,“[a]s part of the consent order with the Fed, they want us to improve 

the Board governance and oversight, which we have done (emphasis added).”4

5Immediately following Sloan’s testimony, the OCC issued a written statement 

expressing its dissatisfaction with Wells Fargo’s progress towards complying with its consent 

orders. According to the Wall Street Journal, the OCC wrote:

On March 13, 2019, the day after Sloan’s testimony before the Committee, Wells Fargo 

announced in its annual proxy statement that the Company’s board had awarded Sloan $18.4 

million in compensation for 2018, including a $2 million performance bonus.6 Following Wells 

Fargo’s announcement, the Federal Reserve issued an email statement to the press stating, 

“[t]he Federal Reserve does not approve pay packages. We expect boards of directors to hold 

management accountable.”7 Wells Fargo’s board’s decision to award Sloan a performance 

bonus for 2018—a year in which the Federal Reserve capped the Company’s growth and other 

federal agencies fined the Company $3 billion collectively—received public rebuke from 

lawmakers, including Chairwoman Waters, who called for Sloan’s resignation.8 

4 Id. at 76. 

5 Rachel Louise Ensign and Andrew Ackerman, Regulator Slams Wells Fargo After CEO Testifies to 

Congress, The Wall Street Journal (Mar. 12, 2019), available at https://www.wsj.com/articles/wellsfargo-ceo-faces-aggressive-questions-from-congress-11552408186. 6 WFC, Wells Fargo 2019 Proxy Statement at 82, available at

https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/annual-reports/2019-proxystatement.pdf. 7 Imani Moise, Pete Schroeder, Wells Fargo CEO’s pay raise draws rare Fed response, Reuters (Mar. 

13, 2019), available at https://www.reuters.com/article/uk-wells-fargo-compensation/wells-fargo-ceospay-raise-draws-rare-fed-response-idUKKCN1QU35B. 8 House Financial Services Committee, Waters Blasts Wells Fargo for Bonus to Sloan, Calls for his 

Removal (Mar. 14, 2019), available at 

https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=402473. 

WE CONTINUE TO BE DISAPPOINTED WITH [WELLS FARGO’S] 

PERFORMANCE UNDER OUR CONSENT ORDERS AND ITS 

INABILITY TO EXECUTE EFFECTIVE CORPORATE GOVERNANCE 

AND A SUCCESSFUL RISK MANAGEMENT PROGRAM. WE 

EXPECT NATIONAL BANKS TO TREAT THEIR CUSTOMERS 

FAIRLY, OPERATE IN A SAFE AND SOUND MANNER, AND 

FOLLOW THE RULES OF LAW.

5
8 

On March 26, 2019, Sloan announced his decision to step down as Wells Fargo’s CEO 

and President, and from his position on Wells Fargo’s board.9 In a conference call with 

analysts two days later, Sloan stated, “While I’m confident in my ability to effectively lead 

Wells Fargo through the work that remains to be done, it has become apparent that the focus 

on me has become a distraction that impacts our ability to successfully move Wells Fargo 

forward.”10

On April 10, 2019, Chairwoman Waters and Representative Al Green, Chairman

of the Subcommittee on Oversight and Investigations, sent document request letters 

to Wells Fargo, the OCC, the CFPB, and the Federal Reserve.11 In May 2019, 

Chairwoman Waters and Chairman Green sent document request letters to current and 

former Wells Fargo board members.12 The letters requested the production of records 

relating to the 2016 Sales Practices Consent Orders, the 2018 Federal Reserve 

Consent Order, and the 2018 Compliance Risk Management Consent Orders. 

Additionally, the letters to Wells Fargo and its board members requested the production of 

records relating to former-CEO Sloan’s 2018 executive compensation. 

The Committee staff’s investigation reveals the prolonged failure of Wells Fargo’s 

board and management to satisfy the terms of the consent orders and establish the 

safeguards necessary to protect consumers from harm. Additionally, the Committee staff’’s 

investigation reveals that financial regulators took insufficient and non-public action for 

9 WFC, Wells Fargo CEO and President Tim Sloan to Retire; Board of Directors Elects Allen Parker 

as Interim CEO and President (Mar. 28, 2019), available at https://newsroom.wf.com/pressrelease/corporate-and-financial/wells-fargo-ceo-and-president-tim-sloan-retire-board. 

10 WFC, Conference Call with Analysts (March 28, 2019) – Transcript, available at

https://www08.wellsfargomedia.com/assets/pdf/about/investorrelations/presentations/2019/conference-call-transcript.pdf. 

11 Letter from Chairwoman Maxine Waters and Chairman Al Green to Jerome Powell, Chairman, 

Federal Reserve (Apr. 10, 2019); Letter from Chairwoman Maxine Waters and Chairman Al Green to 

Joseph Otting, Comptroller of the Currency, OCC (Apr. 10, 2019); Letter from Chairwoman Maxine 

Waters and Chairman Al Green to Director Kathleen Kraninger, CFPB (Apr. 10, 2019); Letter from 

Chairwoman Maxine Waters and Chairman Al Green to C. Allen Parker, Interim Chief Executive 

Officer and President, Wells Fargo (Apr. 10, 2019). 

12 Letter from Chairwoman Maxine Waters and Chairman Al Green to Celeste Clark, Director, WFC 

(May. 1, 2019); Letter from Chairwoman Maxine Waters and Chairman Al Green to Donald James, 

Director, WFC (May. 1, 2019); Letter from Chairwoman Maxine Waters and Chairman Al Green to 

Elizabeth Duke, Chair of the Board of Directors, WFC (May. 1, 2019); Letter from Chairwoman 

Maxine Waters and Chairman Al Green to John Baker II, Director, WFC (May. 1, 2019); Letter from 

Chairwoman Maxine Waters and Chairman Al Green to Juan Pujadas, Director, WFC (May. 1, 

2019); Letter from Chairwoman Maxine Waters and Chairman Al Green to James Quigley, Director, 

WFC (May. 1, 2019); Letter from Chairwoman Maxine Waters and Chairman Al Green to Maria 

Morris, Director, WFC (May. 1, 2019); Letter from Chairwoman Maxine Waters and Chairman Al 

Green to Ronald Sargent, Director, WFC (May. 1, 2019); Letter from Chairwoman Maxine Waters 

and Chairman Al Green to Suzanne Vautrinot, Director, WFC (May. 1, 2019); Letter from 

Chairwoman Maxine Waters and Chairman Al Green to Theodore Craver, Jr., Director, WFC (May. 

1, 2019); Letter from Chairwoman Maxine Waters and Chairman Al Green to Wayne Hewett, 

Director, WFC (May. 1, 2019); Letter from Chairwoman Maxine Waters and Chairman Al Green to 

Karen Peetz, Director, WFC (May 10, 2019). 
9 

years while a high potential for consumer abuse persisted at Wells Fargo. Finally, the 

Committee staff’s investigation reveals that Wells Fargo’s board failed to hold senior 

management accountable for the Bank’s lack of progress under the consent orders, despite 

the performance concerns raised by regulators and certain board members.

II. Background on Wells Fargo

Wells Fargo Bank, N.A. (“Bank”) is a large, nationally chartered depository bank 

headquartered in Sioux Falls, South Dakota. The Bank is a subsidiary of Wells Fargo & 

Company (“WFC” or “Company”), a publicly traded bank holding company headquartered in 

San Francisco, California. WFC

does not manage the Bank’s dayto-day operations, but the 

Company exercises control over 

the Bank’s management team 

and has the authority to hire and 

fire the Bank’s managers, set 

company policies, and establish 

the Bank’s business strategy.13

WFC and its subsidiaries are 

collectively referred to in this 

report as “Wells Fargo.” 

Wells Fargo was founded 

in March 18, 1852,14 and it has 

grown in part through various 

mergers and acquisitions, including a 1998 merger with Norwest15 and an acquisition of 

Wachovia Corporation during the 2008 financial crisis.16 Today, Wells Fargo has one of the 

largest consumer banking footprints in the country, with more domestic branches than any 

other bank, 70 million customers, and a financial services presence in one in three U.S. 

households.17 The Bank is consistently among the three largest financial institutions for 

13 WFC, By-laws of Wells Fargo & Company (Mar. 1, 2018), available at 

https://www08.wellsfargomedia.com/assets/pdf/about/corporate/governance-by-laws.pdf. 14 WFC, History of Wells Fargo, available at https://www.wellsfargo.com/about/corporate/history/

15 Timothy L. O'Brien, Wells Fargo And Norwest Plan Merger, New York Times (Jun. 9, 1998), 

available at https://www.nytimes.com/1998/06/09/business/wells-fargo-and-norwest-planmerger.html. 16 See Testimony of Scott G. Alvarez, General Counsel, Federal Reserve before the Financial Crisis 

Inquiry Commission, The Acquisition of Wachovia Corporation by Wells Fargo & Company (Sep. 1, 

2010), available at https://www.federalreserve.gov/newsevents/testimony/alvarez20100901a.htm. 17 Federal Reserve, Federal Reserve Statistical Release, Large Commercial Banks (Dec. 31, 2019) 

(online at https://www.federalreserve.gov/releases/lbr/current/) (accessed Feb. 26, 2020); WFC Form 

10-Q for the Quarterly Period ending September 30, 2019 (Nov. 1, 2019) at 3 (Nov. 1, 2019), available

at https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/sec-filings/2019/thirdquarter-10q.pdf.

THE COMMITTEE STAFF’S 

INVESTIGATION REVEALS THE 

PROLONGED FAILURE OF WELLS 

FARGO’S BOARD AND MANAGEMENT TO 

SATISFY THE TERMS OF THE CONSENT 

ORDERS AND ESTABLISH THE 

SAFEGUARDS NECESSARY TO PROTECT 

CONSUMERS FROM HARM.
10

mortgage lending, mortgage servicing, and deposits.18 With $1.94 trillion in assets, Wells 

Fargo operates the fourth largest bank in the country.19 As of the end of 2019, Wells Fargo 

was also the tenth largest public company in the world based on sales, profits, assets, and 

market value.20 Wells Fargo has approximately 260,000 employees across 7,400 locations

worldwide.21 It is the nineteenth largest employer in the United States.22 

As a large, nationally-chartered bank, Wells Fargo is subject to laws and regulations 

designed to protect consumers and prohibit unsafe and unsound practices that could 

undermine the Bank or threaten the U.S. financial system. Along with the CFPB, which 

oversees compliance with federal consumer protection laws, there are three federal 

prudential regulators tasked with various duties to ensure that Wells Fargo’s board and 

management operate the Bank and its parent holding company, WFC, in a manner consistent 

with these laws: the Federal Reserve; the OCC; and the Federal Deposit Insurance 

Corporation (“FDIC”). Wells Fargo is also subject to regulation by the Securities and 

Exchange Commission (“SEC”), which oversees its compliance with federal securities laws 

and the SEC’s corporate governance rules. 

These federal regulators, particularly the prudential regulators, have a broad set of

supervisory, enforcement and other authorities to monitor banks and take corrective action

when banks break the law. Prudential regulators provide confidential exam ratings on 

different elements of a bank’s operations. For example, the Uniform Financial Institutions 

Rating System is the framework prudential regulators utilize to give banks a rating on each 

of six components – capital adequacy, asset quality, management, earnings, liquidity, and 

sensitivity to market risk (“CAMELS”) – as well as a composite score on a scale of 1 (strong)

18 CFPB, Data Point: 2018 Mortgage Market Activity and Trends (Aug. 2019), available at

https://files.consumerfinance.gov/f/documents/cfpb_2018-mortgage-market-activity-trends_report.pdf

(second in mortgage lending in 2018); Mortgage Bankers Association, MBA releases 2019 Mid-Year 

Commercial/Multifamily Servicer Rankings (Sept. 10, 2019), available at https://www.mba.org/2019-

press-releases/september/mba-releases-2019-mid-year-commercial/multifamily-servicer-rankings

(first in commercial and multifamily mortgage servicing as of June 30, 2019); WFC, Wells Fargo 

Today at 2 (4th Quarter 2019) (third largest bank in total deposits), available at 

https://www08.wellsfargomedia.com/assets/pdf/about/corporate/wells-fargo-today.pdf. 19 WFC Form 10-Q for the Quarterly Period ending September 30, 2019 at 3 (Nov. 1, 2019), available 

at https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/sec-filings/2019/thirdquarter-10q.pdf. 20 WFC, Wells Fargo Today at 2 (4th Quarter 2019), available at 

https://www08.wellsfargomedia.com/assets/pdf/about/corporate/wells-fargo-today.pdf. 21 WFC, Wells Fargo Today at 2 (4th Quarter 2019), available at 

https://www08.wellsfargomedia.com/assets/pdf/about/corporate/wells-fargo-today.pdf. 22 Id at 2. According to Wells Fargo’s 2018 Corporate Responsibility Report, the Company employs 

about 1 in 600 working Americans. See Wells Fargo, Wells Fargo & Company Corporate 

Responsibility Report 2018 at 3 and 11, available at

https://www08.wellsfargomedia.com/assets/pdf/about/corporate-responsibility/2018-corporateresponsibility-report.pdf. 
11

to 5 (critically deficient).23 There are similar rating systems used to assess a bank’s consumer 

compliance24 and provide consolidated supervision of a bank holding company’s operations.25

Furthermore, when banks fail to comply with the law, regulators can take a range of 

actions that are designed to escalate if the regulated entity does not correct its mistakes. 

Banking regulators can issue non-public supervisory findings to address weaknesses or 

deficiencies, often in the form of a “matter requiring attention” (“MRA”) or, in the case of the 

Federal Reserve, a “matter requiring immediate attention” (“MRIA”) notice.26 According to 

the Federal Reserve, an MRA is “a call for action to address weaknesses that could lead to 

deterioration in a banking organization’s soundness.”27 The Federal Reserve describes an 

MRIA as, “a call for more immediate action to address acute or protracted weaknesses that 

could lead to further deterioration in a banking organization’s soundness, may result in harm 

to consumers, or have caused, or could lead to, noncompliance with laws and regulations.”28

MRAs and MRIAs are confidential between the banking organization and the regulator, and 

are among the least severe actions a regulator might take when a company is failing to meet 

regulatory expectations.29 Regulators may also issue civil money penalties and enter into a 

consent order with a bank through a formal enforcement action. A formal enforcement action 

is public and, according to the Federal Reserve, is “designed to prevent, deter, and correct 

violations of law and unsafe and unsound banking practices.”30 Additionally, as discussed in 

a 2017 Committee staff report on Wells Fargo, there are bolder remedies available to 

prudential regulators that have been rarely used when a bank egregiously harms consumers 

and repeatedly breaks the law, including: placing limitations on the activities and functions

of a bank, requiring the disposition of loans and assets or otherwise restricting a bank’s lines 

of business, restricting a bank’s growth, directing a bank to remove senior officers and 

23 See FDIC, Statement of Policy – Uniform Financial Institutions Rating System (Jan. 1, 1997), 

available at https://www.fdic.gov/regulations/laws/rules/5000-900.html. 24 The CFPB and prudential regulators utilize the Uniform Consumer Compliance Rating System 

(“CC Rating System”) when examining a bank for consumer compliance and focuses on: board and 

management oversight; compliance program; and violations of law and consumer harm. Similar to 

the CAMELS ratings, the bank is rated on a scale between 1 (strong consumer compliance) and 5 

(critically deficient consumer compliance). See CFPB, CFPB Supervision and Examination Process – 

Examinations and Targeted Reviews (Feb. 2019), available at 

https://files.consumerfinance.gov/f/documents/cfpb_examination-process-section.pdf. 25 The Federal Reserve recently deployed a new, large financial institution (“LFI”) rating system that 

examines that is used to provide ratings on a large bank holding company’s: capital planning and 

positions; liquidity risk management and positions; and governance and controls. The Federal 

Reserve continues to use a RFI rating system for smaller bank holding companies that examines risk 

management (R), financial condition (F), and the impact of nonbanking activities (I). See Federal 

Reserve, Federal Reserve Board finalizes new supervisory rating system for large financial 

institutions (Nov. 2, 2018), available at

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20181102a.htm. 26 See Federal Reserve, Supervision and Regulation Report (Nov. 2019), at 21, available at

https://www.federalreserve.gov/publications/files/201911-supervision-and-regulation-report.pdf. 27 Id.

28 Id.

29 Id. 

30 Id. 
12

directors and permanently banning them from working in the industry, or appointing a

receiver to wind down a bank.31

The overlapping regulatory regimes under which Wells Fargo operates are intended

to facilitate comprehensive 

oversight of the Company’s

compliance with applicable 

financial laws and management 

of the risks associated with its 

activities. However, during the 

2008 financial crisis, unchecked 

predatory banking practices at 

Wells Fargo32 and other 

financial institutions and 

regulators’ inability to rein in 

such practices, harmed millions 

of consumers and contributed to 

the near collapse of the global 

economy.33 In the wake of the 

crisis, Congress created the 

CFPB and provided it and the 

prudential regulators with new 

authorities to police the banking industry, particularly with respect to financial institutions’ 

responsibilities to identify and address consumer abuses and other risks associated with their 

company’s banking activities.34 

Despite enhanced oversight of the banking industry following the crisis, Wells Fargo’s 

board, management, and regulators have each failed to ensure that the Company’s 

safeguards against consumer abuses are sufficient for Wells Fargo’s massive footprint. 

Countless consumers have suffered as a result. The following list of Department of Justice 

31 See, e.g., 12 USC § 1818 and House Financial Services Committee Democratic Staff Report, The 

Case For Holding Wells Fargo Accountable: An Examination of Wells Fargo’s Egregious Consumer 

Abuses (Sep. 29, 2017), at 21-23 available at

https://financialservices.house.gov/uploadedfiles/09.29.17_staff_report_final.pdf. 32 See, e.g., DOJ, Justice Department Reaches Settlement with Wells Fargo Resulting in More Than 

$175 Million in Relief for Homeowners to Resolve Fair Lending Claims (July 12, 2012)(resolving 

allegations that Wells Fargo overcharged borrowers of color for mortgage loans and wrongly steered 

them into subprime mortgages), available at https://www.justice.gov/opa/pr/justice-departmentreaches-settlement-wells-fargo-resulting-more-175-million-relief; FRB, Federal Reserve issues a 

consent cease and desist order and assesses civil money penalty against Wells Fargo (July 20, 2011)

(resolving allegations that Wells Fargo steered potential prime borrowers into higher-cost subprime 

loans), available at 

https://www.federalreserve.gov/newsevents/pressreleases/enforcement20110720a.htm. 33 See, e.g., The Financial Crisis Inquiry Report: Fina Report of the National Commission on the 

Causes of the Financial and Economic Crisis in the United States (Feb. 25, 2011), available at 

https://www.govinfo.gov/content/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf. 34 Consumer Financial Protection Act of 2010, 12 U.S.C. § 5481 et seq. 

DESPITE ENHANCED OVERSIGHT OF 

THE BANKING INDUSTRY FOLLOWING 

THE CRISIS, WELLS FARGO’S BOARD, 

MANAGEMENT, AND REGULATORS 

HAVE EACH FAILED TO ENSURE THAT 

THE COMPANY’S SAFEGUARDS 

AGAINST CONSUMER ABUSES ARE 

SUFFICIENT FOR WELLS FARGO’S 

MASSIVE FOOTPRINT.
13

(“DOJ”) and financial regulators’ findings provides a mere snapshot of the consumer abuses 

resulting from Wells Fargo’s critically deficient compliance and risk management 

infrastructures: 

• Discrimination against minority home loan borrowers: From 2004 through

2009, Wells Fargo Bank “engaged in a pattern or practice of discrimination” by

“systematically” charging African-American and Hispanic borrowers higher fees

and rates than similarly qualified white borrowers.35

• Fraudulent bank accounts: From January 1, 2011 to September 8, 2016,

thousands of Wells Fargo Bank employees enrolled millions of customers in

banking products and accounts without their knowledge or consent.36

• Erroneous mortgage fees: From September 2013 through February 2017, the

Bank inappropriately charged prospective home loan borrowers fees for extending

the period for a mortgage interest-rate lock, including when the Bank’s own delay

created the need for an extension.37

• Unnecessary auto insurance: Between October 2005 and September 2016, the

Bank forced hundreds of thousands of auto-loan borrowers to pay for unnecessary

insurance coverage for their vehicles. At least 27,000 of the Bank’s customers may

have had their vehicle repossessed following defaults arising from the added

insurance costs.38

• Servicemember abuse: Between 2006 and 2016, Wells Fargo Bank: (1) charged

servicemembers higher interest rates than allowed under federal law; (2) failed to

accurately disclose servicemembers’ active duty statuses to courts when those

servicemembers faced eviction proceedings; and (3) repossessed servicemembers’

vehicles without first obtaining a court order.39

35 DOJ, Justice Department Reaches Settlement with Wells Fargo Resulting in More Than $175 

Million in Relief for Homeowners to Resolve Fair Lending Claims (July 12, 2012), available at 

https://www.justice.gov/opa/pr/justice-department-reaches-settlement-wells-fargo-resulting-more175-million-relief. 36 See CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A. at 4 (Sept. 8, 2016), available at

https://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf. 37 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A. (Apr. 20, 2018), available at

https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bank-na_consent-order_2018-04.pdf;

38 See CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A. (Apr. 20, 2018), available at

https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bank-na_consent-order_2018-04.pdf;

OCC, OCC Assesses $500 Million Penalty Against Wells Fargo, Orders Restitution for Unsafe or

Unsound Practices (Apr. 20, 2018), available at https://www.occ.gov/news-issuances/newsreleases/2018/nr-occ-2018-41.html. 39 OCC, OCC Assesses Penalty Against Wells Fargo; Orders Restitution for Violations of the

Servicemembers Civil Relief Act at Article I (Sept. 29, 2016), available at

https://www.occ.gov/static/enforcement-actions/ea2016-081.pdf.
14

• Erroneous foreclosures and loan modification denials: In November 2018,

Wells Fargo reported that the Bank erroneously denied, or did not offer, a loan

modification to 870 customers due to an underwriting software error. The Bank

foreclosed on 545 of these customers based on the error.40 In recent public filings,

Wells Fargo has indicated that the previously disclosed number of affected

customers may change based on the Company’s ongoing review.41

• Improper sales of complex financial products: On June 25, 2018, Wells Fargo

Advisors LLC (“WFA”)42 settled securities fraud charges with the SEC related to

the sale of complex financial products to retail investors.43 According to the SEC,

from at least January 2009 through June 2013, WFA representatives improperly

solicited retail customers to actively trade market-linked investments (MLIs)

which were intended to be long-term holdings. The SEC found that the trading

strategy reduced the customers’ investment returns while generating substantial

fees for WFA.

These aforementioned consumer abuses highlight only a portion of the misconduct 

that has occurred across Wells Fargo. More alarmingly, Wells Fargo’s failure to date to

establish effective mechanisms for identifying and mitigating risks within the Company after 

reaching settlements with its regulators leaves consumers exposed to countless potential 

abuses that may be unknown to the firm’s management, board, regulators, or the public. 

III. The Committee Staff’s Investigation

In response to Chairwoman Waters’ and Chairman Green’s April and May 2019 

letters, Wells Fargo, its board members, and the regulators, collectively produced 

approximately 330,000 pages of records. In addition to reviewing these records, 

Committee staff received briefings from the Federal Reserve, OCC, CFPB, SEC, and 

Wells Fargo. Committee staff conducted interviews with key executives at Wells Fargo 

and the former Chair of the board’s Risk Committee. Additionally, Committee staff 

interviewed officials at the Federal Reserve, OCC, and CFPB. 

Committee staff’s review of the records and witness interviews reveal the following: 

• financial regulators knew about serious, enterprise-wide deficiencies at Wells

Fargo for years without alerting the public;

40 WFC Form 10-Q for the Quarterly Period Ending September 30, 2018 at 6 (Nov. 6, 2018), available 

at https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/sec-filings/2018/thirdquarter-10q.pdf. 41 WFC Form 10-Q for the Quarterly Period Ending September 30, 2019 at 5 (Nov. 1, 2019), available 

at https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/sec-filings/2019/thirdquarter-10q.pdf. 42 WFA is wholly owned by Wachovia Securities Financial Holdings, LLC, which is wholly owned by 

Wells Fargo.

43 SEC, Wells Fargo Advisors Settles SEC Charges for Improper Sales of Complex Financial Products

(June 25, 2018), available at https://www.sec.gov/news/press-release/2018-112. 
15

• Wells Fargo’s board of directors failed to ensure that management could

competently address the Company’s risk management deficiencies;

• Wells Fargo and political appointees at the CFPB had backchannel

communications regarding the CFPB’s Compliance Risk Management Consent

Order;

• Wells Fargo’s board of directors allowed management to repeatedly submit

materially deficient plans in response to the consent orders;

• Wells Fargo’s board of directors and management prioritized financial and

other considerations above fixing issues identified by regulators;

• Wells Fargo’s board of directors failed to hold senior management accountable

for repeatedly not meeting regulators’ expectations under the consent orders;

• during the Committee’s March 12, 2019 hearing, Wells Fargo’s then-CEO

Sloan gave inaccurate and misleading testimony about the status of Wells

Fargo’s compliance with the requirements of the 2018 Compliance Risk

Management consent orders; and

• the potential for widespread consumer abuse at Wells Fargo remains.

Part A of this section summarizes the requirements of five consent orders with respect 

to which the Committee investigated Wells Fargo’s compliance, specifically: the 2016 Sales 

Practices Consent Orders, the 2018 Federal Reserve Consent Order, and the 2018

Compliance Risk Management Consent Orders. Part B provides brief biographies of certain 

Wells Fargo directors and senior executives who, during the Committee staff’s investigation, 

Committee staff identified as playing a central role in Wells Fargo’s efforts toward complying 

with the five consent orders. Part C of this section details Committee staff’s findings, 

including with reference to records obtained and witness interviews conducted during the 

course of the Committee staff’s investigation.

A. Consent Orders

1. 2016 Sales Practices Consent Orders.

On September 8, 2016, the CFPB, OCC, and Office of the Los Angeles City Attorney 

fined Wells Fargo Bank collective penalties of $185 million for opening millions of deposit 

and credit-card accounts in customers’ names without their consent or knowledge.44

According to the CFPB, from January 1, 2011 to September 8, 2016, thousands of 

Wells Fargo Bank employees engaged in improper sales practices in connection with an 

44 See CFPB, Consumer Financial Protection Bureau Fines Wells Fargo $100 Million for Widespread 

Illegal Practice of Secretly Opening Unauthorized Accounts (Sept. 8, 2016), available at 

https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-fineswells-fargo-100-million-widespread-illegal-practice-secretly-opening-unauthorized-accounts/. 
16

aggressive incentive compensation program that encouraged employees to “cross-sell” 

banking products and services to existing customers.45 Wells Fargo employees: (1) opened 

unauthorized deposit accounts for existing customers; (2) submitted credit-card applications 

in customers’ names without their authorization; and (3) enrolled customers in onlinebanking services and requested debit cards on their behalf without their knowledge or 

consent.46 In August 2017, following a third-party review, Wells Fargo announced that its 

employees opened an estimated 3.5 million unauthorized accounts resulting in approximately 

$6.1 million in erroneous banking fees.47 

The OCC found that the Bank lacked an adequate oversight program to prevent and 

discover sales practices abuses as well as effective processes to monitor customer 

complaints.48 

The CFPB’s consent order (“CFPB Sales Practices Consent Order”), requires Wells 

Fargo to submit a plan to provide redress to harmed consumers.49 Additionally, the CFPB

Sales Practices Consent Order directed the Bank to retain an independent consultant to 

review sales practices at its branches and determine whether adequate policies and 

procedures exist to ensure compliance with federal consumer financial law.50 Part of that 

review included evaluating the adequacy of the Bank’s handling of consumer and employee 

complaints.51 The CFPB also mandated that Wells Fargo submit a compliance plan to correct 

any deficiencies identified by, and implement any recommendations of, the independent 

consultant.52 Under the terms of the CFPB’s Sales Practices Consent Order, the CFPB has 

to approve both the Bank’s compliance and redress plans.53 

45 See CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A. at 4 (Sept. 8, 2016), available at 

https://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf (hereinafter, 

“CFPB Sales Practices Consent Order”).

46 Id. 47 WFC, Wells Fargo Reports Completion of Expanded Third-Party Review of Retail Banking 

Accounts, Paving Way to Complete Remediation Effort (Aug. 31, 2017), available at 

https://newsroom.wf.com/press-release/wells-fargo-reports-completion-expanded-third-party-reviewretail-banking-accounts. 48 OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South Dakota, AA-EC2016-66 at Article I (Sept. 6, 2016), available at https://www.occ.gov/news-issuances/newsreleases/2016/nr-occ-2016-106b.pdf. 49 CFPB, Consumer Financial Protection Bureau Fines Wells Fargo $100 Million for Widespread 

Illegal Practice of Secretly Opening Unauthorized Accounts (Sept. 8, 2016), available at 

https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-fineswells-fargo-100-million-widespread-illegal-practice-secretly-opening-unauthorized-accounts/. 50 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A., 2016-CFPB-0015 at ¶¶39 - 44 

(Sept. 8, 2016), available at 

https://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf. 51 Id. at ¶40.

52 Id. at ¶42.

53 Id. at ¶43. 
17

Similar to the CFPB’s order, the OCC’s consent order (“OCC Sales Practices Consent 

Order”) also required Wells Fargo to submit a plan to compensate harmed consumers.54 The 

OCC also ordered the Bank to obtain an independent review of its sales practices but required

a broader analysis than the CFPB’s provision requiring independent review of the Bank’s

retail-branch operations. Specifically, the OCC ordered Wells Fargo to retain an independent 

consultant to review the Bank’s “enterprise-wide governance and risk management of sales 

practices” across its business lines and analyze what caused employees to open millions of 

unauthorized accounts.55 

Additionally, the OCC required the Bank to submit plans that would establish across 

its business lines: (1) a program to monitor sales practices and (2) policies and procedures for 

handling customer complaints.56 Under the OCC Sales Practices Consent Order, the Bank 

also had to review and revise its internal audit program to include sales practices, corporate 

investigations, customer complaints, and internal reports of ethics violations.57 The OCC 

Sales Practices Consent Order further directed Wells Fargo to submit a Comprehensive 

Action Plan describing how the Bank intended to satisfy all of the order’s requirements.58

The OCC then had to approve the Bank’s submissions as required under the terms of the 

consent order.

The 2016 Sales Practices Consent Orders contain provisions establishing that the

Bank’s board is responsible for satisfying the orders’ requirements. The OCC Sales Practices 

Consent Order explicitly states that “[t]he Board shall ensure that the Bank achieves and 

thereafter maintains compliance with this Order”59 and “has the ultimate responsibility for 

proper and sound management of the Bank.”60 The 2016 CFPB Sales Practices Consent Order 

dictates that “[t]he Board will have the ultimate responsibility for proper and sound 

management of [the Bank] and for ensuring that [the Bank] complies with Federal consumer 

financial law and this Consent Order.”61 Both consent orders obligate the board to review 

(and in the case of the 2016 OCC Sales Practices Consent Order, to approve) all submissions, 

including compliance and remediation plans required under the terms of the orders.62

54 OCC, OCC Assesses Penalty Against Wells Fargo, Orders Restitution for Unsafe or Unsound Sales 

Practices (Sept. 8, 2016), available at https://www.occ.gov/news-issuances/news-releases/2016/nr-occ2016-106.html. 55 OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South Dakota, AA-EC2016-66 at Article IV (Sept. 6, 2016), available at https://www.occ.gov/news-issuances/newsreleases/2016/nr-occ-2016-106b.pdf. 56 Id. at Articles V & VI. 

57 Id. at Article VII. 

58 Id. at Article III. 59 Id. at Article III(4). 

60 Id. at Article XI(1).

61 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A., 2016-CFPB-0015 (Sept. 8, 2016), 

at § 46 available at

https://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf. 62 OCC Consent Order, In the Matter of Wells Fargo Bank, N.A., 2016-CFPB-0015 at ¶45 (Sept. 8, 

2016), available at https://files.consumerfinance.gov/f/documents/092016_cfpb_WFBconsentorder.pdf; 

Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South Dakota, AA-EC-2016-66
18

2. 2018 Federal Reserve Consent Order.

On February 2, 2018, the Federal Reserve announced that it had brought an 

enforcement action against Wells Fargo to address the board’s corporate risk oversight 

failures, which facilitated “widespread consumer abuses and compliance breakdowns” at 

WFC.63 As part of the action, the Federal Reserve entered into a consent order (“2018 Federal 

Reserve Consent Order”) with WFC’s board, which required each of WFC’s directors at the 

time to sign. The 2018 Federal Reserve Consent Order requires the WFC board of directors 

to: 

• submit a written plan, subject to Federal Reserve approval, to further enhance

the board’s effectiveness in carrying out its oversight and governance of WFC

(paragraph 2); and

• submit a written plan, subject to Federal Reserve approval, to further improve

its firmwide compliance and operational risk management program

(paragraph 3).64

Once Wells Fargo adopts and implements Federal Reserve-approved plans, the 

Company must subject its improvements to an independent third-party review.

The 2018 Federal Reserve’s Consent Order also restricts Wells Fargo from growing 

larger than its total asset size as of the end of 2017. The asset cap will remain in place until 

Wells Fargo:

• submits the plans required under paragraphs 2 and 3;

• is notified in writing of the Federal Reserve’s acceptance of its plans;

• adopts and implements the Federal Reserve-approved plans;

• completes the independent third-party review to the satisfaction of the Federal

Reserve; and,

• is notified in writing by the Federal Reserve that the above conditions are

met.65

at Article III(1) (Sept. 6, 2016), available at https://www.occ.gov/news-issuances/newsreleases/2016/nr-occ-2016-106b.pdf. 63 Federal Reserve, Responding to widespread consumer abuses and compliance breakdowns by Wells 

Fargo, Federal Reserve restricts Wells’ growth until firm improves governance and controls. 

Concurrent with Fed action, Wells to replace three directors by April, one by year end (Feb. 2, 2018), 

available at https://www.federalreserve.gov/newsevents/pressreleases/enforcement20180202a.htm. 64 Federal Reserve, In the Matter of Wells Fargo & Company, Order to Cease and Desist Issued Upon 

Consent Pursuant to the Federal Deposit Insurance Act, as Amended (Sept. 29, 2016), available at

https://www.federalreserve.gov/newsevents/pressreleases/files/enf20180202a1.pdf. 65 Id.
19

The first plan was due under the 2018 Federal Reserve Consent Order on April 3, 

2018. To date, Wells Fargo has failed to submit an acceptable plan to the Federal Reserve. 

The 2018 Federal Reserve Consent Order reflects the regulator’s dissatisfaction with 

the board’s oversight failures and inability to compel senior management to improve to the 

firm’s risk management infrastructure over the five years since the Federal Reserve first 

identified weaknesses. In connection with the 2018 Federal Reserve Consent Order, the 

Federal Reserve also sent a letter on February 2, 2018, to Wells Fargo’s board of directors 

emphasizing that the board’s oversight failures and inability to compel senior management 

to improve to the firm’s risk management infrastructure contributed to consumer harm.66

According to the letter, “[t]he firm’s lack of effective oversight and control of compliance and 

operational risks contributed in material ways to the substantial harm suffered by 

WFC’s customers” (emphasis added).67 

3. 2018 Compliance Risk Management Consent Orders.

On April 20, 2018, the CFPB and OCC announced coordinated consent orders (2018 

Compliance Risk Management Consent Orders) with Wells Fargo Bank for consumer abuses 

in two of the Bank’s loan-related programs.68 The CFPB and OCC found that from September 

2013 through February 2017, Wells Fargo Bank inappropriately charged prospective 

mortgage loan borrowers fees for extending the period for a mortgage interest-rate lock.69

According to the CFPB and OCC, the Bank’s loan officers inconsistently applied its extension 

fee policy and improperly charged borrowers fees, including when the Bank’s own delay 

created the need for an extension.70 

The CFPB and OCC also found that between October 2005 and September 2016, Wells 

Fargo Bank purchased unnecessary or duplicative collateral-protection insurance (called 

“force-placed insurance”) for hundreds of thousands of borrowers’ vehicles and financed the 

coverage by adding the costs to borrowers’ auto-loan balance.71 On average, these borrowers 

66 Letter from M. Gibson, Director, Division of Supervision and Regulation, FRB, to Board of

Directors, WFC (Feb. 2, 2018), available at

https://www.federalreserve.gov/newsevents/pressreleases/files/enf20180202a2.pdf. 

67 Id. 

68 See CFPB, Bureau of Consumer Financial Protection Announces Settlement with Wells Fargo For

Auto-Loan Administration and Mortgage Practices (Apr. 20, 2018), available at

https://www.consumerfinance.gov/about-us/newsroom/bureau-consumer-financial-protectionannounces-settlement-wells-fargo-auto-loan-administration-and-mortgage-practices/; OCC, OCC 

Assesses $500 Million Penalty Against Wells Fargo, Orders Restitution for Unsafe or Unsound

Practices (Apr. 20, 2018), available at https://www.occ.gov/news-issuances/news-releases/2018/nrocc-2018-41.html. 

69 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A. at ¶¶7-21 (Apr. 20, 2018), available

at https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bank-na_consent-order_2018-

04.pdf; OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South Dakota, AAEC-2018-15) at Article I(7)-(8) (Apr. 20, 2018), available at https://www.occ.gov/static/enforcementactions/ea2018-025.pdf.

70 Id.

71 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A. at ¶¶27-35 (Apr. 20, 2018),

available at https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bank-na_consent-
20

paid over $1,000 per policy for needless 

insurance coverage.72 Borrowers who failed 

to pay the force-placed insurance charges 

faced additional fees and, in some instances, 

experienced delinquency, loan default, and 

even repossession of their vehicles.73 Wells 

Fargo Bank acknowledged that at least 

27,000 of its customers may have had their 

vehicle repossessed following defaults 

arising from the additional costs of forceplaced insurance.74 

In response to these consumer abuses, the CFPB assessed a record $1 billion penalty 

against the Bank.75 The OCC found that Wells Fargo Bank’s violations resulted from 

“deficiencies in the bank’s enterprise-wide compliance risk management program 

that constituted reckless, unsafe, or unsound practices” (emphasis added).76 The 

OCC’s order incorporated several prior non-public regulatory actions issued against the Bank 

for its compliance weaknesses.77 The OCC imposed a $500 million fine, which the CFPB 

credited toward its $1 billion penalty.78 

The 2018 Compliance Risk Management Consent Orders required the Bank to submit 

a plan to remediate consumers harmed by its defective interest-rate lock policy and collateral 

protection insurance processes.79 The 2018 Compliance Risk Management Consent Orders 

also required the Bank to: (1) develop a comprehensive plan for identifying and remediating 

future consumer harm; and (2) authorized the OCC and the CFPB to require the Bank to 

submit a remediation plan for the regulators’ approval when a consumer abuse occurs where: 

(i) more than 50,000 consumers or customer accounts are likely to require remediation; (ii)

the anticipated amount of remediation exceeds $10 million; or (iii) the consumer harm

order_2018-04.pdf; OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South 

Dakota, AA-EC-2018-15 at Article I(4)-(5) (Apr. 20, 2018), available at 

https://www.occ.gov/static/enforcement-actions/ea2018-025.pdf.

72 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A. at ¶34 (Apr. 20, 2018),available at 

https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bank-na_consent-order_2018-04.pdf.

73 Id. at ¶29.

74 Id. at ¶35.

75 Id. at ¶59.

76 OCC, OCC Assesses $500 Million Penalty Against Wells Fargo, Orders Restitution for Unsafe or 

Unsound Practices (Apr. 20, 2018),), available at https://www.occ.gov/news-issuances/newsreleases/2018/nr-occ-2018-41.html. 77 OCC Memorandum, OCC-HFSC-WF_2019_00001023-55 (Mar. 9, 2018) (on file with the House 

Financial Services Committee).

78 Id.

79 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A., 2018-BCFP-0001 at ¶¶55-56 (Apr. 

20, 2018), available at https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bankna_consent-order_2018-04.pdf; OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux 

Falls, South Dakota, AA-EC-2018-15 at Article VIII(6) (Apr. 20, 2018), available at 

https://www.occ.gov/static/enforcement-actions/ea2018-025.pdf. 

IN RESPONSE TO THESE 

CONSUMER ABUSES, THE 

CFPB ASSESSED A RECORD 

$1 BILLION PENALTY 

AGAINST THE BANK.
21

remediated by the Bank presents or had led to significant reputational risk or raises other 

supervisory concerns. 

To address the Bank’s longstanding company-wide compliance failures, the 2018 

Compliance Risk Management Consent Orders mandated that the Bank develop, for the 

OCC’s and CFPB’s approval, a company-wide compliance risk management program 

(CRMP), a plan for staffing the CRMP, and a plan for enhancing the Bank’s internal audit 

program.80 The OCC’s consent order also required the Bank to submit for approval an action 

plan for satisfying the order’s requirements.81 Under the terms of the OCC’s order, the Bank 

has to obtain written approval before appointing senior executives and board members.82

Similar to the 2016 Sales Practices Consent Orders, the 2018 Compliance Risk Management

Consent Orders place ultimate responsibility for compliance with the Bank’s board.83

B. Key Wells Fargo Board Members & Senior Executives

Elizabeth “Betsy” Duke—Ms. Duke is the current Chair of Wells Fargo’s Board of 

Directors. She has served in the position since January 2018. Previously, she served as Vice

Chair of Wells Fargo’s Board of Directors from October 2016 to December 2017. Ms. Duke 

first joined Wells Fargo’s board in January 2015.84 As Chair of Wells Fargo’s board, Ms. Duke 

was responsible for, among other things, approving board meeting materials; presiding over 

board meetings; serving as a liaison among Wells Fargo’s independent directors, between 

Wells Fargo’s CEO and board members, and between the CEO and other senior executives; 

and serving as a point of contact for the Company’s regulators.85 Wells Fargo paid Ms. Duke 

$631,004 in total compensation (cash and stock) for her 2018 service on Wells Fargo’s board.86

Prior to joining Wells Fargo’s board, Ms. Duke served as a board member of the Board of 

80 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A., 2018-BCFP-0001 at ¶¶42-45 (Apr.

20, 2018), available at https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bankna_consent-order_2018-04.pdf; OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux

Falls, South Dakota, AA-EC-2018-15 at Articles IV-VI (Apr. 20, 2018), available at

https://www.occ.gov/static/enforcement-actions/ea2018-025.pdf. 

81 OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South Dakota, AA-EC2018-15 at Article III (Apr. 20, 2018), available at https://www.occ.gov/static/enforcementactions/ea2018-025.pdf.

82 Id. at Article X.

83 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A., 2018-BCFP-0001(Apr. 20, 2018),

available at https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bank-na_consentorder_2018-04.pdf; OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South

Dakota, AA-EC-2018-15 (Apr. 20, 2018), available at https://www.occ.gov/static/enforcementactions/ea2018-025.pdf. 

84 WFC, Wells Fargo 2019 Proxy Statement at 31, available at

https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/annual-reports/2019-proxystatement.pdf. 

85 WFC, Wells Fargo & Company Corporate Governance Guidelines, available at

https://www08.wellsfargomedia.com/assets/pdf/about/corporate/governance-guidelines.pdf.

86 WFC, Wells Fargo 2019 Proxy Statement at 52.
22

Governors of the Federal Reserve System from August 2008 to August 2013 and was Chair 

of the Federal Reserve’s Committee on Consumer and Community Affairs.87

James H. Quigley—Mr. Quigley currently serves as a director of Wells Fargo and Chairman 

of Wells Fargo Bank.88 He has served on Wells Fargo’s board since October 2013.89 Wells 

Fargo paid Mr. Quigley $417,004 in total compensation for his 2018 service on Wells Fargo’s 

boards.90In addition to serving as Chairman of Wells Fargo Bank, Mr. Quigley is also 

Chairman of the board of directors of Hess Corporation and a member of the board of directors 

of Merrimack Pharmaceuticals, Inc.91 

Karen Peetz—Ms. Peetz served as director of Wells Fargo and Wells Fargo Bank from 

February 2017 through May 2019. From September 201792 through May 2019, she served as 

Chair of the Risk Committee of Wells Fargo’s Board of Directors. As Risk Committee Chair, 

Ms. Peetz was primarily responsible for overseeing Wells Fargo’s enterprise-wide risk 

management program, including approving reforms required by regulators and monitoring 

the program’s effectiveness.93 Ms. Peetz was also responsible for overseeing Wells Fargo’s 

Chief Risk Officer.94 For Ms. Peetz’ service on Wells Fargo’s boards in 2018, Wells Fargo paid 

her $395,754 in total compensation.95 

Timothy “Tim” Sloan—Mr. Sloan served as the CEO and a director of Wells Fargo from 

October 2016 through March 2019 and as Wells Fargo’s President from November 2015 

through March 2019. He formerly served as Wells Fargo’s Chief Operating Officer from 

November 2015 to October 2016, Senior Executive Vice President (Wholesale Banking) from 

May 2014 to November 2015, and Senior Executive Vice President and Chief Financial 

Officer from February 2011 to May 2014.96 According to Wells Fargo’s by-laws, the CEO, 

“subject to the direction and control of the Board,” must “supervise and control the business 

and affairs of the Company and shall see that all orders and resolutions of the Board are 

carried into effect.”97 For his performance in 2018, Wells Fargo’s board awarded Mr. Sloan 

87 WFC, Elizabeth A. Duke, available at 

https://www.wellsfargo.com/about/corporate/governance/duke/ 88 WFC, Wells Fargo 2019 Proxy Statement at 19 and 34.

89 Id at 34.

90 Id. at 52. 91 Id. at 34.

92 WFC, Wells Fargo Announces Board Changes (Aug. 15, 2017), available at 

https://newsroom.wf.com/press-release/corporate-and-financial/wells-fargo-announces-board-changes. 93 WFC, Wells Fargo & Company 2018 Annual Meeting of Shareholders Proxy Statement at 39, 

available at https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/annualreports/2018-proxy-statement.pdf. 94 Id. 

95 WFC, Wells Fargo 2019 Proxy Statement at 19 and 34, available at 

https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/annual-reports/2019-

proxy-statement.pdf. 96 WFC, Wells Fargo 2019 Proxy Statement at 35, available at

https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/annual-reports/2019-proxystatement.pdf. 97 WFC, By-laws of Wells Fargo & Company (Mar. 1, 2018), available at

https://www08.wellsfargomedia.com/assets/pdf/about/corporate/governance-by-laws.pdf.
23

$18,400,000, including a $2,000,000 bonus. On March 26, 2019, Mr. Sloan resigned from the 

Company98 amid pressure from regulators and intense scrutiny from Congress, including 

Chairwoman Waters, over his failure as CEO to address Wells Fargo’s systemic misconduct 

and compliance weaknesses. 

C. Allen Parker—Mr. Parker joined Wells Fargo in March 2017 as General Counsel. He

served in that position until March 26, 2019, when, following Mr. Sloan’s resignation

announcement, Wells Fargo’s board elected Mr. Parker to serve as interim-CEO and

President, and as a director of the Company.99 Mr. Parker returned to his role as General

Counsel on October 21, 2019, when Wells Fargo appointed Charles Scharf as its CEO and

President.100

Michael “Mike” Loughlin—Mr. Loughlin served as Wells Fargo’s Chief Risk Officer from 

2010 through his retirement in May 2018. Wells Fargo’s Chief Risk Officer reports to the 

Chair of the Risk Committee of Wells Fargo’s Board and “is responsible for setting the 

strategic direction and driving the execution of Wells Fargo’s risk management activities.”101

Before retiring, Mr. Loughlin held various roles at Wells Fargo over 36 years, including as a 

member of the Bank’s board from November 2006 through December 2014.102 In January 

2020, the OCC fined Loughlin $1.25 million for breaching his fiduciary duty to the Bank and 

engaging in misconduct that fostered illegal sales practices and allowed it to continue for 

years.103 

IV. Committee Staff Findings

A. Before the 2016 and 2018 Consent Orders, Financial Regulators Knew

About Serious Enterprise-Wide Deficiencies at Wells Fargo for Years

Without Alerting the Public

1. From 2009 through 2016, the OCC failed to take serious action to

address Bank sales practices that the OCC knew posed danger to consumers.

The OCC not only stood by as Wells Fargo Bank repeatedly ignored its directives to 

address its compliance deficiencies, but the agency also failed to act on significant warning 

signs of potential sales practice abuses at the Bank. The OCC was aware of the Bank’s weak 

compliance controls as far back as 2009. That year, the OCC directed the Bank to develop a 

98 SEC, Form 8-K for Wells Fargo & Company (Mar. 26, 2019), available at 

https://www.sec.gov/Archives/edgar/data/72971/000119312519090633/d727180d8k.htm. 99 SEC, Form 8-K for Wells Fargo & Company (Mar. 26, 2019), available at

https://www.sec.gov/Archives/edgar/data/72971/000119312519090633/d727180d8k.htm. 100 SEC, Form 8-K for Wells Fargo & Company (Sept. 26, 2019), available at

https://www.sec.gov/ix?doc=/Archives/edgar/data/72971/000119312519256649/d813177d8k.htm. 101 WFC, Wells Fargo 2019 Proxy Statement at 42.

102 Id. 103 Id.
24

company-wide system for monitoring consumer and employee complaints.104 Wells Fargo 

Bank failed to fully address its deficient complaint monitoring for over seven years, and the 

OCC took no formal action against the Bank until it incorporated the 2009 directive into the 

2016 Consent Order.105 To the contrary, the OCC in its April 2015 supervisory letter 

concluded that the Community Bank’s oversight of complaints was satisfactory.106 In June 

2015, the OCC did issue a supervisory letter with five MRAs, including an MRA on 

complaints.107

An April 19, 2017 report issued by the OCC’s Office of Enterprise Governance and the 

Ombudsman reviewing the OCC’s supervision of the Bank’s sales practices concluded that, 

“[t]he OCC did not take timely and 

effective supervisory actions.”108 As 

early as 2010, the OCC identified 

concerns with the Bank’s aggressive 

sales practices (including the Bank’s 

“Going for Gr-Eight” initiative to 

double the average number of 

products per customer to eight) and 

lack of controls. However, the OCC 

failed to conduct comprehensive 

reviews and testing of monitoring 

systems and controls over sales 

practices between 2011 and 2014.109

While the OCC planned to examine 

the Bank’s incentive compensation 

structure in 2013, the agency 

ultimately performed only a “highlevel” review, that included a 

PowerPoint presentation from the 

Bank.110 

In 2010, the OCC discussed with senior bank management the approximately 700 

employee complaints regarding the “gaming” of the Bank’s incentive compensation 

104 OCC Office of Enterprise Governance and the Ombudsman, Lessons learned Review of 

Supervision of Sales Practices at Wells Fargo at 4 (Apr. 19, 2017), available at 

https://www.occ.gov/publications-and-resources/publications/banker-education/files/lessons-learnedreview-of-sup-of-sales-practices-at-wells-fargo.html. 105 Id. at 4.

106 Id. at 6. 

107 Id. at 11.

108 Id. at 4.

109 Id. at 7. 

110 OCC Office of Enterprise Governance and the Ombudsman, Lessons learned Review of 

Supervision of Sales Practices at Wells Fargo at 8 (Apr. 19, 2017), available at 

https://www.occ.gov/publications-and-resources/publications/banker-education/files/lessons-learnedreview-of-sup-of-sales-practices-at-wells-fargo.html. 

IN 2010, THE OCC DISCUSSED WITH 

SENIOR BANK MANAGEMENT THE 

APPROXIMATELY 700 EMPLOYEE 

COMPLAINTS REGARDING THE 

“GAMING” OF THE BANK’S 

INCENTIVE COMPENSATION 

COMPLAINTS BUT DID NOT 

REQUIRE THE BANK TO CONDUCT 

ANY FURTHER INVESTIGATION.
25

complaints but did not require the Bank to conduct any further investigation.111 The 

ombudsman also found that OCC examiners failed to adhere to internal OCC policy regarding

informing the Bank’s board of the directives issued to the Bank to improve compliance 

procedures meant to prevent consumer abuses.112 An OCC examination of the Community 

Banking Operational Risk Management began in early 2015 covering management of first 

line of defense operational risk and cross sell activities. Subsequently, the OCC initiated a 

review of the Bank’s enterprise sales practices in May 2015 after the City of Los Angeles filed 

a lawsuit alleging illegal sales practices.113 More than a year before the OCC issued a public 

enforcement action, the OCC issued a supervisory letter concluding that “Wells Fargo’s 

management and oversight of Enterprise Sales Practices risk is weak and needs to 

improve.”114

2. From 2013 through 2017, the Federal Reserve wrote non-public 

supervisory letters to Wells Fargo in an unsuccessful effort to compel the 

Company to fix its pervasive risk management deficiencies. 

In its December 31, 2012 inspection report for Wells Fargo, the Federal Reserve

identified foundational weaknesses in Wells Fargo’s compliance risk management. In light 

of the Federal Reserve’s findings, Wells Fargo and the Federal Reserve entered into a 

Memorandum of Understanding (“MOU”) on November 5, 2013 to ensure the firm (1) took 

steps to maintain risk management practices that meet regulatory expectations and are 

suitable for Wells Fargo’s size and complexity; and (2) timely resolved various internal control 

deficiencies identified by Federal Reserve staff over multiple years.115 The MOU required 

Wells Fargo to remediate identified deficiencies in nine areas, including risk management 

(Paragraph 2 of the MOU); compliance (Paragraph 4 of the MOU); and corporate governance 

(Paragraph 9 of the MOU). With respect to the foundational issue of risk management, the 

MOU gave Wells Fargo’s board 60 days to submit a written plan acceptable to the Federal 

Reserve to strengthen Wells Fargo’s corporate risk management function.116

From November 2013 through 2017, when several unremedied provisions of the MOU 

were replaced by a superseding supervisory letter, Federal Reserve staff continued to observe 

deficiencies in Wells Fargo’s ability to develop effective risk management structures that 

were appropriate for a financial institution of its size and complexity. For example, on March 

20, 2014, the Federal Reserve rejected Wells Fargo’s initial submission of a corporate risk 

management plan, citing “fundamental weaknesses” in parts of the plan.117 Among the 

111 Id. at 5. 112 Id. at 10-11. 

113 OCC Supervisory Letter WFC 2015-36, OCC-HFSC-WF_2019_00002218-26 at 2218 (Jun. 26, 

2015) (on file with the House Financial Services Committee). 114 OCC Supervisory Letter WFC 2015-36, OCC-HFSC-WF_2019_00002218–26 at 2219 (Jun. 26, 

2015) (on file with the House Financial Services Committee).

115 Memorandum of Understand between WFC and Federal Reserve (Nov. 5, 2013), FRB_HFSC00018578-83 (on file with the House Financial Services Committee).

116 Id.

117 Letter from Federal Reserve to J. Stumpf, Chairman and Chief Executive Officer, WFC,

FRB_HFSC-00018689 (Mar. 20, 2014) (on file with the House Financial Services Committee).
26

corporate risk management plan’s weaknesses, Federal Reserve staff noted the firm’s failure 

to acknowledge certain barriers to ensuring that the firm’s 275,000 Wells Fargo employees 

worldwide operated within the Company’s risk tolerances.118 

The Federal Reserve finally approved Wells Fargo’s corporate risk management plan 

in December 2014, nearly a year after Wells Fargo was required under the MOU to submit 

an acceptable plan.119 The MOU continued to remain in effect over three years, during which 

the Federal Reserve supervised Wells Fargo’s efforts toward implementing its risk 

management plan. While Federal Reserve staff acknowledged progress in some areas, Wells 

Fargo continued to exhibit serious deficiencies in its ability to manage risk and comply with 

financial regulations. In December 2015, a full year after approving Wells Fargo’s risk 

management plan, Federal Reserve staff expressed dissatisfaction with Wells Fargo’s 

continued deficiencies in key areas.120 Additionally, Federal Reserve staff communicated to 

Wells Fargo concerns about continued deficiencies and compliance failures resulting from 

Wells Fargo’s lack of controls:

[T]he [Federal Reserve] remains concerned about selected areas within the

firm's risk management organizations, most notably compliance, [REDACTED

by Federal Reserve], and financial crimes risk management. Each of these three

areas has developed a framework for managing risk, and documented the risk

management practices, yet has continued to experience highly visible

breakdowns, leading to further supervisory actions from various regulators in

the form of Consent Orders and Matters Requiring Attention (MRA). These

continued shortcomings raise concerns regarding the stature and Board and

senior management support of the independent risk functions covering these Key

Risk Types. In particular, while the firm has continued to build-out its

framework for managing compliance risk, continued weaknesses (i.e.

sales practices, improperly denied Federal Housing Association (FHA)

modifications, and the recent Consumer Financial Protection Bureau

(CFPB) mortgage origination letter) evidence flaws that point to

deeper culture and organizational structure issues that further

documentation cannot solve (emphasis added).121

On October 14, 2016, the Federal Reserve issued a report of inspection covering its 

supervision of Wells Fargo. The report, which the Federal Reserve shared in a letter 

addressed to Wells Fargo’s board of directors, covered supervisory activities from January 1, 

118 Id. at FRB_HFSC-00018693. 119 Letter from Federal Reserve to J. Stumpf, Chairman and Chief Executive Officer, WFC, 

FRB_HFSC-00019213 (Dec. 18, 2014) (on file with the House Financial Services Committee).

120 Letter from Federal Reserve to J. Stumpf, Chairman and Chief Executive Officer, WFC, 

FRB_HFSC-00019813 (Dec. 15, 2015) (on file with the House Financial Services Committee). 121 Id.
27

2015 to March 31, 2016.122 In the report, the Federal Reserve downgraded several 

components of Wells Fargo’s risk management functions.123 

The Federal Reserve made an assessment for each of five risk types: Credit Risk; 

Market Risk – Trading; Market Risk – Banking Book Interest Rate Risk; Operational Risk; 

and Legal & Compliance Risk.124 The Federal Reserve noted that significant issues in 

compliance and operational risk management persisted, leading the Federal Reserve to 

downgrade its assessment of these functions.125 

According to the report, the Federal Reserve downgraded its assessment of Wells 

Fargo’s Operational Risk management because, “[t]he firm’s risk management practices 

generally fail to identify, monitor and control operational risk exposures across broad areas

[of its operations].”126 With 

respect to Wells Fargo’s Legal 

& Compliance Risk, the 

Federal Reserve wrote, “[t]he 

primary reason for the 

downgrade is the inability of 

the board to oversee, and 

senior management to 

implement, the changes 

necessary to bring compliance 

risk management to an 

acceptable level over the past 

six years.”127 The Federal 

Reserve noted the similarities 

between the root causes of the 

2016 sales fraud scandal at 

Wells Fargo Bank, and other 

sales practices issues 

identified in a 2011 Federal 

122 WFC, Federal Reserve System's Annual Summary of Supervisory Activities: Wells Fargo & 

Company, WF-HFSC-000120244-49 (Oct. 25, 2016) (on file with the House Committee on Financial 

Services).

123 Letter from Federal Reserve to Board of Directors, WFC, WF-HFSC-000121028-46 (Oct. 14, 2016) 

(on file with House Financial Services Committee).

124 Id.

125 Id.

126 Id.

127 Id.

[T]HE PRIMARY REASON FOR THE

DOWNGRADE IS THE INABILITY OF THE 

BOARD TO OVERSEE, AND SENIOR 

MANAGEMENT TO IMPLEMENT, THE 

CHANGES NECESSARY TO BRING 

COMPLIANCE RISK MANAGEMENT TO 

AN ACCEPTABLE LEVEL OVER THE 

PAST SIX YEARS. 

- FEDERAL RESERVE
28

Reserve enforcement action128 against Wells Fargo Financial, a former non-bank subsidiary 

of WFC: 

The root causes of the sales practice issue (poorly administered 

incentive compensation structures that produce high sales pressure 

and contribute to inappropriate employee behavior) are extremely 

similar to the root causes of issues that the [Federal Reserve] identified 

almost 10 years ago in Wells Fargo Financial, Inc., which led to the July 

2011 consent order (i.e., poorly administered incentive compensation structures 

that led employees to steer customers into subprime loans and falsify income in 

order to support unaffordable loans). The fact that a different business line 

experienced significant compliance and conduct breakdowns due to 

substantially similar root causes five years later is highly concerning (emphasis 

added).129 

The Federal Reserve explicitly admonished Wells Fargo’s board and management for 

failing to fix compliance risk management deficiencies with similar root causes to those 

deficiencies identified in the 2011 consent order, writing: 

The [Federal Reserve] considers the board and senior management’s failure to 

address the sales practice issues over a prolonged period of time (resulting in 

significant damage to WFC’s reputation, public enforcement actions, fines, and 

additional litigation exposure), as a significant compliance breakdown 

and a prime example of the impact that uncontrolled risk can have 

when compliance issues are not comprehensively dealt with in a timely 

fashion (emphasis added).130

The Federal Reserve also downgraded Board and Senior Management Oversight, one 

of the four subcomponents of the Federal Reserve’s risk management component rating at 

128 Federal Reserve, Federal Reserve issues a consent cease and desist order and assesses civil money 

penalty against Wells Fargo (July 20, 2011), available at 

https://www.federalreserve.gov/newsevents/pressreleases/enforcement20110720a.htm. 129 Letter from Federal Reserve to Board of Directors, WFC, WF-HFSC-000121028-46 at 30 (Oct. 14, 

2016) (on file with the House Financial Services Committee). The letter reflects the Federal 

Reserve’s assessment of Wells Fargo under the Federal Reserve’s RFI rating system, which examines 

a bank holding company’s risk management (R), financial condition (F), and the impact of 

nonbanking activities (I). The risk management component is based on grades in four 

subcomponents: Board and Senior Management Oversight; Policies, Procedures, and Limits; Risk 

Monitoring and Management Information Systems; and Internal Controls. The bank holding 

company’s overall composite score is not a simple average of the component scores, but rather “it 

reflects examiner judgment with respect to the relative importance of each component to the safe 

and sound operation of the BHC.” See Federal Reserve, Bank Holding Company Rating System 

(2004), available at https://www.federalreserve.gov/boarddocs/srletters/2004/SR0418a1.pdf. However, 

Wells Fargo is now subject to a new rating system for large financial institutions (“LFI rating 

system”). See Federal Reserve, Federal Reserve Board finalizes new supervisory rating system for 

large financial institutions (Nov. 2, 2018), available at

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20181102a.htm.

130 Id.
29

that time. According to the Federal Reserve’s inspection report, the downgrade was due to 

multiple years of, “repeated material breakdowns in compliance risk management 

that have plagued the firm for numerous supervisory cycles” (emphasis added).131

Despite these downgrades, the Federal Reserve did not downgrade Wells Fargo’s risk 

management component rating or overall composite rating because it did not find similar 

deficiencies in the Company’s management of financial risk, such as credit and market 

risk.132 

Over the next year, Wells Fargo’s management and board of directors again failed to 

establish an effective corporate risk management infrastructure. This lack of progress led the 

Federal Reserve on October 3, 2017, to issue a targeted, “matter requiring attention” letter 

(“2017 Risk MRA”).133 The 2017 Risk MRA superseded a July 15, 2013 MRA supervisory 

letter underlying the corporate risk management provisions of the MOU. The letter included 

Federal Reserve’s finding that, despite years of development, “WFC’s Corporate Risk 

continues to lack a cohesive, integrated approach to managing enterprise-wide risks in a 

manner commensurate with 

the firm’s evolving size and 

complexity.”134 The Federal 

Reserve particularly criticized 

Wells Fargo’s board for not 

providing effective oversight of 

the firm’s corporate risk 

function and failing to ensure 

senior management developed 

and implemented an effective 

risk management program.135

According to the letter, Wells 

Fargo’s persistent risk 

management deficiencies over 

the years since the 2013 MOU, 

“reflect the board’s failure to 

direct and oversee senior 

management in addressing 

corporate risk issues with 

sufficient urgency.”136 

Similar to the 2013 MOU, the 2017 Risk MRA requires Wells Fargo to submit a plan 

to enhance its independent risk function and enterprise-wide risk management program 

131 Id.

132 Id.

133 Letter from Federal Reserve to M. Loughlin, WFC, FRB_HFSC-00031515-20 (Oct. 3, 2017) (on file 

with the House Financial Services Committee). 

134 Id.

135 Id. at FRB_HFSC-00031517. 136 Id. at FRB_HFSC-00031518. 

ACCORDING TO A FEDERAL RESERVE 

LETTER WELLS FARGO’S PERSISTENT 

RISK MANAGEMENT DEFICIENCIES 

OVER THE YEARS SINCE THE 2013 MOU, 

“REFLECT THE BOARD’S FAILURE TO 

DIRECT AND OVERSEE SENIOR 

MANAGEMENT IN ADDRESSING 

CORPORATE RISK ISSUES WITH 

SUFFICIENT URGENCY.”
30

within 60 days of the letter. To date, nearly two and a half years later, the firm has not 

submitted a plan that meets regulatory expectations under the 2017 Risk MRA. 

The Committee staff finds that the Federal Reserve was ineffective in its supervisory 

efforts between its December 2012 identification of foundational risk management issues at 

Wells Fargo, and its February 2, 2018 enforcement action. The Federal Reserve’s reliance on 

non-public, low severity, supervisory letters allowed Wells Fargo’s risk management systems 

to languish for five years, during which time consumers were exposed to unchecked 

opportunities for abuse. 

3. For years prior to its 2018 Compliance Risk Management Consent

Order, the OCC took ineffective, non-public actions in a failed attempt to

require Wells Fargo to correct its weak controls over UDAP risks.

Other regulators also uncovered compliance weaknesses long before the issuance of 

the 2018 Compliance Risk Management Consent Orders. In November 2011, the OCC 

examined for the first time the Bank’s unfair, deceptive, acts or practices (“UDAP”) 

compliance risk management practices to gain an understanding of the Bank’s UDAP risk 

profile and controls to mitigate the Bank’s UDAP risks.137 In a January 16, 2014 supervisory 

letter to the Bank’s chief compliance officer, the OCC communicated that the Bank had an 

elevated UDAP risk and that its “UDAP compliance risk management program has not 

proven effective at identifying and mitigating risk.”138 As a result, the OCC directed Bank

management to establish a company-wide UDAP compliance program.139 More than four 

years later, the Bank had still not complied with this directive, which was one of the reasons 

the OCC took additional supervisory actions.140

In July 2015, the OCC issued a non-public enforcement action requiring the Bank to 

submit a plan to address, “weaknesses in the Bank’s compliance risk management 

program.”141 A December 22, 2016 supervisory letter summarizing the OCC’s examination of 

management’s progress on implementing an effective compliance program reported that: 

“Management has not yet established an effective and sustainable enterprise-wide 

compliance program. The bank’s overall compliance position is weak and 

continues to require close supervisory attention” (emphasis added).142 Just as the 

Federal Reserve determined the Bank had failed to correct compliance deficiencies identified 

in prior regulatory actions, in a supervisory letter dated April 11, 2017, the OCC concluded 

that the Bank had “not made adequate progress” in effectively implementing its plan to 

137 OCC Supervisory Letter, WFC 2011-63, OCC-HFSC-WF_2019_00000859-63 (Jan.16, 2014) (on 

file with the House Financial Services Committee). 

138 Id. 139 Id. 140 OCC Memorandum, OCC-HFSC-WF_2019_00001023-55 (Mar. 9, 2018) (on file with the House 

Financial Services Committee). 

141 Id. 142 OCC Supervisory Letter WFC 2016-43, OCC-HFSC-WF_2019_00000871-77 at 71 (Dec. 22, 2016) 

(on file with the House Financial Services Committee). 
31

address the weakness identified in the 2015 non-public order.143 In an internal memo dated

March 9, 2018, the OCC noted that the retention of an outside consultant to assist the Bank 

was a “tacit acknowledgment that the Bank did not have the leadership or staff capable of 

developing an effective Plan 

in-house.”144 More than three 

years after the issuance of the 

non-public order, the OCC 

again determined that 

“critical deficiencies remain 

in the Bank’s compliance risk 

management program.”145

Consistent with the OCC’s 

findings, the CFPB since it 

began examining Wells Fargo 

in 2011 uncovered multiple 

consumer violations in the 

Bank’s product lines 

resulting from poor board and 

management oversight and 

an overall lack of a 

compliance infrastructure 

across the Bank.146 Thus, the 

OCC identified serious 

compliance management 

weaknesses at Wells Fargo and took ineffective non-public action for four years before 

bringing a public enforcement action in 2018. 

The Committee staff finds that the OCC’s repeated use of confidential supervisory 

letters to correct deficiencies with Wells Fargo, even after the letters proved ineffective, 

allowed the Bank to operate for years in an unsafe and unsound manner and left consumer’s 

unaware of the heightened risk of harm they faced when dealing with Wells Fargo. 

B. After the Bank’s Consumer Abuses Became Public and the Regulators

Issued Consent Orders, Wells Fargo’s Board Failed to Ensure Management

Could Competently Address the Company’s Risk Management Deficiencies

1. The board failed to ensure the Bank had managers with sufficient

compliance expertise.

143 OCC Supervisory Letter WFC 2016-30, OCC-HFSC-WF_2019_00000878-84 at 78 (Apr. 11, 2017) 

(on file with the House Financial Services Committee). 

144 OCC Memorandum, OCC-HFSC-WF_2019_00001023-55 at 32 (Mar. 9, 2018) (on file with the 

House Financial Services Committee).

145 Id. at 32. 146 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020). 

THE COMMITTEE STAFF FINDS THAT 

THE OCC’S REPEATED USE OF 

CONFIDENTIAL SUPERVISORY LETTERS 

TO CORRECT DEFICIENCIES WITH 

WELLS FARGO, EVEN AFTER THE 

LETTERS PROVED INEFFECTIVE, 

ALLOWED THE BANK TO OPERATE FOR 

YEARS IN AN UNSAFE AND UNSOUND 

MANNER AND LEFT CONSUMER’S 

UNAWARE OF THE HEIGHTENED RISK 

OF HARM THEY FACED WHEN DEALING 

WITH WELLS FARGO.
32

The Committee staff’s investigation reveals that Wells Fargo often tasked individuals 

lacking the requisite knowledge and expertise with responsibility for managing the Bank’s 

compliance with key provisions of the 2016 Consent Orders. The 2016 OCC Sales Practice 

Consent Order required the Bank to establish a company-wide platform for handling 

consumer complaints.147 Wells Fargo, in January 2017, formed the Conduct Management 

Office (“CMO”), which was responsible for overseeing the handling of customer complaints 

across the Company.148 The Bank selected a senior manager in the Wealth and Investment 

Management (“WIM”) division with no apparent consumer compliance background to lead 

the CMO.149 Several individuals expressed concerns about the CMO leader’s qualifications to 

serve in that position. According to April 2018 Federal Reserve meeting minutes, Federal 

Reserve staff noted, “[c]onsidering [the CMO leader] was the Group Financial Officer 

for WIM, it’s still not clear why she was selected to lead [the CMO],” and a senior 

Wells Fargo compliance executive “signaled [the CMO leader] was not suited for that role but 

now the program is up and running and there was not much that could be done” (emphasis 

added).150 The former Chair of the board’s Risk Committee, Karen Peetz, revealed in an 

interview with Committee staff that the CMO leader was hardworking but ultimately 

unsuccessful in parts of her role.151 Similarly, the OCC staff communicated to the Committee 

that historically the Bank lacked individuals who understood how to manage company-wide 

compliance programs and that the CMO leader herself recognized that she wasn’t a good fit 

to lead the CMO and retired in 2019.152 

Wells Fargo’s selection of a CMO leader who lacked the requisite qualifications 

impeded the Bank’s ability to comply with the 2016 OCC Sales Practices Consent Order. The 

CMO struggled to establish the company-wide consumer complaints platform required by the 

2016 OCC Sales Practices Consent Order. On April 30, 2019, the Bank submitted a revised 

Comprehensive Action Plan for the Sales Practices Consent Order to address expectations 

concerning the complaints platform—the final key component of the Sales Practice Consent 

Order outstanding. The revised plan extended the date for fully implementing and validating 

the complaints platform until September 30, 2021.153 In response, the OCC wrote to Wells 

Fargo on May 21, 2019 that “this completion date is now five years beyond the 

execution of the [Sales Practice Consent Order] and any additional extension 

requests may potentially subject the bank to additional enforcement actions or 

147 OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux Falls, South Dakota, AA-EC2016-66 (Sept. 6, 2016) at Article V(e), available at https://www.occ.gov/news-issuances/newsreleases/2016/nr-occ-2016-106b.pdf. 

148 Message From Conduct Management Office Organization, WF-HFSC-000057257-90 at 60-61 

(May 30, 2018) (on file with the House Financial Services Committee.) 

149 Wells Fargo Stories, Sloan: ‘We are on the right path’ (Jan. 19, 2017), available at

https://stories.wf.com/sloan-right-path/.

150 Meeting Minutes, FRB_HFSC-00021597-601 at 600 (Apr. 2018) (on file with the House Financial 

Services Committee). 

151 Interview with Karen Peetz (Jan. 31, 2020).

152 Interview with OCC staff (Feb. 4, 2020).

153 Letter from Wells Fargo to OCC staff, WF-HFSC-000081708- 803 at 709 (Apr. 30, 2019) (on file

with the House Financial Services Committee).
33

penalties” (emphasis added).154 The OCC’s concerns about the delay echoed prior OCC 

reviews of the CMO. The OCC examined the CMO in April of 2018 and determined that “[a] 

significant amount of work still remains to make the CMO fully effective.”155 Specifically, the 

OCC referenced the timely development of a company-wide platform to track consumer 

complaints, a requirement under the OCC’s 2016 Consent Order.156 

2. Instead of building its compliance risk management system with inhouse employees, the Bank outsourced compliance to outside consultants.

In addition to placing unqualified individuals in key compliance positions, the 

Committee staff’s investigation reveals that Wells Fargo outsourced its efforts to comply with 

the 2016 Sales Practices 

Orders to consultants. 

The consulting firm

McKinsey & Company 

supported the formation 

of the Consent Order 

Program Office (COPO), 

created to coordinate the 

Bank’s response to the 

2016 Sales Practices 

Consent Orders.157

Additionally, in January 

2017 senior Bank 

executives had internal 

discussions about hiring 

Promontory Financial 

Group (Promontory) as a 

consultant to the CMO. 

The head of COPO communicated to Chief Risk Officer Michael Loughlin in a January 6, 

2017 email that, “I do think bringing in the external reputation and expertise from 

Promontory to guide is tremendous, because we are really figuring this out as we go” 

(emphasis added).158 Subsequently, on January 11, 2017, Loughlin touted the quick hiring of 

154 Letter from OCC to Wells Fargo, WF-HFSC-000032344-45 (May 21, 2019) (on file with the House 

Financial Services Committee).

155 OCC Supervisory Letter WFC 2018-39, OCC-HFSC-2019_00012044-51 (Aug. 14, 2018) (on file 

with the House Financial Services Committee). 

156 Id. 157 Email from Wells Fargo to CFPB Senior Examiner, HFSC_CFPB_041019_00016822-23 (Oct. 27, 

2016) (on file with the House Financial Services Committee).

158 See Appendix 1: Email from Wells Fargo, to Michael Loughlin, Chief Risk Officer, WFC, WFHFSC-000111941-42 (Jan. 6, 2017).

I DO THINK BRINGING IN THE EXTERNAL 

REPUTATION AND EXPERTISE FROM 

PROMONTORY TO GUIDE IS 

TREMENDOUS, BECAUSE WE ARE 

REALLY FIGURING THIS OUT AS WE GO.

- MICHAEL LOUGHLIN

WELLS FARGO CHIEF RISK OFFICER
34

Promontory to help establish the CMO.159 Promontory also drafted a compliance plan for the 

Bank in response to another OCC regulatory action.160

The Bank’s reliance on multiple outside consultants illustrated a lack of commitment 

to implementing the in-house compliance risk management programs required by its 

regulators. The Bank’s July 17, 2018 report of examination from the OCC noted that:

Management struggled throughout the supervisory cycle to develop an 

Action Plan for an enterprise-wide compliance risk management 

program and efforts to improve the compliance program largely stalled during 

this time. There were several failed efforts in 2017 to develop a Plan and 

ultimately management had to hire outside assistance to do much of 

the development of the Plan (emphasis added).161 

OCC staff communicated to Committee staff that the Bank’s reliance on outside 

consultants for regulatory expertise was “unusual” compared to its peer institutions.162

C. Wells Fargo and Political Appointees at the CFPB had Backchannel

Communications Regarding the CFPB’s Compliance Risk Management

Consent Order

During the course of its investigation, Committee staff learned that career employees and 

political appointees at times provided the Bank conflicting information regarding the 

statuses of potential actions the Bureau intended to take against the Bank for its compliance 

failures. In conjunction with its 2018 Compliance Risk Management Consent Order, the

CFPB signed an agreement with Wells Fargo Bank delaying until July 20, 2019 any decision 

on whether to resolve seven matters requiring the Bank to take corrective action, including 

remediating consumers through public enforcement actions or through the Office of 

Supervision.163 These matters involved potentially thousands of consumers and millions of 

dollars in consumer harm.164 Resolving these matters non-publicly through the Office of 

Supervision prevents consumers from learning the true extent of the Bank’s misconduct. 

The CFPB extended the July 20, 2019 deadline until June 2020, further delaying any 

potential disclosure of additional consumer abuses committed by Wells Fargo.165 During a 

meeting on July 24, 2019, the CFPB and Wells Fargo disagreed about whether the CFPB had 

159 See Appendix 2: Email from Michael Loughlin, Chief Risk Officer, WFC, to Tim Sloan, Chief 

Executive Officer, WFC, WF-HFSC-000060350 (Jan. 11, 2019).

160 Interview with OCC staff (Feb. 4, 2020).

161 OCC Report of Examination, OCC-HFSC-WF_2019_00008332-405 at 370 (Jul. 17, 2018) (on file 

with the House Financial Services Committee).

162 Id. 

163 CFPB Tolled Matters, HFSC_CFPB_041019_00009285-302 (Jan. 2019) (on file with the House 

Financial Services Committee); Interview with CFPB Regional Director for the Western Region (Jan. 

30, 2020).

164 CFPB Tolled Matters, HFSC_CFPB_041019_00009285-302 (Jan. 2019) (on file with the House 

Financial Services Committee).

165 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020).
35

already decided to resolve the matters through the Office of Supervision.166 According to notes 

from the meeting produced by the CFPB, Wells Fargo’s Interim CEO Allen Parker understood 

from his prior conversations with Eric Blankenstein, a political appointee overseeing the 

Office of Supervision, that the matters would be resolved non-publicly through the Office of 

Supervision.167 The meeting notes further reflect that career CFPB officials informed Wells 

Fargo during the meeting that, contrary to Parker’s understanding, the CFPB had not made 

any decisions and reserved the right to bring enforcement action if appropriate.168 

Prior to the July 24, 2019 meeting, Parker spoke to Blankenstein on May 17, 2019 

before he departed the Bureau.169 In an email to Bank Board Chair James Quigley recounting 

his conversation with 

Blankenstein, Parker 

noted that, “Eric 

also assured me 

that there would

continue to be 

‘political’ oversight 

of the engagement 

with us, although 

he wasn’t yet sure 

who his successor 

would be” (emphasis 

added).

170 Quigley 

indicated that he 

would follow up 

with Blankenstein.171

The CFPB's Western

regional director in charge of supervising Wells Fargo was not involved in any discussions 

between the Bank and Blankenstein.172 Separate lines of communications between political 

166 CFPB Meeting Notes, HFSC_CFPB_041019_000021418-20 (Jul. 24, 2019) (on file with the House 

Financial Services Committee). 167 Id. 

168 Id. 169 According to the Washington Post, an inspector general report found that after media reports 

surfaced about racist blogposts he authored, Blankenstein “may have abused his authority and 

misused his position for private gain” in requesting that a subordinate, the head of the Office of Fair 

Lending and Equal Opportunity, submit a statement to the Washington Post on his behalf. Renae 

Merle, Trump’s former anti-discrimination official ‘may have abused his authority,’ inspector 

general’s report finds, The Washington Post (Jul. 29, 2019), available at

https://www.washingtonpost.com/business/2019/07/29/trumps-former-anti-discrimination-officialmay-have-abused-his-authority-inspector-generals-report-finds/

170 See Appendix 3: Email from C. Allen Parker, Interim Chief Executive Officer, WFC, to Jim 

Quigley, Director, WFC, WFBOD-HFSC-00018821-22 at 21 (May 17, 2019).

171 See Appendix 3: Email from C. Allen Parker, Interim Chief Executive Officer, WFC, to Jim 

Quigley, Director, WFC, WFBOD-HFSC-00018821-22 at 21 (May 17, 2019). 172 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020).

FROM: PARKER, ALLEN

DATE: FRIDAY, MAY 17, 2019 4:49 PM

TO: JIM QUIGLEY

SUBJECT: RE: ERIC BLANKENSTEIN

> ERIC ALSO ASSURED ME THAT THERE

WOULD CONTINUE TO BE ‘POLITICAL’ 

OVERSIGHT OF THE ENGAGEMENT WITH US, 

ALTHOUGH HE WASN’T YET SURE WHO HIS 

SUCCESSOR WOULD BE.
36

appointees and the Bank could potentially undermine the authority of career officials in their 

oversight of the institution. 

D. Wells Fargo’s Board Allowed Management to Repeatedly Submit

Materially Deficient Plans in Response to the Consent Orders

1. Wells Fargo submitted multiple deficient plans that required board

review (and with regards to plans required by the OCC, board approval) in

response to the 2016 Sales Practices Consent Orders.

The Committee staff’s 

investigation reveals that the 

CFPB and OCC repeatedly 

rejected the Bank’s compliance 

and redress plans required under 

the 2016 Sales Practices Consent 

Orders as incomplete or otherwise 

deficient. For example, the CFPB 

concluded that the Bank’s initial 

compliance plan was, “not specific 

enough to enable the CFPB to 

determine whether Wells Fargo 

Bank . . . will take the necessary 

actions to correct the deficiencies identified in the Independent Consultant’s Report.”173 The 

OCC determined it could not approve the Bank’s initial remediation plan because “key 

portions of the plan are discussed only generally because they remain under development.”174

CFPB’s Western regional director described to Committee staff how the Bank would often 

submit a “plan for a plan” instead of a complete submission.175 According to the CFPB’s 

Western regional director’s interview testimony and subsequent communications between 

CFPB staff and Committee staff, as February 24, 2020 Wells Fargo Bank has submitted its 

remediation plan to the CFPB four times, most recently on January 31, 2020, and its 

compliance plan three times, most recently on April 30, 2019.176 The CFPB’s Western regional 

director also indicated that Wells Fargo’s repeated submission of unacceptable plans was 

“unusual” in comparison to other banks.177 As of January 30, 2020, more than four years after 

the Consent Order, the CFPB has not approved the Bank’s remediation plan or compliance 

plan.178 Each plan rejected by CFPB required board review, and each plan rejected by the 

OCC required board approval.

173 Letter from CFPB Regional Director to Betsy Duke, Chair of the Board of Directors, WFC 

HFSC_CFPB_041019_00001622-23 (Dec.15, 2017) (on file with the House Financial Services 

Committee).

174 Letter from OCC to Wells Fargo, WF-HFSC-000151931-32 at 1931 (Feb. 23, 2017) (on file with 

the House Financial Services Committee).

175 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020).

176 Id. 177 Id. 178 Id.

CFPB’S WESTERN REGIONAL 

DIRECTOR DESCRIBED TO 

COMMITTEE STAFF HOW THE BANK 

WOULD OFTEN SUBMIT A “PLAN 

FOR A PLAN” INSTEAD OF A 

COMPLETE SUBMISSION.
37

2. Despite repeated and consistent feedback from Federal Reserve staff,

Wells Fargo repeatedly submitted materially incomplete plans in response to

the 2018 Federal Reserve Consent Order.

Following the issuance of the 2018 Federal Reserve Consent Order, Federal Reserve

staff held regular meetings with Wells Fargo board members and executives responsible for 

developing the submissions 

required under the order. 

These meetings included 

weekly discussions between 

Federal Reserve staff and Wells 

Fargo personnel on topics 

selected by the firm, during 

which Federal Reserve staff 

answered questions from Wells 

Fargo personnel and laid out 

the Federal Reserve’s

expectations for satisfying the 

terms of the consent order. 

Additionally, Wells Fargo

personnel provided progress 

updates to Federal Reserve staff and received informal feedback on draft components of Wells 

Fargo’s submissions. 

The discussions between Federal Reserve and Wells Fargo personnel during these 

meetings are memorialized in meeting minutes and notes produced by the Federal Reserve, 

Wells Fargo, and certain Wells Fargo board members. The meeting records show that Federal 

Reserve staff consistently emphasized to the Company’s directors and management that 

Wells Fargo’s plans under the consent order needed to, among other requirements: identify 

the root causes of the problems addressed; explain how each required program would operate 

once Wells Fargo remediated the problems; outline the steps necessary to get from the 

current state to an operational and effective program; and, clearly define responsibilities and 

lines of accountability. 

In addition to weekly meetings with Wells Fargo’s management to discuss consent 

order progress, Federal Reserve staff held one-on-one sessions with several of Wells Fargo’s 

directors and senior executives to receive candid information about ongoing issues within the 

firm and the state of the firm’s progress toward fixing its systemic risk management and 

compliance weaknesses.179

On April 3, 2018, Wells Fargo made its first submission of plans for board effectiveness 

and risk management under the 2018 Federal Reserve Consent Order. Despite receiving 

consistent direction from Federal Reserve staff on what sufficiently detailed plans should 

include, Wells Fargo’s first submission of plans for board effectiveness and risk management, 

179 See Federal Reserve Meeting Minutes (Feb. 7, 2018 – July 26, 2019) (on file with the House 

Financial Services Committee). 

ACCORDING TO A FEDERAL RESERVE 

LETTER, FEDERAL RESERVE STAFF 

INFORMED WELLS FARGO THAT ITS 

SUBMISSION WAS SO, “MATERIALLY 

INCOMPLETE” THAT THE PLANS, “CANNOT 

BE EVALUATED BY [FEDERAL RESERVE] 

STAFF FOR THEIR ADEQUACY.”
38

made on April 3, 2018, fell woefully short of the Federal Reserve’s expectations. In a May 7, 

2018 response letter, Federal Reserve staff informed Wells Fargo that its submission was so, 

“materially incomplete” that the plans, “cannot be evaluated by [Federal Reserve] 

staff for their adequacy” (emphasis added). 180 The letter reiterated feedback that Federal 

Reserve staff provided to Wells Fargo personnel in meetings held in February and March of 

2018. The letter also provided details about the incomplete elements of Wells Fargo’s 

submission. For example, the Federal Reserve noted that “[b]uilding an effective operational 

risk management program is a key focus of the Order,” yet “...[t]he plans fail to

comprehensively address operational risk....”181 According to the Federal Reserve, Wells 

Fargo failed to include key implementation details about all self-identified categories of 

operational risk.182

The Federal Reserve rejected Wells Fargo’s April 3, 2018 submission and gave the 

firm 90 days to submit revised plans that addressed the requirements of the consent order 

and was consistent with the feedback provided by Federal Reserve staff.183

After receiving Wells Fargo’s April 3, 2018 submission, Federal Reserve staff 

continued to engage in regular meetings with Wells Fargo directors and management 

regarding the requirements of the consent order and the Federal Reserve’s expectations for 

Wells Fargo’s plans.184 On October 31, 2018, after the Federal Reserve approved two 

extension requests from the firm, Wells Fargo submitted revised plans addressing board 

effectiveness and risk management. While the Federal Reserve considered some aspects of 

the plans acceptable or partially acceptable, other aspects lacked fundamental elements 

necessary to address the issues identified in the 2018 Federal Reserve Consent Order. 

Overall, Wells Fargo’s October 31, 2018 submission failed to meet the Federal Reserve’s 

expectations and was rejected. 185

On March 11, 2019, the day before Sloan testified before the House Financial Services 

Committee, the Federal Reserve sent a letter to WFC Chair Duke and CEO Sloan in response 

to Wells Fargo’s October 31, 2018 plans. Although the Federal Reserve noted that Wells 

Fargo had made some progress, it found that, “the firm’s plans to remediate the Order 

remain materially incomplete,” with respect to operational risk management and other 

requirements of the consent order (emphasis added).186 In addition to identifying 

fundamental gaps in Wells Fargo’s plans, Federal Reserve staff noted that the plan was 

riddled with errors and discrepancies, such as incorrect progress indicators for deliverables 

180 Letter from Federal Reserve to Elizabeth Duke, Chair of the Board of Directors, WFC, and Tim

Sloan, Chief Executive Officer, WFC, FRB_HFSC-00003438-43 (May 7, 2018) (on file with the House 

Financial Services Committee).

181 Id.

182 Id.

183 Id.

184 See Federal Reserve Meeting Minutes (Apr. 10, 2018 – Oct. 26, 2018) (on file with the House 

Financial Services Committee).

185 See Letter from Federal Reserve to Elizabeth Duke, Chair of the Board of Directors, WFC, and 

Tim Sloan, Chief Executive Officer, WFC, FRB_HFSC-00018565-75 (Mar. 11, 2019) (on file with the 

House Financial Services Committee).

186 Id.
39

and “illogical timeframes” for achieving future milestones.187 According to the letter, 

“[p]ervasive inaccuracies—though immaterial in isolation—in aggregate, weaken the plan’s 

credibility and impede clarity.”188 In the letter, the Federal Reserve admonished Wells 

Fargo’s board and management for the quality of the firm’s two submissions to date, writing:

Continued failure to submit acceptable plans reflects poorly on the 

firm, and negatively influences supervisors’ view of the board and 

senior management's capacity to effectively manage and govern the 

firm. The [Federal Reserve] expects the firm to take the time necessary to 

develop its next plans and ensure greater quality control. A third failure to 

submit acceptable plans could cause the [Federal Reserve] to consider 

additional actions (emphasis added).189

3. Wells Fargo submitted multiple deficient plans in response to the

2018 Compliance Risk Management Consent Orders.

On June 19, 2018, Wells Fargo made its first submission to the OCC under the OCC’s 

2018 Compliance Risk Management Consent Order. On July 24, 2018, the OCC rejected 

Wells Fargo’s submission, noting in a response letter that, “[d]espite the OCC including 

detailed requirements and expectations in the [Consent Order] document, the bank’s 

submission response lacks substance and detail in a number of areas.”190 For example, the 

OCC requested that the Bank resubmit its plan for remediating customers affected by Wells 

187 Id. 188 Id.

189 Id.

190 Letter from OCC to Wells Fargo, OCC-HFSC-WF-2019-00012014-18 at 14 (July 24, 2018) (on file 

with House Financial Services Committee).

CONTINUED FAILURE TO SUBMIT ACCEPTABLE PLANS 

REFLECTS POORLY ON THE FIRM, AND NEGATIVELY 

INFLUENCES SUPERVISORS’ VIEW OF THE BOARD AND 

SENIOR MANAGEMENT'S CAPACITY TO EFFECTIVELY 

MANAGE AND GOVERN THE FIRM.

- FEDERAL RESERVE
40

Fargo’s force-placed insurance practices because, among other deficiencies, the plan failed to 

provide for full and consistent remediation of harm. Specifically, the OCC wrote: 191

The OCC instructed the Bank to resubmit its plans for enhancing Wells Fargo’s 

internal audit function (Article VI of the consent order) and remediating CPI customers 

(Article VIII).192 Additionally, the OCC wrote that it would schedule meetings with the 

Bank’s management to discuss deficiencies in other components of the Bank’s submission.193

The OCC further noted that Wells Fargo’s continued failure to submit adequate plans could 

result in future action: 

The length of time a Bank takes to achieve full compliance with all 

provisions of an enforcement action is a factor in the OCC’s 

determination of any future supervisory and/or enforcement actions. 

Management’s action plan and timeframes for completion should demonstrate 

prompt corrective actions that are appropriately designed and will result in 

effective and sustainable resolution of the longstanding, uncorrected issues that 

are included in this [consent order] (emphasis added).194

The OCC’s vague warning that prolonged efforts could expose the Bank to “future 

supervisory and/or enforcement actions” proved empty as the quality of Wells Fargo’s 

submissions improved little over the next several months. In March 4, 2019, days before 

Sloan’s testimony before the Committee, the OCC acknowledged Wells Fargo’s limited 

progress in a Quarterly Management Report covering the 4th Quarter of 2018.195 In the 

report, the OCC expressed its view that Wells Fargo’s “management and Board oversight 

remain inadequate.”196 The OCC further wrote: 

191 Id. at OCC-HFSC-WF-2019-00012017. 192 Id. at OCC-HFSC-WF-2019-00012014. 193 Id.

194 Id. at OCC-HFSC-WF-2019-00012015. 195 OCC Quarterly Management Report, Wells Fargo & Company, OCC-HFSC-WF-2019-00002621-

49 (Mar. 4, 2019) (on file with House Financial Services Committee). 196 Id. at 23. 

AS WRITTEN, THE PLAN DOES NOT PROVIDE FULL 

REMEDIATION FOR ALL IMPACTED CUSTOMERS, AND, IN SOME 

INSTANCES, THE BANK’S INITIAL PLAN RESULTS IN THE 

INCONSISTENT AND POTENTIALLY UNFAIR TREATMENT OF 

CUSTOMERS WHO EXPERIENCED SIMILAR HARM (EMPHASIS 

ADDED).192
41

Although the bank is making progress in certain areas, significant time elapsed 

before the bank began demonstrating progress, and overall, progress is very 

slow. Additionally, the vast majority of progress appears to come after 

repeated pressure by the regulators, calling out missed deadlines, 

failed validations, and poor quality [sic] action plans. The Board and 

executive management must demonstrate the willingness and ability to 

implement and maintain effective corporate governance and risk management 

programs that span the enterprise (emphasis added).197

E. Wells Fargo’s Board and Management Prioritized Financial and

Other Considerations Above Fixing Issues Identified by Regulators

1. Wells Fargo’s Chief Risk Officer wanted to limit remediation to

consumers and manipulate regulators. 

The Committee staff’s investigation uncovered an April 1, 2017 email exchange 

between Chief Risk Officer Michael Loughlin and Chief Executive Officer Tim Sloan that 

reflects an unwillingness to take seriously the Bank’s obligations under the 2016 Sales 

Practices Consent Orders to fully compensate harmed consumers and fix its internal 

controls.198 

197 Id.

198 See Appendix 4: Email from Michael Loughlin, Chief Risk Officer, WFC to Tim Sloan, Chief 

Executive Officer, WFC, WF-HFSC-000051295 (Apr. 1, 2017). 
42

According to his email, Loughlin wanted to establish a process that placed the burden 

on consumers victimized by Wells Fargo’s opening of fraudulent accounts to make a claim for 

compensation. Under 

Loughlin’s proposal, 

Wells Fargo would

limit the amount of 

time for consumers to 

come forward to only 

five or six months. 

Moreover, he wanted 

to use a potential 

charitable donation 

as leverage to compel 

the OCC and CFPB

to lift the 2016 Sales 

Practices Orders. 

Mere weeks 

after Loughlin sent 

this email, former 

Company Board 

Chair Stephen Sanger represented to shareholders at Wells Fargo’s annual meeting that

“[t]he Board has complete confidence in Tim Sloan and in the rest of the company’s senior 

leadership team. The Board believes that the company has a strong foundation to serve our 

customers and earn back the trust of all our key stakeholders.”199 It strains credulity that the

Board could profess its commitment to serving the Bank’s customers while at the same time 

expressing support for senior leaders such as Loughlin. 

2. Until 2017, Wells Fargo had a policy allowing the Bank to misuse the

attorney-client privilege to hide documents from its regulators and board, and

the Bank withheld documents from the independent consultant tasked with

evaluating the Bank’s sales practices and informing its compliance plan.

Committee staff discovered during its investigation that in 2017 the OCC uncovered 

a previously undisclosed Wells Fargo policy allowing the Bank to use attorney-client privilege 

to withhold information from regulators and the Company’s board.200 The Bank rescinded 

the policy only after the OCC discovered it. 201Additionally, there were other instances where 

the bank did not timely inform the OCC about important issues within the Company.202 

199 Wells Fargo Stories, Stockholders re-elect Board (Apr. 26, 2017), available at 

https://stories.wf.com/stockholders-re-elect-board/. 200 Id. 

201 Id.

202 Id.

If any of the $200MM [for customers injured due to 

unauthorized accounts] is left over, we promise to 

give it to charity---only after the CFPB and the OCC 

let us out of the consent orders. If they do not, no 

donation. Put the onus back on them.

- Michael Loughlin

Wells Fargo Chief Risk Officer
43

The Bank demonstrated a 

similar lack of transparency in 

meeting its obligations under the 

CFPB Sales Practices Consent 

Order. Wells Fargo Bank selected 

professional services firm Grant 

Thornton as the independent 

consultant tasked under the terms 

of the 2016 Sales Practices Consent 

Orders with reviewing the Bank’s 

sales practices.203 During the 

required sales practices review, the 

Bank withheld certain documents 

and information from Grant 

Thornton, including board minutes 

and emails from CEO Tim Sloan.204 Grant Thornton communicated to regulators that the 

Bank’s withholding of documents could impede its review. Notes from a February 10, 2017 

meeting between Grant Thornton, the CFPB, and the OCC reveal that a Grant Thornton 

representative indicated he “would be uncomfortable not getting these documents and having 

to give an opinion on whether or not the Bank is in compliance with the Consent Order . . . 

[and] issuing a report with all kinds of disclaimers about information that was withheld from 

them.”205 The CFPB shared Grant Thornton’s concerns. The CFPB’s Western regional

director in a February 28, 2017 letter copied to the chair and vice chair of Wells Fargo’s board 

described the withheld documents as, “critical to Grant Thornton’s work to conduct an 

independent review of the Bank’s sales practices.”206 

The Bank disregarded the views of Grant Thornton and the CFPB, asserting in a 

March 13, 2017 letter that, “after careful deliberations, the Bank decided not to release to 

Grant Thornton documents and information that is protected by the attorney-client privilege 

because of the potential legal risk that would result from such a disclosure.”207 After Grant 

Thornton submitted its report, the CFPB Western regional director communicated to the 

chair and vice chair of the Wells Fargo board in a September 29, 2017 letter that withholding 

documents from Grant Thornton, “impacted Grant Thornton’s transaction testing as well as 

203 Letter from OCC to Wells Fargo, WF-HFSC-0000060326- 27 (Dec. 6, 2016) (on file with the House 

Financial Services Committee); Letter from CFPB Regional Director to Wells Fargo, 

HFSC_CFPB_041019_00001583 (Nov. 23, 2016) (on file with the House Financial Services 

Committee).

204 CFPB Memo Meeting with Grant Thornton, HFSC_CFPB_041019_00021344 (Aug. 29, 2017) (on 

file with the House Financial Services Committee).

205 Email from CFPB Senior Exam Advisor, HFSC_CFPB_041019_00021299-300 (Feb. 10, 2017) (on 

file with the House Financial Services Committee).

206 Letter from CFPB Regional Director to Wells Fargo, HFSC_CFPB_041019_00002773-74 (Feb. 28, 

2017) (on file with the House Financial Services Committee).

207 Letter from Wells Fargo to CFPB Regional Director, HFSC_CFPB_041019_00001586-93 at 88 

(Mar. 13, 2017) (on file with the House Financial Services Committee).

Committee staff discovered during its 

investigation that in 2017 the OCC 

uncovered a previously undisclosed 

Wells Fargo policy allowing the Bank 

to use attorney-client privilege to 

withhold information from regulators 

and the Company’s board.
44

its ability to get a more complete picture of the Bank’s sales practices problems and their 

potential causes.”208

The issue of Wells Fargo withholding documents from Grant Thornton arose during 

an August 29, 2017 meeting between the CFPB and Grant Thornton. Notes from the meeting 

reflect that the CFPB Western regional director stated that he had discussions with Wells 

Fargo board members about this issue, and that Grant Thornton had told the board, “that 

they had received all the information they needed and that the privileged information had 

not affected their work or conclusions.”209 One Grant Thornton representative at the meeting 

responded that this was an “over-generalization,” and another replied that “we never would 

have stated that the documents were unimportant since we do not know what we do not 

know.”210 This exchange raised significant concerns to Committee staff about whether Wells 

Fargo’s board was fully aware of the significance of withholding documents from Grant 

Thornton.

3. The board abdicated its responsibility to oversee the Bank’s compliance 

with the 2016 Sales Practices Consent Orders. 

Despite the 2016 Sales Practices Consent Orders’ explicit language holding Wells 

Fargo’s board ultimately responsible, the Committee staff’s investigation reveals that board 

members at times demonstrated a lack of urgency in their interactions with the regulators. 

A July 28, 2017 correspondence from the CFPB’s Western regional director to Board Chair 

Stephen Sanger and Vice Chair Betsy Duke expressed disappointment that Duke and 

Sanger, “did not have the flexibility to meet us in connection with your July 2017 or August 

2017 Wells Fargo Board of Directors meetings.”211

Board members also appeared reluctant to engage in oversight of the Bank’s efforts 

to comply with the 2016 Sales Practices Consent Orders. Notes from a November 28, 2017 

meeting between the CFPB and then-vice chair of Wells Fargo’s board, Betsy Duke, CEO Tim 

Sloan, and General Counsel C. Allen Parker reflect that Duke questioned the CFPB’s practice 

of including her on letters requesting the Bank take certain actions: “Why are you sending 

it to me, the board, rather than the department manager?” (emphasis added).212 An 

internal CFPB email summarizing that same meeting between the CFPB and the Bank 

similarly referenced that, “Duke expressed that she wondered why the CFPB was sending 

her letters regarding the Bank. This is reflective of [a] previous comment [Duke] made in 

early 2017” that she couldn’t get between the regulators and the bank attorneys when the 

208 Letter from CFPB Regional Director to Stephen Sanger, Former Chair of the Board of Directors, 

WFC, and Betsy Duke, Chair of the Board of Directors, WFC, HFSC_CFPB_041019_00001612-14

(Sept. 29, 2017) (on file with the House Financial Services Committee).

209 CFPB Memo re Meeting with Grant Thornton, HFSC_CFPB_041019_00021344 (Aug. 29, 2017) 

(on file with the House Financial Services Committee).

210 Id. 211 Letter from CFPB Regional Director to Stephen Sanger, Former Chair of the Board of Directors, 

WFC, and Betsy Duke, Chair of the Board of Directors, HFSC_CFPB_041019_00001599-600 (July 

28, 2017) (on file with the House Financial Services Committee). 212 Memo from CFPB Examiner, HFSC_CFPB_041019_00021582-86 (Nov. 28, 2017) (on file with the 

House Financial Services Committee).
45

CFPB experienced difficulties with the Bank’s outside counsel.213 During an interview with 

Committee staff, the CFPB’s Western regional director said that Duke’s email came as a 

surprise as, in the regional director’s view, a board member would not typically object to 

receiving communication from a regulator.214 Committee staff’s review of these documents 

revealed that Duke was not fulfilling her obligation to oversee management’s compliance 

with the 2016 Sales 

Practices Consent orders. 

James Quigley, 

chairman of Wells Fargo 

Bank’s board, exhibited a 

similar lack of urgency in 

his engagement with the 

Bank’s regulators and a 

reluctance to oversee the 

Bank’s efforts to meet its 

obligations under the 2016 

Sales Practices Consent 

Orders. On February 22, 

2019, the Company’s 

corporate secretary sent an e-mail to Quigley, Board Chair Betsy Duke, and CEO Tim Sloan 

indicating that the OCC wanted to meet with the Bank’s independent directors to discuss 

“progress and accountability.”215 The OCC proposed to schedule the meeting on March 7 or 

8, which was four to five days before CEO Tim Sloan was scheduled to testify before the 

Committee. Quigley, wanting to postpone the meeting, responded: 

I am currently scheduled to be in the Galapagos Islands on these dates. I have 

made arrangements to have a satellite phone available during these days. I will 

do my best to participate, but I am not certain on the stability of 

communications in that part of the world. My strong preference is to do this the 

following week, we have our regular quarterly meeting that following week. Why 

not have our meeting and discussion and follow with a WFBNA board 

discussion. The sense of urgency is surprising, are they politically trying to 

put an enforcement action in place in front of the hearing? Do we have any 

options? Or is our only response we are happy to meet whenever 

requested? (emphasis added).216 

213 Email from CFPB Examiner, HFSC_CFPB_041019_00021580 (Mar.11 2018) (on file with the 

House Financial Services Committee).

214 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020).

215 See Appendix 5: Email from Anthony Augliera to James Quigley, et al, WFBOD-HFSC-00018782- 

83 (Feb. 22, 2019).

216 See Appendix 5: Email from James Quigley, Betsy Duke et al., WFBOD-HFSC-00018782-83 at 82 

(Feb. 22, 2019).

Why are you sending it to me, the board, 

rather than the department manager?

- Betsy Duke

Then-Vice Chair of Wells Fargo’s Board
46

Notes regarding a November 21, 2016 meeting between Quigley and the CFPB 

reflected his complaint that, “the Board was spending too much time on Sales 

Practices and that he was looking to reduce the level of detail with a ‘Less is More’ 

comment in regards to Board materials on Sales Practices” (emphasis added).217 In 

an interview with Committee staff, OCC staff expressed concerns about Quigley’s leadership. 

OCC staff recounted that Quigley did not pose “hard questions” to management.218

Additionally, OCC staff explained that Quigley believed management was performing well

and that the Bank’s condition was acceptable despite its ongoing regulatory issues. 219

The Bank board’s responsibility under the 2016 Sales Practices Consent Orders for 

addressing the compliance breakdowns that led to the opening of millions of fraudulent 

accounts is consistent with Wells Fargo’s own corporate governance guidelines, which state 

“the business of the Company is managed under the direction and oversight of its Board.”220

Under those guidelines, the board bears the responsibility for “holding senior management 

accountable for implementing the Company’s strategic plans and risk tolerance and 

maintaining the Company’s risk management and control framework.”221 

Wells Fargo board members are highly compensated for taking on these 

responsibilities. For example, Wells Fargo paid Duke $631,004 in total compensation 

($451,000 in cash and Company stock valued at $180,004) for serving as the chair of the Wells 

Fargo’s board in 2018.222 As a board member of WFC and chair of the Bank board in 2018, 

Quigley received $417,004 in total compensation ($237,000 cash and Company stock valued 

at $180,004).223 Committee staff’s investigation uncovered that Duke and Quigley failed to 

satisfy their obligations as board members. 

4. Wells Fargo continued to focus on growth after regulators identified

unchecked risks associated with growth and new initiatives.

In its 2016 inspection report, the Federal Reserve communicated its assessment of 

Wells Fargo’s processes for managing strategic risk, which includes risks associated with new 

products and growth initiatives. In the report, the Federal Reserve emphasized that effective 

risk management was particularly important in this area given Wells Fargo’s growth 

strategy.224 The Federal Reserve found, among other issues, that Wells Fargo’s, “build out of 

risk control functions, particularly operational risk, has not kept pace with growth initiatives 

217 Email from CFPB Examiner, HFSC_CFPB_041019_00021580 (Mar.11 2018) (on file with the 

House Financial Services Committee).

218 Interview with OCC staff (Feb. 4, 2020).

219 Id. 220 WFC, Wells Fargo & Company Corporate Governance Guidelines, available at 

https://www08.wellsfargomedia.com/assets/pdf/about/corporate/governance-guidelines.pdf. 221 Id. 222 WFC, Wells Fargo 2019 Proxy Statement at 52, available at

https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/annual-reports/2019-proxystatement.pdf. 223 Id. 224 Letter from Federal Reserve to Board of Directors, WFC, WF-HFSC-000121028 (Oct. 14, 2016).
47

in key areas.”225 Further, the Federal Reserve found that Wells Fargo had not fully 

implemented an effective process for managing strategic risk and was consequently illequipped to introduce new products and initiatives.226

According to an internal Wells Fargo memo, Federal Reserve staff met with senior 

Wells Fargo executives, including then-Chief Risk Officer, Michael Loughlin, following the 

issuance of the 2016 report of inspection to discuss the Federal Reserve’s findings. In an 

October 25, 2016 memo to the WFC board of directors, Loughlin noted that one of the key 

takeaways from the meeting was that the firm needed to focus its resources on remediating 

systemic weaknesses, rather than growth:

Growing the company via new products, mergers & acquisitions, and/ 

or significant strategic business initiatives should not be a current 

area of focus given the significant weaknesses identified. Already complicated 

compliance, data, and operational risk issues should not be further 

complicated, and company resources need to remain focused on addressing 

company weaknesses, including strategic risk management (emphasis in 

original).227

Wells Fargo’s 2017 Investor Day materials demonstrate that, despite the deficiencies 

identified by the Federal Reserve, the Company continued to focus on growth, including with 

respect to new products.228 For example, the Investor Day presentation from Wells Fargo’s 

wholesale banking operation, which provides financial services to other businesses, lists five 

“strategic priorities,” the second of which is “[d]rive growth – [f]ocus on accelerating top and 

bottom-line growth through a number of key opportunities across Wholesale Banking while

divesting non-core capabilities.”229 

5. Key leaders at Wells Fargo were focused on lifting the Federal Reserve’s

asset cap, rather than addressing the Company’s systemic risk management

weaknesses.

Wells Fargo’s repeated submission of materially incomplete and unacceptable plans 

to the Federal Reserve appears to have been driven, in part, by the desire of key leaders 

within the Company to quickly exit the public consent order and lift the asset cap, rather 

than fully remediate the systemic problems that necessitated the order. 

Records of meetings between Federal Reserve staff and Wells Fargo personnel 

indicate that Wells Fargo’s board expected management to develop and implement the plans 

225 Id.

226 Id.

227 WFC, Federal Reserve System's Annual Summary of Supervisory Activities: Wells Fargo & 

Company, WF-HFSC-000120244-49 at 49 (Oct. 25, 2016)) (on file with the House Financial Services 

Committee). 228 WFC, Wholesale Banking Presentation (May 11, 2017), available at 

https://www08.wellsfargomedia.com/assets/pdf/about/investorrelations/presentations/2017/wholesale-banking-presentation.pdf. 229 Id. at 18.
48

required under the 2018 Federal Reserve Consent Order by July 31, 2018, so that the firm 

could meet the “public” September 30, 2018 deadline for third-party review under the 

order.230 According to the Federal Reserve’s communications with Committee Staff during 

the course of this investigation, Wells Fargo specifically requested the September 30, 2018 

deadline for third-party review during consent order negotiations between the Company and 

the Federal Reserve. Under the terms of the 2018 Federal Reserve Consent Order, the asset 

cap would remain in effect until the completion of this review. A senior Wells Fargo executive 

communicated this expectation of Wells Fargo’s board to Federal Reserve staff in a March 

29, 2018 meeting.231 

Federal Reserve staff expressed concerns about whether Wells Fargo’s internal 

implementation deadline of July 31, 2018 was reasonable, and suggested that there was some 

flexibility with respect to the timelines in the 2018 Federal Reserve Consent Order, noting

that the Federal Reserve prioritized ensuring that Wells Fargo was operating in a safe and 

sound manner over lifting the asset cap.232

Additionally, Wells Fargo’s own internal audit representative communicated during 

the meeting that the internal July 31, 2018 implementation deadline would not provide 

sufficient time to validate the effectiveness of the corrective actions taken. According to 

Federal Reserve meeting minutes, a senior Wells Fargo executive expressed that “they wish 

they had more time,” but, given the timelines in the consent order, Wells Fargo’s board of 

directors was pressing to meet the July 31 deadline and expected that it was achievable.233

On April 3, 2018, the day of Wells Fargo’s first submission, Federal Reserve staff met 

with Betsy Duke, chair of the Company’s board of directors, for an introductory meeting and 

to discuss the 2018 Federal Reserve Consent Order. During the meeting, Federal Reserve

staff questioned Wells Fargo’s internally-imposed implementation date of July 31, 2018 and 

the Company’s self-selected September 30, 2018 deadline for third-party review.234 Duke’s 

response, as reflected in meeting minutes prepared by the Federal Reserve staff, suggests 

that she was concerned about the asset cap, even though she was unable to evaluate the 

degree of actual progress made by the firm. The Federal Reserve’s meeting minutes include 

the following account of Duke’s comments: 

In response, Duke made the following remarks:

o The asset cap is outside of the Fed’s ‘objectives’ and Duke remarked that

she could not think of any other time when an asset cap had been used.

(There appeared to be some disconnect regarding the degree of

implementation that needs to occur before the asset cap can be lifted.)

230 Meeting Minutes, FRB_HFSC-00021458-64 (Mar. 29, 2018) (on file with the House Financial 

Services Committee). 231 Id. 

232 Id.

233 Id. at FRB_HFSC-00021461. 234 Meeting Minutes, FRB_HFSC-00020437-41 (Apr. 3, 2018) (on file with the House Financial 

Services Committee). 
49

o There has been some progress on risk identification, testing and

validation—though she is not sure how to assess progress in this area.235

As the meeting progressed, Federal Reserve staff again raised concerns about the 

September 30, 2018 deadline in light of the remaining work Wells Fargo still needed to 

accomplish and the Federal Reserve’s pending review of Wells Fargo’s plans. According to 

the meeting minutes, Federal Reserve staff particularly expressed concern that the focus of 

Wells Fargo’s CEO’s focus on quickly lifting the asset cap could be inconsistent with the 

Federal Reserve’s objectives in imposing the consent order, which focused on ensuring that 

Wells Fargo operated in a safe and sound manner.236 

Internal Wells Fargo 

communications also reflect an 

undue focus among Wells Fargo’s 

management and board members 

on quickly exiting the Federal 

Reserve’s consent order instead of 

taking the necessary time to 

address the weaknesses within the 

Company. For example, in a 

February 19, 2018 email to 

Loughlin, fewer than three weeks 

after the asset cap was imposed, 

Duke expressed a view that Wells 

Fargo’s “credibility and perhaps 

even viability as a company is 

dependent on successfully exiting these consent orders along with the new Fed CO 

in 2019” (emphasis added).237 Additionally, after the Federal Reserve rejected Wells Fargo’s 

April 3, 2018 plans as “materially incomplete,” Ted Craver, a director of Wells Fargo and 

Wells Fargo Bank who sits on Wells Fargo board’s audit and examination committee, 

questioned in an email to Duke whether the plans “miss[ed] the mark” because Wells Fargo 

“perhaps rushed the job in our zeal to clear this hurdle quickly.”238

Sloan’s communications reflect that he, too, prioritized lifting the asset cap over 

taking the steps necessary to fix Wells Fargo. For example, in a May 13, 2018 email to Sloan 

and other senior Wells Fargo executives, a senior Wells Fargo executive proposed an 

integrated approach to addressing similar risk management reforms required by three 

consent orders: the 2018 Federal Reserve Consent Order, and April 20, 2018 orders issued 

235 Id. at FRB_HFSC-00020439. 236 Id. at FRB_HFSC-00020440.

237 See Appendix 6: Email from Elizabeth Duke, Chair of the Board of Directors, WFC, to Michael 

Loughlin, Chief Risk Officer, WFC, WFBOD-HFSC-00015523 (Feb. 19, 2018). 

238 See Appendix 7: Email from Theodore Craver, Jr., Director, WFC, to Elizabeth Duke, Chair of the 

Board of Directors, WFC, WFBOD-HFSC-00000522 (May 8, 2018).

DUKE EXPRESSED A VIEW THAT 

WELLS FARGO’S “CREDIBILITY AND 

PERHAPS EVEN VIABILITY AS A 

COMPANY IS DEPENDENT ON 

SUCCESSFULLY EXITING THESE 

CONSENT ORDERS ALONG WITH 

THE NEW FED CO IN 2019.” 
50

by the OCC and CFPB.239 The senior executive indicated that Karen Peetz, Wells Fargo

board’s Risk Committee Chair, and Juan Pujadas, another Wells Fargo director on the 

board’s Risk Committee, were “supportive of developing an integrated plan that captures 

work across the three Consent Orders.”240 The senior executive also noted that the Federal 

Reserve and OCC were open to an integrated response to their consent orders and that the 

CFPB was potentially supportive as well. In response, Sloan expressed that he wanted to 

avoid complicating the Federal Reserve’s decision on lifting the asset cap: “I am very

concerned with melding of three regulatory [consent orders] as we do not want each 

agency to effectively have veto rights over the Asset Cap review” (emphasis added).241

The senior executive, in reply, committed to “work to ensure that whatever we do to reduce 

overlap/bring consistency that we don’t implicate the asset cap review.”242

Sloan’s communications also show that some of his actions were meant to give the 

Federal Reserve the appearance that he was not overly focused on lifting the asset cap. On 

June 5, 2018, Sloan, on behalf of Wells Fargo, sent a letter to the Federal Reserve formally 

requesting an extension to the deadline for submitting revised plans pursuant to the Federal 

Reserve’s feedback. Sloan wrote in the letter that, “[t]he requested extension would provide 

additional time for the Company to develop a robust response that is acceptable to the 

Federal Reserve by September 19, 2018.”243 However, in a June 3, 2018 email to WFC Chair 

Duke, Director Peetz, and Wells Fargo Bank Chair Quigley, Sloan expressed contrary 

motives for requesting an extension and made no mention of the need for additional time “to 

develop a robust response.”244 According to the email, Sloan thought an extension was 

unnecessary, but should nevertheless be requested to (1) reduce the chance that Wells Fargo’s 

new Chief Risk Officer, Amanda (“Mandy”) Norton, would recommend fundamental changes 

to the draft plans; (2) increase the likelihood that Federal Reserve staff would approve the 

239 See Appendix 8: Email between Head of Regulatory Relations, WFC, and Tim Sloan, et al., WFHFSC-000083955-57 at 56 (May 13, 2018).

240 Id. 241 Id. 242 Id.

243 The Federal Reserve granted WFC’s extension request on June 20, 2018. See Letter from 

Dedicated Supervisory Team Lead, Federal Reserve, to Elizabeth Duke, Chair of the Board of 

Directors, WFC and Tim Sloan, Chief Executive Officer, WFC, FRB_HFSC-0003445-46 (June 20, 

2018) (on file with the House Financial Services Committee). On August 24, 2018, WFC requested to 

extend the September 19, 2018 submission deadline to October 31, 2018. See Letter from Tim Sloan, 

Chief Executive Officer, WFC, to Federal Reserve, WF-HFSC-000064263 (Aug. 24, 2018) (incorrectly 

dated “August 24, 2017,” as evidenced by the letter’s content) (on file with the House Financial 

Services Committee). The Federal Reserve granted WFC’s second extension request on September 

11, 2018. See Letter from Dedicated Supervisory Team Lead Federal Reserve, to Elizabeth Duke, 

Chair of the Board of Directors, WFC and Tim Sloan, Chief Executive Officer, WFC, FRB_HFSC0003450-51 (on file with the House Financial Services Committee). 244 See Appendix 9: Email between T. Sloan, Chief Executive Officer, WFC, B. Duke, Chair of the 

Board of Directors, K. Peetz, Director, WFC, and J. Quigley, Director, WFC, WFBOD-HFSC00020082 (June 3 - 4, 2018).
51

plan; and (3) shape the Federal Reserve’s view that the Company was solely focused on lifting 

the asset cap.245 Specifically, Sloan wrote:

Even though the team feels confident in our ability to resubmit 

our plans on time, we have concluded we should ask the Fed for a 30-

45 day [extension] for the following reasons.

First, given [Norton’s] shortened Garden Leave,246 we believe it is 

prudent to allow her a few weeks to review our plan and our risk model 

to reduce the chance she will recommend any fundamental 

changes. Recall her original Garden Leave was to last until after our 

resubmission date.

Second, we believe it is prudent to be further along in our adoption and 

implementation as it is clear the Fed staff has accelerated that standard 

to approve the plans as opposed to leaving that to a third party as was 

the agreement in the Consent Order. Seeing our [risk target-operatingstate] in action further down in the organization will mean it is more 

likely we will receive an approval on this second submission.

Third, we believe this action will reduce the tension with the Fed 

regarding this Asset Cap and reinforce to them that we are most 

focused on getting this right rather than a singular goal of lifting the cap

(emphasis added).247

Rather than question Sloan’s motives or seek to determine whether the extension request 

had any relation to the time necessary to develop effective plans for addressing the issues 

underlying the 2018 Federal Reserve Consent Order, Quigley and Duke responded 

approvingly to Sloan’s email and agreed that his “logic is sound.”248 

The pressure to quickly lift the asset cap appears to have been partly motivated by 

Sloan’s interest in assuring investors that Wells Fargo was making significant progress. On

May 10, 2018, Sloan told investors and analysts at a Wells Fargo investor conference that,

“in order to have enough time to incorporate [the Federal Reserve’s] feedback” regarding 

Wells Fargo’s board governance and risk management plans under the 2018 Federal Reserve

Consent Order, “the Company is making plans to operate under the consent order’s asset cap 

245 Id.

246 “Garden” or “gardening” leave refers to the time period after an employee departs her job when 

she is not allowed to start of new job and continues to be paid by her prior employer. Gardening 

Leave, Cambridge Advanced Learner’s Dictionary & Thesaurus (online at 

https://dictionary.cambridge.org/dictionary/english/gardening-leave) (accessed Mar. 1, 2010).

247 See Appendix 9: Email between T. Sloan, Chief Executive Officer, WFC, B. Duke, Chair of the 

Board of Directors, K. Peetz, Director, WFC, and J. Quigley, Director, WFC, WFBOD-HFSC00020082 (June 3 - 4, 2018). 248 Id.
52

limitation through the first part of 2019.”249 Wells Fargo and Sloan repeated this expectation 

in updates to investors through the end of 2018.250 Sloan’s prediction changed only after it 

was reported, on December 10, 2018, that Federal Reserve Chairman Jerome Powell wrote 

in a letter to Sen. Elizabeth Warren that the Federal Reserve “does not intend to lift the asset 

cap until remedies to these issues have been adopted and implemented to our satisfaction.”251

According to reporting, Chairman Powell further wrote in the letter that “[t]he decision about 

terminating the asset growth restriction imposed on Wells Fargo will be made by a vote of 

the Board [of Governors of the Federal Reserve System].”252 On January 15, 2019, Sloan told 

investors during an earnings call that Wells Fargo was “now planning to operate under the 

asset cap through the end of 2019.”253

The obsession of Wells Fargo’s key leadership with lifting the asset cap had a 

counterproductive effect on the Company’s ability to address the issues underlying the 2018 

Federal Reserve Consent Order. In September 2018, Federal Reserve staff met with a senior 

executive at Wells Fargo to receive an update on the Company’s operational risk 

management program. According to meeting notes produced by the Federal Reserve, the 

senior executive expressed concern that the firm was busy building its risk management 

programs rather than managing ongoing risk.254 In notes from a January 24, 2019 meeting 

with senior Wells Fargo executives, Federal Reserve staff continued to express concerns that,

“[Wells Fargo] leadership seems to remain focused on lifting the asset cap by the 

end of the year as the primary goal, and is shaping remediation plans around that. 

This is affecting the way management is thinking (or being asked to think) about 

how remediation should be shaped and accomplished” (emphasis added).255 According 

to the Federal Reserve staff’s meeting notes, Wells Fargo presented an implementation 

249 SEC, Form 8-K for Wells Fargo & Company at Item 8.01 (May 10, 2018)., available at

https://www.sec.gov/Archives/edgar/data/72971/000007297118000326/wfc-05102018xform8k.htm.

250 WFC Form 10-Q for the Quarterly Period Ending June 30, 2018 at 58 (Aug. 3, 2018), available at 

https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/sec-filings/2018/secondquarter-10q.pdf; WFC Form 10-Q for the Quarterly Period Ending September 30, 2018 at 3 (Nov. 6, 

2018), available at https://www08.wellsfargomedia.com/assets/pdf/about/investor-relations/secfilings/2018/third-quarter-10q.pdf; Patrick Rucker, Wells Fargo reform plans fail to satisfy Fed after 

scandals: sources, Reuters (Dec. 6, 2018), available at https://www.reuters.com/article/us-wells-fargofed-balance/wells-fargo-reform-plans-fail-to-satisfy-fed-after-scandals-sources-idUSKBN1O513O).

251 CNBC, Wells Fargo won’t be allowed to grow its assets until its problems are fixed, Fed’s Powell 

says (Dec. 10, 2018), available at https://www.cnbc.com/2018/12/10/wells-fargo-wont-be-allowed-togrow-its-assets-until-its-problems-are-fixed-feds-powell-says.html. 252 Id.

253 The Motley Fool, Wells Fargo & Co (WFC) Q4 2018 Earnings Conference Call Transcript (Jan. 15 

2019), available at https://www.fool.com/earnings/call-transcripts/2019/01/15/wells-fargo-co-wfc-q4-

2018-earnings-conference-cal.aspx. 254 Federal Reserve Meeting Minutes, FRB_HFSC-00020586-88 (September 2019) (on file with the 

House Financial Services Committee). 255 FRB, Wells Fargo – Notes from Q&A Meeting, FRB_HFSC-00021564 (Jan. 24, 2019)(on file with 

House Financial Services Committee).
53

timeline ending in 

September 2019 (a date

selected by Wells Fargo).

Federal Reserve staff 

perceived the firm’s view 

that it could implement 

plans incorporating the 

Federal Reserve’s 

feedback by September 

2019 as improbable and 

unrealistic.256

On April 2, 2019, 

Wells Fargo’s Chief Risk 

Officer, Amanda Norton, 

sent an email to several 

of Wells Fargo’s senior 

executives, including interim-CEO Allen Parker, expressing her concerns about 

management’s priorities in connection with the risk management reforms required by 

regulators.257 Among her concerns, Norton wrote that Wells Fargo employees were cutting 

corners on a key requirement of the 2018 Federal Reserve Consent Order “due to time and 

resource constraints”:

I have a Business Process Management deep-dive for two hours on Friday as I 

had received a number of concerns re our progress against that program (a 

couple of these concerns also map to feedback we have heard from the Fed). This 

morning I received more feedback that “corners are being cut” in the 

prioritization of the process mapping due to time and resource 

constraints. We will add this issue to the Friday meeting agenda but short 

cuts cannot be the success path for this foundational work (emphasis 

added).258

In April 2019, Allen Parker, who took over as interim-CEO following Sloan’s departure, told 

an analyst that Wells Fargo would discontinue the practice of reporting a timetable for lifting 

the asset cap.259

256 Id.

257 See Appendix 10: Email from A. Norton to Senior Wells Fargo executives, WFHFSC-000052817 (Apr. 2, 2019.)

258 Id.

259 The Motley Fool, Wells Fargo & Co (WFC) Q1 2019 Earnings Call Transcript (Mar. 31, 2019),

available at https://www.fool.com/earnings/call-transcripts/2019/04/12/wells-fargo-co-wfc-q1-2019-

earnings-call-transcrip.aspx. 

[WELLS FARGO] LEADERSHIP SEEMS TO 

REMAIN FOCUSED ON LIFTING THE ASSET 

CAP BY THE END OF THE YEAR AS THE 

PRIMARY GOAL, AND IS SHAPING 

REMEDIATION PLANS AROUND THAT.

- FEDERAL RESERVE
54

6. Wells Fargo leaders sought to remove language from the OCC’s press 

release.

The committee staff’s investigation reveals that, prior to OCC’s announcement of its 

2018 Compliance Risk Management Consent Order, key leaders at Wells Fargo urged the 

OCC to remove language in its press release and consent order referring to the OCC’s 

authority to replace senior executive officers or board members of Wells Fargo Bank. 

According to witness testimony and documents obtained by Committee staff, Karen 

Peetz, Chair of Wells Fargo’s Risk Committee, called senior OCC examiners on April 17, 2018

to discuss language in the OCC’s draft press release announcing the 2018 OCC Compliance 

Risk Management Consent Order. Peetz further urged the OCC to consider non-public 

alternatives, such as a side letter or a call with Comptroller Joseph Otting. Peetz stated in 

an interview with Committee staff that, in her view, “there is a clear understanding that 

[removal of directors and management] is within their power, but it doesn’t have to be in the 

Wall Street Journal.”260

According to Peetz’ meeting notes, OCC staff commented that the OCC included the 

removal authority language in the press release due to concerns about specific executives at 

Wells Fargo, including Wells Fargo’s CEO Tim Sloan.261 Peetz’ notes indicated that the OCC 

staff viewed Sloan as, “a person who was there all along and was part of the problem”

(emphasis added).262

Wells Fargo’s attempt to influence the OCC’s press release strained the relationship 

between the Bank and OCC staff. In May 2018, Wells Fargo Bank board chair Jim Quigley, 

Chair of Wells Fargo Bank’s board of directors, met with senior OCC staff at his request in 

an attempt to “make progress on [his] desire to ‘turn the page’ on [Wells Fargo’s] relationship 

with the OCC.”263 In an email to Sloan, Duke, and Peetz, summarizing the meeting, Quigley 

wrote that, the “effort by Tim [Sloan] and Allen [Parker] to edit their press release was not 

appreciated, and damaged [Wells Fargo’s] relationship with [OCC staff].”264

7. Key Leaders at Wells Fargo were focused on financial considerations, 

rather than addressing the Bank’s compliance failures identified by the OCC.

In a May 23, 2018 email summarizing a meeting with senior OCC staff, Quigley 

informed Duke, Peetz, and Sloan about several concerns raised by OCC staff, including that 

Duke, Sloan, and Parker had demonstrated an “excessive focus on earnings impact” rather 

than fixing Wells Fargo’s broken compliance infrastructure:

260 Interview with Karen Peetz (Jan. 31, 2020). 

261 Handwritten Notes of K. Peetz, WFBOD-HFSC-00024877-85 at 77 (on file with the House 

Committee on Financial Services).

262 Handwritten Notes, WFBOD-HFSC-00024877-85 at 79 (on file with House Financial Services 

Committee).

263 See Appendix 11: Email from Quigley to Duke, Peetz, Sloan, et al., WFBOD-HFSC-00018518 -20 

at 18 (May 23, 2018).

264 Id at 20.
55

[The senior OCC official] has a growing issue in [their] head that we are too 

focused on financial performance, and that focus impairs progress in some other 

areas. . . In advancing proof points for this growing perception, [the OCC 

official] indicated that discussions in negotiating the recent consent order 

from the OCC, [the OCC official] was surprised that both Allen 

[Parker] and Betsy [Duke] commented on the ‘earnings’ impact of some 

matters included, and that he did not expect that from the GC or Chair

(emphasis added).265

Other senior OCC officials voiced concerns about Wells Fargo’s leaders’ outsized focus 

of Wells Fargo’s leaders on earnings to the entire board during a July 24, 2018 board 

meeting.266 According to board meeting minutes produced by Wells Fargo, a senior OCC

official commented during the meeting on “management’s focus on earnings, and . . . noted 

the importance of similarly focusing on addressing outstanding regulatory issues.”267

OCC staff again expressed concerns about management’s focus during a meeting an 

August 2018 meeting with key Wells Fargo leaders. On or about August 11, 2018, WFC Board 

Chair Duke, Wells Fargo Bank Chair Quigley, CEO Sloan, and a senior Wells Fargo executive 

met with Comptroller Otting and senior OCC officials in Washington, DC to discuss the 

OCC’s concerns with the Bank’s progress.268 According to an email from Duke summarizing 

the meeting, OCC staff raised six issues, including the OCC’s concern that, “[m]anagement 

and the Board prioritize or over-focus on earnings at the expense of risk 

management” (emphasis added).269

F. Wells Fargo’s Board Did Not Hold Senior Management Accountable

for Repeatedly Failing to Meet Regulators’ Expectations

Despite repeated regulatory failures, the Bank resisted holding senior management 

accountable. In November 2017, the OCC downgraded the Bank’s management rating, a 

relatively infrequent action.270 The OCC communicated to Committee staff that the 

management downgrade was driven by three primary themes: (1) an overall failure to 

265 Id. at WFBOD-HFSC-00018518. 266 Minutes of the Regular Meetings of the Boards of Directors of Wells Fargo & Company and Wells 

Fargo Bank, National Association, WF-HFSC-00036359-84 (July 23 - 24, 2018) (on file with the 

House Committee on Financial Services).

267 Id. at WF-HFSC-000036362. 268 See Appendix 12: Email from Duke to Wells Fargo Board, WFBOD-HFSC-00021759-60 at 59 

(Aug. 11, 2018).

269 Id. at WFBOD-HFSC-0001759. 270 Email from OCC to Tim Sloan, OCC-HFSC-WF-2019-00019847-48 (Nov. 1, 2017) (on file with the 

Committee) Interview with OCC staff (Feb.4, 2020). A bank’s management rating “reflects the 

capability of the board and management, in their respective roles, to identify, measure, monitor, and 

control the risks of a bank’s activities and to ensure a bank’s safe, sound, and efficient operation in 

compliance with applicable laws and regulations.” OCC, Comptroller’s Handbook – Bank Supervision 

Process at 74 (June 2018), available at https://www.occ.gov/publications-andresources/publications/comptrollers-handbook/files/bank-supervision-process/pub-ch-banksupervision-process.pdf.
56

implement Heightened Standards across the organization, including ensuring an effective 

risk management program; (2) management’s lack of transparency with the board and with 

the OCC; and (3) a management team that lacked responsiveness in addressing issues. As 

Chief Risk Officer, Michael Loughlin was directly responsible for the bank’s failure to ensure 

an effective risk management program, a major factor in the downgrade.271 The Chair of the 

Company’s Risk Committee, Karen Peetz, identified similar issues with Loughlin. 272 OCC

staff first communicated concerns about Loughlin to the Bank in June of 2017,273 but the 

Bank did not replace him until a year later, in June of 2018, when Amanda Norton assumed 

the role of Chief Risk Officer.274 During an interview with Committee staff, OCC staff 

described the Bank’s efforts to replace Loughlin as too slow.275 

On July 24, 2018, OCC staff attended a meeting of Wells Fargo’s board to discuss 

Wells Fargo’s progress toward addressing a number of regulatory issues, including the OCC’s 

open consent orders and supervisory letters.276 Meeting minutes produced by Wells Fargo 

reflect that, among other issues, OCC’s Senior Deputy Comptroller for Large Bank 

Supervision emphasized that Wells Fargo needed “to examine its approach in remediating 

customers, including the importance of keeping the interests of customers top of mind and 

taking a broad view when remedying customer harm.”277 OCC staff also raised concerns 

about the board’s oversight of Wells Fargo’s management. According to the meeting minutes, 

a senior OCC official discussed “the importance of performance management, succession 

planning, and holding senior management accountable” (emphasis added).278 This 

point was echoed by another OCC official who stressed that “escalation, transparency, 

and accountability remain critical areas of focus” (emphasis added).279 In discussing 

the OCC’s concerns, Duke pointed to board initiatives focused on holding management 

accountable, “including through the introduction of performance objectives relating to risk 

management.”280

The board, however, appears to have been unable to follow through on Duke’s 

professed commitment to accountability. From at least mid-2018 through Sloan’s resignation 

in March 2019, concerns about Sloan’s performance were repeatedly raised by and to Wells 

Fargo’s board members. For example, in May 2018, after the Federal Reserve rejected Wells 

Fargo’s first submissions under the 2018 order as “materially incomplete,” WFC board 

271 Interview with OCC staff (Feb.4, 2020). 

272 Interview of Karen Peetz (Jan. 31, 2020).

273 Interview with OCC staff (Feb.4, 2020). 

274 WFC, Corporate Biography of Amanda Norton (online at

https://www.wellsfargo.com/about/corporate/governance/norton/) (accessed Feb. 19, 2020). 

275 Interview with OCC staff (Feb.4, 2020). 

276 Minutes of the Regular Meetings of the Boards of Directors of Wells Fargo & Company and Wells

Fargo Bank, National Association, WF-HFSC-00036359-84 (July 23-24, 2018) (on file with the House

Committee on Financial Services).

277 Id. at WF-HFSC-000036361. 

278 Id. at WF-HFSC-000036362. 

279 Id. at WF-HFSC-000036379.

280 Id. at WF-HFSC-000036361. 
57

member Ted Craver wrote to Duke to express concern about Sloan’s performance and how 

the public would react if it knew of the Federal Reserve’s feedback: 

Speaking frankly, this was a big miss that doesn’t reflect well on Tim.

It would seem that there is little under the very important category of "clean up 

the mess" that is bigger than this recent submission to the Fed.

We shouldn’t have to take a Mulligan. I imagine that investors and 

customers would view this feedback from the Fed as completely 

unacceptable. I would expect to hear from them something along the lines of, 

‘is there anything you can get right?’ (emphasis added).281

Additionally, the OCC repeatedly admonished Wells Fargo’s board and Sloan to hold 

individuals accountable for the Company’s regulatory failures. Around August 11, 2018, WFC 

board chair Betsy Duke, Bank board chair of Wells Fargo Bank’s board James Quigley, CEO 

Tim Sloan, and Wells Fargo’s head of regulatory relations, attended a meeting with OCC

staff and Comptroller Otting.282 An August 11, 2018 email from Duke to board members 

summarizing the meeting revealed that the OCC raised the issue of the Bank “not holding 

people accountable.”283 

Despite concerns about Sloan’s leadership of Wells Fargo raised by and to multiple 

board members in 2018, the board decided to award Sloan a bonus of $2 million for his 

performance in 2018. In a March 3, 2019 email to Sloan, Duke—apparently sensing that the 

281 Id.

282 See Appendix 12: Email from Betsy Duke, Chair of the Board of Directors, WFC, WFBOD-HFSC00021759 -60 (Aug. 11, 2018).

283 Id. 

SPEAKING FRANKLY, THIS WAS A BIG MISS THAT DOESN’T 

REFLECT WELL ON TIM... I IMAGINE THAT INVESTORS AND 

CUSTOMERS WOULD VIEW THIS FEEDBACK FROM THE FED AS 

COMPLETELY UNACCEPTABLE. I WOULD EXPECT TO HEAR 

FROM THEM SOMETHING ALONG THE LINES OF, ‘IS THERE 

ANYTHING YOU CAN GET RIGHT?”

- TED CRAVER

WELLS FARGO BOARD MEMBER
58

board’s decision to award Sloan a bonus would receive public criticism—wrote: “I think the 

way we set up our discussion of your compensation in the proxy and accompanying press 

materials will be critical to how it is covered in the early press and therefore investor and 

proxy firm predispositions.”284

Duke included in her email the following draft proxy statement related to Sloan’s 

compensation: 

In recognition of the substantial amount of work remaining to meet the 

expectations outlined in the OCC and CFPB Sales Practices Consent Orders, 

the OCC and CFPB Compliance Consent Order and the Fed Board Effectiveness 

and Risk Management Consent Order, the board added a vesting condition 

requiring acceptable progress under the orders to the performance shares issued

in 2019. As a reminder, the company’s pay structure is weighted so that 75-85% 

of annual compensation is in the form of performance shares. In 2018, the board 

added a vesting condition tied to total shareholder concern to address investor 

feedback.

The board decided to award Tim a cash bonus for 2018 as recognition of 

substantial progress in changing the culture and business practices of WF and 

of building out a strong management team to focus on remaining work to 

strengthen compliance and operational risk (emphasis added).285

In reply, Sloan, again demonstrating his obsession with the Federal Reserve’s asset cap, 

recommended removing language in the first paragraph of the draft relating to the work 

remaining under the various consent orders:

Two suggestions. I would delete the word ‘substantial’ below as 

stakeholders could jump to the conclusion it means we are not close to 

lifting of the asset cap and it may give regulators even more confidence in 

criticizing us. Second, I would not list all of the orders but rather focus on a 

general regulatory matters phrasing (emphasis added).286

Duke agreed, writing in reply: “I think you are right. Probably better to tone down the actual 

disclosures and use conversations with reporters and opinion formers to point to the condition 

in the equity as a new (and effective!) approach.”287 

On March 13, 2019, the day Wells Fargo announced Sloan’s compensation in its 

annual proxy statement and one day after Sloan’s testimony before the Committee, OCC staff 

met with the Bank’s board of directors. According to records of the meeting, Sloan also 

attended, but left part way through, at which time the OCC held an executive session that 

included at least Quigley, Duke, and Peetz (who joined by phone). OCC talking points from 

284 See Appendix 13: Email between Betsy Duke and Tim Sloan, et al., WF-HFSC-000063474-75 at 

75 (Mar. 3, 2019). 

285 Id.

286 Id. 287 Id. 
59

the executive session portion of the meeting included the statement that “[w]e are also 

concerned that the Board has not held management appropriately accountable and driven 

more change . . . Tim [Sloan] has been reluctant to make the necessary changes and 

he has very clearly been reluctant to hold senior executives accountable” (emphasis 

added).288 The OCC’s talking points emphasized the lack of accountability at the Bank: 

Finally, efforts to hold people accountable are too slow and often questionable 

in approach. There are many examples here where Tim has failed to show the 

leadership necessary to move the institution forward when it is clear that there 

are significant problems. We’ve seen this in compliance, in risk . . . to name a 

few areas where the unwillingness to hold people accountable has been very 

costly to the institution in terms of both money and time lost and pose serious 

reputation and safety and soundness risks to the bank if they remain 

uncorrected.289

Despite the OCC’s concerns, the agency did not appear determined to use its authority to 

remove Sloan. Peetz’ notes reflect that, while Sloan was still in attendance, OCC staff 

expressed that, “[t]hey were not exercising their discretion to remove [Sloan] or any members 

of the Board.”290

Other call notes produced by 

Peetz reveal a March 15, 2019 

meeting between Peetz and a senior 

Federal Reserve official, during 

which the senior Federal Reserve 

official inquired about the March 13, 

2019 meeting between the OCC and 

Wells Fargo’s board.291 According to 

Peetz’ notes, the senior official 

“asked me if it was clear that the 

OCC is shortening the runway for 

[Sloan’s] succession.”292 Peetz’ notes 

reflect that the senior Federal 

Reserve official asked a version of 

this question three times during the 

call.293 Peetz responded that the 

288 OCC WFBNA Board Meeting - Talking Points, OCC-HFSC-WF_2019_00039641-46 at 42-43 (Mar. 

13, 2019) (on file with the House Financial Services Committee).

289 Id. 

290 Notes of K. Peetz from March 13, 2019 meeting between Wells Fargo board members and OCC 

staff, WFBOD-HFSC-00025027-31.

291 Notes of K. Peetz from March 15, 2019 call with Federal Reserve official, WFBOD-HFSC00025084 - 85.

292 Id. at 85.

293 Id.

TIM [SLOAN] HAS BEEN RELUCTANT 

TO MAKE THE NECESSARY CHANGES 

AND HE HAS VERY CLEARLY BEEN 

RELUCTANT TO HOLD SENIOR 

EXECUTIVES ACCOUNTABLE.

- OCC
60

OCC’s message was clear to her.294 In an interview with Committee staff, Peetz stated that 

she was surprised to hear such comments from a senior Federal Reserve official.295 She 

explained that she immediately informed Duke of the meeting, who asked her to relay the 

exchange “word-for-word” to the full board.296 Peetz further explained during an interview 

with Committee staff that the board met to discuss regulators’ feedback about Sloan and 

what steps to take on or about March 19.297 

According to an internal email produced by the OCC, OCC staff met with Sloan on 

March 20, 2019, to discuss “the OCC[‘s] view on the lack of progress and failure to hold people 

accountable.”298 During the meeting, OCC staff raised the concerns outlined in the talking 

points for the OCC’s March 13, 2019 meeting with the Bank’s board members, including the 

OCC’s dissatisfaction with Sloan’s performance as CEO.299

On March 26, 2019, Mr. Sloan announced his resignation from the Company amidst

highly publicized criticism from lawmakers and regulators regarding his performance as 

Wells Fargo’s CEO.300 In a conference call with analysts on March 28, 2019, Sloan expressed 

that stepping down was his decision because the increased focus on him had “become a 

distraction.”301 He further stated that his resignation was, “[his] decision and is not related 

to [Wells Fargo’s] first quarter financial performance, the long-term outlook for the company 

or any newly discovered issues.”302 Notwithstanding the performance concerns that had been 

raised to her, including by other board members, Duke told analysts during the call, “Tim 

has had the full support of the board throughout his tenure as CEO.”303 

Even after Mr. Sloan’s resignation as CEO in March 2019, failure to hold senior 

management accountable remained a concern for the OCC. A September 9, 2019 OCC 

quarterly management report reiterated the message the OCC had presented to the board 

and senior management in July of that year: “When you are unable to meet your 

commitments, understand why and address the root cause. That includes holding people 

accountable” (emphasis added).304

294 Id.

295 Interview with K. Peetz (Jan. 31, 2020).

296 Id.

297 Id. 

298 Email between OCC staff, OCC-HFSC-WF-2019-00039961 (Mar. 20, 2019) (on file with the House

Committee on Financial Services). 

299 Id.

300 SEC, Form 8-K for Wells Fargo & Company (Mar. 26, 2019), 

https://www.sec.gov/Archives/edgar/data/72971/000119312519090633/d727180d8k.htm.

301 WFC, Conference Call with Analysts (March 28, 2019) – Transcript, available at

https://www08.wellsfargomedia.com/assets/pdf/about/investorrelations/presentations/2019/conference-call-transcript.pdf. 

302 Id.

303 Id.

304 OCC Quarterly Management Report, OCC-HFSC-WF_2019_00038447-71 (Sept. 9, 2019) (on file

with the House Financial Services Committee).
61

G. Sloan Gave Inaccurate and Misleading Testimony About Wells

Fargo’s Progress During the March 12, 2019 Committee Hearing

During the March 12, 2019 Committee hearing, in response to a question from 

Chairwoman Waters regarding Wells Fargo’s submission plans pursuant to the 2018 Unfair 

Practices Consent Orders, Mr. Sloan, testified that Wells Fargo was “in compliance”:

Chairwoman WATERS. Wells Fargo’s 2018 10-K reports show that, in 

accordance with the Consumer Bureau’s and the OCC’s April 2018 auto 

insurance and mortgage rate lock consent orders, the bank submitted to the 

regulators an enterprise-wide compliance plan, a plan to enhance the bank’s 

internal audit program, and plans to remediate customers affected by these 

matters. According to the consent orders, the required plans are subject to the 

Consumer Bureau’s and the OCC’s review and determination of non-objection. 

Has the OCC indicated its non-objection to the bank’s compliance[,] 

audit[,] o[r] customer remediation plans? Has the Consumer Bureau 

indicated its non-objection?

Mr. SLOAN. Madam Chairwoman, I can’t respond specifically to your question, 

because that would mean that I would be disclosing confidential supervisory 

information that has been shared with us by both the OCC and the CFPB. But 

I can assure you that we are working very constructively with what we have in 

place and we are executing that plan that reflects the fundamental changes that 

I have made since I have become the CEO.

Chairwoman WATERS. Thank you very much.

For those who are listening, I am simply asking whether or not the bank 

is in compliance, based on reviews that are done by the OCC and the 

Consumer Bureau, and you heard that answer— 

Mr. SLOAN. We are in compliance with those plans. Excuse me. (emphasis 

added)305

On March 13, 2019, the day after the hearing, OCC staff shared copies of the hearing 

transcript and questioned the accuracy of Sloan’s testimony that the Bank was “in compliance 

with” the provisions of the 2018 Compliance Risk Management Consent Order relating to 

customer remediation plans.306 In an internal email to OCC staff, a senior OCC official wrote, 

“the initial questions were around the auto remediation plans. [Sloan] said they are in 

305 House Financial Services Committee, Hearing on Holding Megabanks Accountable: An

Examination of Wells Fargo's Pattern of Consumer Abuses, 116th Cong at 6-7 (Mar. 12, 2019) (Serial 

No. 116-7), available at https://www.govinfo.gov/content/pkg/CHRG-116hhrg36462/pdf/

CHRG-116hhrg36462.pdf.

306 Email between OCC Senior Deputy Comptroller of Large Bank Supervision and Staff, OCCHFSC-WF-2019-00039888-940 at 888 (Mar. 13, 2019) (on file with the House Financial Services

Committee). 
62

compliance. Have we told them they are in compliance?”307 In reply, OCC staff stated that 

Wells Fargo was not in compliance with one of two portions of their remediation plans and 

was still working to address issues.308 An OCC senior official concluded in response that this 

meant Sloan gave inaccurate testimony to the Committee. The OCC staff member confirmed 

that Sloan’s testimony was inaccurate and pointed to language in the OCC’s November 21, 

2018 letter stating, “The OCC is unable to provide a no supervisory objection to the portion 

of the CPI Remediation Plan specific to Wells Fargo Auto Finance (WFAF) because the plan 

is not adequately supported.”309

H. The Potential for Widespread Consumer Abuse at Wells Fargo

Remains

1. Wells Fargo has yet to submit fully satisfactory plans to address the

governance and risk management weaknesses identified by the Federal

Reserve.

In its March 11, 2019 letter, the Federal Reserve instructed Wells Fargo to respond 

within 90 days of the letter with an estimated timeline for submitting complete, revised plans

that have undergone internal review consistent with the expectations laid out in the letter.

On June 10, 2019, precisely 90 days later, Chair Duke and Wells Fargo’s Interim CEO, 

Allen Parker, sent a letter to Federal Reserve staff stating that Wells Fargo will resubmit 

the plans required under the 2018 Federal Reserve Consent Order by April 30, 2020.310 To 

date, Wells Fargo has not submitted this set of revised plans. 

2. In 2019, Wells Fargo’s risk management infrastructure remained

dangerously broken.

Wells Fargo’s own executives questioned the Company’s ability to manage risks and 

protect consumers. For example, in May 2019, Federal Reserve staff met with a senior 

compliance executive at Wells Fargo, and discussed, among other things, the Company’s 

challenges with putting its compliance plans into action.311 According to meeting notes 

produced by the Federal Reserve, the Wells Fargo executive expressed to Federal Reserve 

staff that, “if he were CEO, he would not allow the addition of any new customers to 

the company since the firm is operating in this environment” (emphasis added).312

3. The Bank continues to engage in consumer abuses.

307 Id. at 888. 308 Id. 

309 Id.

310 Letter from Elizabeth Duke, Chair of the Board of Directors, WFC, and C. Allen Parker, Interim 

Chief Executive Officer and President, WFC to Federal Reserve, FRB_HFSC-00029138 (June 10, 

2019) (on file with the House Financial Services Committee).

311 Federal Reserve Meeting Notes, FRB_HFSC-00021675-79 (May 2019) (on file with the House 

Financial Services Committee). 

312 Id. FRB_HFSC-00021678). 
63

More than four years after the revelation that Wells Fargo opened millions of 

fraudulent accounts, the Committee staff’s investigation reveals that the Bank continues to 

engage in consumer abuses. Under the criteria in Article VIII of the 2018 OCC Consent Order 

and Paragraph 53 of the 2018 CFPB Consent Order, the OCC or CFPB can require the Bank 

to submit a remediation plan if the number of consumers or customer accounts requiring 

remediation for a consumer abuse exceeds 50,000 or the amount of anticipated remediation 

to consumers exceeds $10 million.313 A January 2, 2019 letter from the CFPB to Sloan 

referred to one remediation plan already submitted pursuant to Paragraph 53 and requested 

the submission of four additional remediation plans for matters that met the threshold.314

The OCC’s September 9, 2019 quarterly management report revealed that “[t]here are 

currently [dozens of] remediations that meet the criteria of Article VIII of the 

Compliance Consent Order” (emphasis added).315 Accordingly, the Bank could have 

engaged in practices that could have harmed untold numbers of consumers. 

The Bank has also demonstrated an 

inability to effectively remediate 

consumers when abuses occur. On 

November 21, 2017, the Bank announced 

the creation of the Commitment to 

Customer Center of Excellence to 

centralize responsibility for consumer 

remediation into one office.316 However, a 

year later, the OCC in its December 7, 2018 

quarterly management report emphasized 

that the Bank’s “Remediation Program is 

critical to the organization, as the current 

approach to remediation is inefficient, 

inconsistent, often lacks appropriate 

accountability, and takes far too long.”317 

313 CFPB Consent Order, In the Matter of Wells Fargo Bank, N.A., 2018-BCFP-0001 at Article VIII 

(Apr. 20, 2018), available at https://files.consumerfinance.gov/f/documents/cfpb_wells-fargo-bankna_consent-order_2018-04.pdf; OCC Consent Order, In the Matter of Wells Fargo Bank, N.A. Sioux 

Falls, South Dakota, AA-EC-2018-15 at ¶53 (Apr. 20, 2018), available at 

https://www.occ.gov/static/enforcement-actions/ea2018-025.pdf. 314 Letter from CFPB Regional Director to Tim Sloan, Chief Executive Officer, WFC, WF-HFSC000102157-58 (Jan. 2, 2019) (on file with the House Financial Services Committee). 315 OCC Quarterly Management Report, OCC-HFSC-WF_2019_00038447-71 at 461 (Sept. 9, 2019) 

(on file with the House Financial Services Committee).

316 Wells Fargo, Wells Fargo creates Commitment to Customer team to lead consumer issues, 

remediation efforts (Nov. 29, 2017), available at https://stories.wf.com/wells-fargo-createscommitment-customers-team-lead-consumer-issues-remediation-efforts/. 317 OCC Quarterly Management Report, OCC-HFSC-WF_2019_00002595-620 at 598 (Dec. 7, 2018) 

(on file with the House Financial Services Committee).

[T]he current approach to

remediation is inefficient,

inconsistent, often lacks

appropriate accountability, and 

takes far too long.

- OCC
64

The OCC’s July 16, 2019 report of examination on the Bank noted that:

The OCC had challenges with the work of the Commitment to Customer Center 

of Excellence this year. The OCC has not observed a drive towards greater 

consistency and a large number of plans had to be resubmitted 

multiple times. Overall, the OCC remains concerned about the 

overarching vision around remediation. We have understood the general 

premise of remediations to be that if the bank has made an error that caused 

harm to a customer, such harm will be remediated. However, OCC examiners 

are increasingly hearing discussions of whether an issue meets the internal 

definition of a remediation, without consideration of possible harm. That focus, 

on the definition in the absence of consideration of customer harm, will not be 

helpful to the bank's efforts to restore its reputation (emphasis added).318

Furthermore, the OCC’s September 9, 2019 quarterly management report asserted 

that “remediation efforts remains [sic] a concern. The OCC has not observed a 

drive towards greater consistency and many plans have been resubmitted 

multiple times or extended” (emphasis added).319 Consistent with the supervisory 

reports, the OCC staff articulated that the Bank lacked a uniform approach to 

compensating harmed consumers and described the Bank’s remediation efforts as “adhoc.”320 The CFPB’s Western regional director noted that the Bank’s remediation plans 

submitted in response to Paragraph 53 failed to capture all consumers.321 Wells Fargo’s 

lack of an effective remediation program compounds the harm to its customers from its 

continued compliance breakdowns.

4. The regulators continue to express dissatisfaction with the Bank’s

progress.

The Committee staff’s investigation reveals that the Bank’s regulators continue to 

express dissatisfaction with the Bank’s progress in addressing its regulatory failures. OCC 

staff wrote in a February 15, 2019 email to the chair of the Company’s board that, “[t]he OCC 

is deeply concerned about the continuing (and in some cases worsening) problems in a 

number of areas, evidenced by large number of extension requests, missed expected 

completion dates that are not communicated in a timely manner, failed audit validations, 

and extensions of Consent Order deadlines.”322 OCC talking points for a March 13, 2019 

meeting with the Bank’s board included: 

318 OCC Report of Examination, OCC-HFSC-WF_2019_00008480-852 at 843 (Jul. 16, 2019) (on file 

with the House Financial Services Committee).

319 OCC Quarterly Management Report, OCC-HFSC-WF_2019_00038447-71 at 61 (Sept. 9, 2019) (on 

file with the House Financial Services Committee).

320 Interview with OCC staff (Feb. 4, 2020).

321 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020).

322 Email from OCC staff to Betsy Duke, Chair of the Board of Directors, OCC-HFSC-WF_2019-

00039260-66 at 61 (Feb. 15, 2019) (on file with the House Financial Services Committee).
65

The institution that we see today is not stronger than the one that 

emerged from the Sales Practices mess in 2016. Financially the Bank 

remains solid. But in many risk dimensions, the lack of progress in the controls 

environment and the lack of sufficient investment in technology across the 

enterprise over the long term have wasted time and weakened the institution, 

creating further safety and soundness concerns (emphasis added).323 

The OCC’s most recent July 2019 report of examination324 concluded that “[a] review of the 

status of the existing Enforcement Actions (EAs) . . . reveal[s] minimal change from last year, 

with all elements continuing at unacceptably high levels.”325 The July 2019 Examination 

Report also noted that despite the OCC repeatedly apprising the Bank’s management and 

board of its lack of progress, “[i]t is deeply concerning that Board and management 

were unable to address these concerns with the appropriate resources, escalation, 

and urgency” (emphasis added).326 

The most recent OCC quarterly 

management report dated December 

19, 2019 found that the Bank’s 

“progress continues to lag expectations 

on . . . EAs.”327 The OCC made this 

same comment in its prior quarterly 

management report.328 The Bank 

estimates that it will not achieve full 

compliance with the 2016 OCC Sales 

Practice Order until September 30, 

2021, and has not provided an 

estimated date for when it will be fully 

compliant with the 2018 OCC order.329

The Bank also has not satisfied 

all of its obligations under the 2016 

and 2018 CFPB Consent Orders as of 

January 30, 2020.330 On April 12, 2019, 

323 OCC WFBNA Board Meeting -Talking Points, OCC-HFSC-WF_2019_00039641-46 at 42-43 (Mar. 

13, 2019) (on file with the House Financial Services Committee).

324 The OCC issues an annual Report of Examination to Wells Fargo Bank. 

325 OCC Report of Examination, OCC-HFSC-WF_2019_00008480-532 (Jul. 16, 2019) (on file with the 

House Financial Services Committee). 

326 Id. 327 OCC Quarterly Management Report (Dec. 19, 2019) (on file with the House Financial Services 

Committee). 

328 OCC Quarterly Management Report, OCC-HFSC-WF_2019_00038447-71 (Sept. 9, 2019) (on file 

with the House Financial Services Committee).

329 OCC Quarterly Management Report (Dec. 19, 2019) (on file with the House Financial Services 

Committee).

330 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020).

[I]T IS DEEPLY CONCERNING THAT

BOARD AND MANAGEMENT WERE

UNABLE TO ADDRESS THESE 

CONCERNS WITH THE 

APPROPRIATE RESOURCES, 

ESCALATION, AND URGENCY.

- OCC
66

the CFPB wrote to Wells Fargo to correct the Bank’s erroneous assertion in a prior 

correspondence that the CFPB had approved certain plans required by the 2018 CFPB 

Consent Order.331 In addition to the 2016 and 2018 Compliance Consent Orders, Wells Fargo 

had over 215 open issues resulting from the CFPB’s twenty-eight supervisory reviews as of 

February 28, 2019 according to a document created by the Bank.332 The Bank had only 

resolved all the issues related to two of the supervisory reviews.333 The CFPB’s Western 

regional director communicated that she has not witnessed a noticeable improvement in the 

Bank’s ability to address their its regulatory issues and does not believe the Bank has 

established a satisfactory compliance program.334 

5. Wells Fargo’s employees continue to express concerns about the

Company’s culture.

Since 2017, evidence of a toxic culture adversely affecting bank employees has 

persisted. Last year, four bank employees met with senior Federal Reserve officials asserting 

that little had changed with the Bank’s culture since the Bank’s misconduct had first come 

to light.335 Furthermore, according to a New York Times investigation, Wells Fargo employees 

in a Des Moines debt collection office were expected to handle 33 calls an hour and recover 

$40,000 in unpaid credit-card and other debts in a single month.336 Mortgage-processing 

employees in Minneapolis were allegedly pressured by management to knowingly send 

documents with inaccurate information to meet internal deadlines.337 An employee in the Des 

Moines office told the newspaper, “[f]or us front-line workers, there’s an overwhelming sense 

of frustration . . . . [and] a general fear of retaliation for speaking out.”338 A bank employee 

in Minneapolis said, “[t]here’s a sense among the workers that most of the reforms the Bank 

has made are very superficial and only being done for [public relations] reasons.”339

V. Policy Recommendations

In consideration of Committee staff’s findings and prior legislative proposals of 

Committee members, including Chairwoman Waters’ Megabank Accountability and 

Consequences Act of 2017,340 below are a series of policy recommendations intended to 

331 Letter from CFPB Regional Director to Wells Fargo, HFSC_CFPB_041019_00001548-49 (Apr. 12, 

2019) (on file with the House Financial Services Committee).

332 CFPB Back Book and Look Forward, HFSC_CFPB_041019_00009282-84 (Feb.28, 2019) (on file 

with the House Financial Services Committee). 333 Id. 334 Interview with CFPB Regional Director for the Western Region (Jan. 30, 2020).

335 See, e.g., Imani Moise and Pete Schroeder, How Wells Fargo's regulators and employees drove out 

its CEO, Reuters (Apr. 9, 2019), available at https://www.reuters.com/article/us-wells-fargo-fedinsight/how-wells-fargos-regulators-and-employees-drove-out-its-ceo-idUSKCN1RL0EA. 336 Emily Flitter and Stacy Cowley, Wells Fargo Says Its Culture Has Changed. Some Employees 

Disagree, The New York Times (Mar. 9, 2019), available at

https://www.nytimes.com/2019/03/09/business/wells-fargo-sales-culture.html. 337 Id. 338 Id. 339 Id. 340 H.R.3937, 115th Congress, available at: https://www.congress.gov/115/bills/hr3937/BILLS115hr3937ih.pdf. Also see House Committee on Financial Services, Waters Introduces 
67

enhance accountability in the banking industry, promote transparency and market 

discipline, strengthen consumer protections, and empower responsible workers: 

1. Congress should compel regulators to act against recidivist

megabanks, like Wells Fargo, that engage in widespread consumer abuses.

The regulators repeatedly expressed their dissatisfaction with Wells Fargo’s

progress towards remediating its regulatory issues for years, but have been slow and 

reluctant to impose additional penalties available to them under existing law.341 Beyond a 

list of monetary penalties assessed by the regulators,342 the Federal Reserve decided to cap 

the asset growth of the Company on the last day of Chair Janet Yellen’s time in office, and 

in January 2020, the OCC took action to prohibit a few former executives from working in 

the banking industry.343 However, as this report demonstrates, these actions come after 

many years of continued non-compliance by the Company and after the Committee 

announced and convened public hearings, and there remain stronger penalties available to 

prudential regulators. 

The Committee staff also noted that regulators often engaged the Bank and 

Company just prior to and after Committee action. For example, one day before Sloan’s 

testimony before the Committee, the Federal Reserve rejected the Company’s second 

submission made in response the 2018 Federal Reserve Consent Order. Committee staff 

conclude that the regulators appear unwilling or unable to exercise their more severe 

authorities in their normal course of supervision. The time has come for Congress to compel 

regulators to be more aggressive with regard to megabanks like Wells Fargo in using the 

supervisory tools and sanctions available to them. 

Congress should consider legislation mandating that regulators immediately direct a 

recidivist megabank like Wells Fargo to remove complacent and ineffective directors and 

bar them from working at another bank, and compel regulators to either (a) downsize Wells 

Groundbreaking Legislation to Shut Down Abusive Megabanks Like Wells Fargo (Oct. 4, 2017), 

available at: https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=400815. 341 In a previous report, Committee staff outlined the tools currently available to various federal 

regulators. For example, the CFPB can impose civil money penalties and issue consent orders, under 

which restitution, refunds, rescission or reformation of contracts, or claw-back of compensation is 

required. However, prudential regulators can take additional actions, such as restricting a bank’s 

growth, restricting a bank’s line of business, or revoking the bank’s charter. See Democratic Staff, 

House Committee on Financial Services, The Case for Holding Megabanks Accountable: An 

Examination of Wells Fargo’s Egregious Consumer Abuses (Sept. 27, 2017), available at

https://financialservices.house.gov/uploadedfiles/09.29.17_staff_report_final.pdf. 342 Most recently, Wells Fargo entered into an agreement with DOJ and SEC to pay $3 billion to 

resolve criminal and civil investigations related to the bank’s fraudulent sales practices. See DOJ, 

Wells Fargo Agrees to Pay $3 Billion to Resolve Criminal and Civil Investigations into Sales Practices 

Involving the Opening of Millions of Accounts without Customer Authorization (Feb. 21, 2020), 

available at https://www.justice.gov/opa/pr/wells-fargo-agrees-pay-3-billion-resolve-criminal-andcivil-investigations-sales-practices. 343 OCC, OCC Issues Notice of Charges Against Five Former Senior Wells Fargo Bank Executives, 

Announces Settlement With Others (Jan. 23, 2020), available at https://www.occ.gov/newsissuances/news-releases/2020/nr-occ-2020-6.html.
68

Fargo by reducing the current total asset cap, imposing asset caps on specific lines of 

business, requiring the disposition of certain business lines and/or prohibiting new business 

lines or products, or (b) wind down the bank in an orderly fashion by revoking the bank’s 

national charter, terminating the bank’s deposit insurance, and appointing a receiver to 

dispose of various components of the bank’s business to smaller, well-managed banks.344 

Congress should also consider legislation that would require publicly disclosed 

remediation for all identified consumer abuses by Wells Fargo and other megabanks 

affecting more than 50,000 consumers or consumer accounts, or where the amount of 

anticipated consumer remediation exceeds $10 million.

In addition, Congress should consider establishing a new legal framework that 

would compel recalcitrant regulators to utilize their most severe authorities to address any 

future recidivist megabank that extensively harms consumers. Congress should direct 

prudential regulators to establish, by rule and in consultation with the CFPB, an escalating 

list of penalties for recidivist megabanks that harm consumers that are triggered after 

certain criteria is met, such as after a certain number of consumers are harmed, or if a 

timeline is not met to remediate harmed consumers subject to a consent order. One of the 

initial penalties in the list should be the automatic imposition of a total asset cap when a 

megabank engages in widespread consumer abuses and compliance breakdowns. 

While prudential regulators possess arguably the most severe corrective tools, the 

CFPB should be given a role in this process, given its primary role to protect consumers. 

This should include directing the CFPB to issue regulations to further define what 

constitutes a pattern or practice of violations of laws or regulations by megabanks that 

result in extensive consumer abuse. Another statutory trigger for more severe penalties 

should include the combined list of known violations by Wells Fargo to ensure history does 

not repeat itself. The CFPB and state and local government agencies should be able to 

publicly petition prudential regulators to take action, and request a public hearing, 

regarding a megabank found to have engaged or be engaging in a pattern or practice of 

violations resulting in considerable consumer harm. 

344 As required by §165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act

(“Dodd-Frank Act”), Wells Fargo submits a resolution plan (also referred to as a “living will”) to the

Federal Reserve and FDIC for its rapid and orderly resolution in the event of material financial 

distress or failure. This plan could be helpful in any resolution of the bank. The regulators have the

authority under the statute to deem a resolution plan to be “not credible or would not facilitate an

orderly resolution of the company under Title 11, United States Code.” While the agencies identified 

one shortcoming and noted areas in which there could be improvements made in Wells Fargo’s 2019

plan, the plan was not rejected. See Letter from Federal Reserve and FDIC to Wells Fargo &

Company (Dec. 16, 2019), available at

https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20191217a8.pdf. Also see Wells 

Fargo 2019 165(d) Plan – Public Section (Jun. 27, 2019), available at 

https://www.federalreserve.gov/supervisionreg/resolution-plans/wells-fargo-2g-20190701.pdf.
69

2. Congress should strengthen the regulators’ authorities and enhance 

bank management and board accountability. 

While prudential regulators have strong tools in their arsenal,345 Congress should 

consider refining and expanding these authorities against a recidivist megabank that 

repeatedly harms consumers, including when circumstances warrant appointing a receiver.

For example, authority to appoint a receiver to wind down a bank for violations of law or 

regulation appears presently to be tied to the financial condition of the bank,346 and could be 

clarified to also explicitly include violations that result in extensive consumer abuses. 

Whereas the FDIC is generally required to resolve a bank with the least costly

available option to the Deposit Insurance Fund, there is flexibility when resolutions would 

have serious adverse effects on economic conditions or financial stability.347 Congress should 

consider clarifying that when the FDIC is deciding between different resolution options, that 

the FDIC should consider what a resolution option’s impact may have on a bank’s employees 

and customers.

To enhance the accountability of boards and senior management, Congress should 

consider legislation that would require hold the board of directors and senior officers of 

megabanks to be more involved in oversight of their banks and be informed about supervisory 

matters identified by bank examiners, regardless of the organizational structure chosen by 

the bank. This should include a regular written attestation by senior officers and directors

that the megabank is complying with the law.348 Congress should also consider strengthening

penalties against culpable senior officers and directors and clarify that they apply when a 

bank engages in repeated or egregious violations of federal consumer protection laws. 

Additionally, while some proposals have been made to enhance supervisory expectations for 

boards of directors of large financial institutions,349 Congress should consider enhancing 

expectations for megabank board of directors, including limiting outside commitments.350

345 Id. 346 For example, the grounds for appointing a conservator or receiver for any insured depository 

institution under the Federal Deposit Insurance Act includes violations of any law or regulation, but 

those violations are conditioned on those that are “likely to (i) cause insolvency or substantial 

dissipation of assets or earnings; (ii) weaken the institution's condition; or (iii) otherwise seriously 

prejudice the interests of the institution's depositors or the deposit insurance fund.” See 12 USC § 

1821(c)(5)(H).

347 See 12 USC §1823(c).

348 The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) made such a 

proposal in its Quarterly Report to Congress (Oct. 26, 2016), available at 

https://www.sigtarp.gov/Quarterly%20Reports/October_26_2016_Report_To_Congress.pdf. 349 See Federal Reserve, Federal Reserve Board invites public comment on two proposals; corporate 

governance and rating system for large financial institutions (Aug. 3, 2017), available at 

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20170803a.htm. 350 According to a February 14, 2018, comment letter to the Federal Reserve from Jeremy Kress, 

Assistant Professor of Business Law, Stephen M. Ross School of Business, University of Michigan, 

available at https://www.federalreserve.gov/SECRS/2018/April/20180424/OP-1570/OP1570_021418_131961_287654236656_1.pdf, a number of Wells Fargo’s independent directors served 

on other corporate boards and he observed from 2012 to 2015, the Bank held fewer board meetings 
70

In light of how past mergers involving Wells Fargo may have contributed to the toxic 

sales culture identified by an internal investigation,351 Congress should consider 

strengthening the merger and acquisition review process for megabanks, such as by requiring 

CFPB’s approval if it involves an institution offering consumer financial products.352 This is 

especially important in light of the rubber-stamping prudential regulators have engaged in 

approving bank mergers and acquisitions in recent years.353

3. Congress should require greater transparency regarding bank

supervision and how banks treat consumers.

This investigation reveals a need to ensure greater transparency regarding consumer 

abuses by large banks and stronger oversight of prudential regulators. Wells Fargo, like other 

banks, receives a non-public Consumer Compliance rating as part of its exams that 

incorporates a regulator’s assessment of the Bank’s board and management oversight, 

compliance program, violations of law, and consumer harm.354 Congress should consider 

establishing a threshold for when a practice that results in significant consumer harm should 

automatically result in a public enforcement action.

Operating a federally insured bank is a privilege and not a right. Given that U.S. 

megabanks collectively hold about half of all domestic banking assets and have committed a 

than its peer banks. The letter explains the European Union adopted regulations in 2013 that limits 

outside employment for financial institution directors, and recommends the United States adopt 

meaningful restrictions on outside commitments of board directors.

351 See Independent Directors of the Board of Wells Fargo & Company, Sales Practices Investigation 

Report (Apr. 10, 2017), at 54 (“Much like his predecessor, Richard Kovacevich, Stumpf was also a 

proponent of cross-sell and product sales. Kovacevich had initiated the “GR-8” program to pursue 

cross-sell at Norwest and brought that focus to Wells Fargo, which had not measured cross-sell in a 

programmatic way before the Norwest merger. Wells Fargo’s sales-oriented culture was transferred 

to former Wachovia branches and retail bank operations following the merger with Wachovia.... 

Stumpf was aware that Wells Fargo’s focus on cross-sell, combined with aggressive sales goals and 

associated incentive compensation plans, could encourage employee ‘gaming’ and sales practice 

issues.”), available at https://www08.wellsfargomedia.com/assets/pdf/about/investorrelations/presentations/2017/board-report.pdf. 352 A proposal that includes such reforms is H.R. 5318, the Bank Merger Review Modernization Act 

of 2019, sponsored by Rep. Jesus G. “Chuy” Garcia (D-IL), available at

https://www.congress.gov/116/bills/hr5318/BILLS-116hr5318ih.pdf. 353 See Majority Staff, House Committee on Financial Services, Hearing Memorandum for The Next 

Megabank? Examining the Proposed Merger of SunTrust and BB&T (July 24, 2019), available at

https://financialservices.house.gov/uploadedfiles/hhrg-116-ba00-20190724-sd002_-_memo.pdf. 354 See OCC, Comptroller’s Handbook – Consumer Compliance – Compliance Management Systems, 

Version 1.0 (June 2018), available at https://www.occ.treas.gov/publications-andresources/publications/comptrollers-handbook/files/compliance-mgmt-systems/index-compliancemanagement-systems.html. See also Federal Financial Institutions Examinations Council (FFIEC), 

FFIEC Issues Uniform Interagency Consumer Compliance Rating System (Nov. 7, 2016), available at

https://www.ffiec.gov/press/pr110716.htm. 
71

long list of violations in recent years,355 Congress should consider enhancing public reporting 

obligations for megabanks regarding their activities.356

Under the terms of the 2018 Compliance Consent Orders, the OCC and the CFPB can 

require the Bank to submit remediation plans if the number of consumer accounts impacted 

is more than 50,000 or the estimated amount of remediation exceeds $10 million. A 

September 19, 2019 supervisory report from the OCC indicated the existence of [dozens of]

remediations potentially satisfying these criteria, none of which appear to be the subject of a 

current public enforcement action. Congress should consider requiring the Consumer 

Compliance rating and key findings for large banks be made public, similar to how 

Community Reinvestment Act exams and ratings are made public, to better inform 

consumers about how a bank treats its customers.

Congress should also consider requiring the public disclosure, perhaps after a specific 

period of time,357 of exam ratings provided to megabanks through various rating systems, 

such as CAMELS for banks and LFI and RFI ratings for bank holding companies. the 

Uniform Financial Institutions Rating System. Under the system, banks receive a rating on

six CAMELS components – capital, asset quality, management, earnings, liquidity and 

sensitivity to market risk – and a composite rating. There are other exam systems that apply 

to bank holding companies, such as the Federal Reserve’s RFI rating system that examines 

risk management, financial condition, and the impact of nonbanking activities, or the Federal 

Reserve’s new large financial institution (LFI) rating system.358 Making these ratings 

transparent, particularly those regarding the adequacy of a bank’s management, will help 

Congress hold regulators accountable for the quality of their bank supervision and promote 

market discipline.359

355 See Committee hearing: House Committee on Financial Services, Holding Megabanks 

Accountable: A Review of Global Systemically Important Banks 10 years after the Financial Crisis

(Apr. 10, 2019), available at

https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=402507. 356 One proposal along these lines is H.R. 4966, the Greater Supervision In Banking Act (“G-SIB 

Act”), sponsored by Rep. Ayanna Pressley (D-MA), which would require megabanks to provide 

annual testimony to Congress by their CEOs and an annual public report, including information 

about their size and complexity and enforcement actions taken against the bank over the past year.

See H.R.4966, the GSIB Act of 2019, available at https://www.congress.gov/116/bills/hr4966/BILLS116hr4966ih.pdf. 357 One example in statute of delayed reporting of sensitive bank information can be found in 

§1103(b) of the Dodd-Frank Act, which requires the Federal Reserve to disclose loans through the 

discount window on a delay of about two years, though it can be disclosed earlier if such disclosure 

would be in the public interest and would not harm the effectiveness or purpose of the loan. 

358 Federal Reserve, Federal Reserve Board finalizes new supervisory rating system for large financial 

institutions (Nov. 2, 2018), available at

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20181102a.htm. 359 For example, see Aaron Klein, Why bank regulators should make their secret ratings public, 

Brookings (Feb. 27, 2020), available at https://www.brookings.edu/research/why-bank-regulatorsshould-make-their-secret-ratings-public/; and Karen Petrou, Make Camels Ratings Public Already, 

American Banker (May 17, 2016), available at https://www.americanbanker.com/opinion/makecamels-ratings-public-already.
72

The regulators are not required to disclose, even on an anonymous basis, the types of 

ongoing consumer abuse this investigation uncovered at Wells Fargo. Congress should 

consider requiring a form of the CFPB’s supervisory highlights for all prudential regulators 

specifically focused on large banks, as well as regular testimony by prudential regulators.360

Further, to help ensure a professional approach to enforcement, Congress should consider 

limiting the use of political appointees at independent regulatory agencies, as they have been 

utilized by Trump Administration appointees at the CFPB.361

360 On January 13, 2020, the House passed by voice vote H.R. 4841, the Prudential Regulators 

Oversight Act, a bipartisan bill sponsored by Rep. Dean Phillips (D-MN), which would require 

semiannual reports to Congress and annual testimony from the OCC, FDIC, Federal Reserve, and 

National Credit Union Administration (NCUA) on their regulatory and supervisory activities, 

including “supervisory observations by the regulator on particular areas and topics of concern 

identified through the examination and supervisory process.” See H.R. 4841, 116th Congress at §2, 

available at https://www.congress.gov/116/bills/hr4841/BILLS-116hr4841rfs.pdf. The bill is pending 

in the Senate. 

361 On May 22, 2019, the House passed H.R. the Consumers First Act, a bill sponsored by 

Chairwoman Waters, which would, among other things, limit the use of political appointees by the 

CFPB to bring it in line with how other independent financial regulators are staffed. See H.R. 1500, 

116th Congress at §5(c), available at https://www.congress.gov/116/bills/hr1500/BILLS116hr1500rfs.pdf. The bill is pending in the Senate.
73

4. Congress should enhance bank compensation practices.

Bank compensation practices warrant scrutiny and improvements.362 In 2017 and 

2018, Wells Fargo had a ratio of CEO to median worker pay of 291 to 1 and 283 to 1, 

respectively.363 Congress should consider requiring a portion of senior executive and board 

compensation be set aside in a deferment fund that would be used to pay any civil or criminal 

penalties for violations occurring during their tenure.364 Congress should also consider 

legislation to ensure every bank employee earns a living wage to meet at least their basic 

needs, including food, housing, and clothing for them and their families. Further, while the 

Dodd-Frank Act required financial regulators to issue rules regarding whether incentivebased compensation arrangements are excessive within 9 months of the law’s enactment, it 

has been more than 9 years and rules have yet to be finalized.365 Regulators should 

immediately finalize meaningful rules to implement the law’s compensation mandates.

5. Congress should pass a bank workers’ bill of rights. 

In addition to addressing compensation practices, Congress should further empower

bank workers to ensure megabanks are protecting consumers and complying with the law

through the creation of a Bank Worker Bill of Rights.366 Such a package could, among other 

things, protect workers’ rights to unionize, strengthen whistleblower protections, curb forced 

arbitration and non-disclosure agreements to encourage current and former employees to 

speak out when they witness actions that harm consumers, ensure adequate staff training 

for compliance with consumer protection laws, and incorporate feedback from a wider range 

of employees as part of the examination process.

VI. Conclusion

While much ink has been spilled about Wells Fargo’s unprecedented opening of 

millions of fraudulent accounts, little has been written about the Bank’s progress towards 

ameliorating its underlying compliance deficiencies, remediating harmed consumers, and, 

362 House Financial Services Committee, Committee Finds Megabanks Coming up Short in Closing 

the CEO-to-Worker Pay Gap (Aug. 27, 2019), available at

https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=404228. 363 See Majority Staff, House Committee on Financial Services, Hearing Memorandum for Holding 

Megabanks Accountable: A Review of Global Systemically Important Banks 10 Years After the 

Financial Crisis at 4 (April 10, 2019), available at

https://financialservices.house.gov/uploadedfiles/hhrg-116-ba00-20190410-sd003_-_memo.pdf. 364 One proposal to create a compensation deferment fund is H.R. 3885, the Wall Street Banker 

Accountability for Misconduct Act, sponsored by Rep. Tulsi Gabbard (D-HI), available at 

https://www.congress.gov/116/bills/hr3885/BILLS-116hr3885ih.pdf. 365 See §956 of Dodd-Frank Act. 366 See Kalmanovitz Initiative for Labor and the Working Poor Georgetown University, Financial 

Exploitation, Bank Workers’ Rights, and the Prevention of the Next Crisis: The Case for a Bank 

Workers’ Bill of Rights (Feb. 19, 2020), available at http://lwp.georgetown.edu/wpcontent/uploads/The-Case-for-a-Bank-Workers-Bill-of-Rights.pdf. 
74

ensuring that the Company and Bank have systems and a culture in place to ensure such 

harms never happen again. 

The Committee staff’s investigation uncovered that the Bank continues to struggle to 

implement effective risk management and remediation programs when compliance 

breakdowns occur, that Wells Fargo’s board and management repeatedly have failed to 

demonstrate that the Bank can establish a compliance management infrastructure capable 

of preventing consumer abuses, and that Wells Fargo’s leadership has been unable to change 

the Bank’s culture. 

Committee staff’s review of internal documents reveals that too often the Bank 

focused on profits and exiting the regulators’ consent orders rather than on fixing the Bank’s 

long-standing compliance management weaknesses. Rather than developing adequate plans 

in response to the 2018 Federal Reserve Consent Order, Wells Fargo’s board and senior 

management concentrated their efforts on lifting the asset cap. 

The board and senior management also resisted the regulators’ admonishment to hold 

executives accountable for the Bank’s poor performance in terms of resolving outstanding 

regulatory issues. Compounding the Bank’s missteps, the regulators did not exercise their 

full authority to compel Wells Fargo’s timely compliance with the requirements of the consent 

orders and other supervisory actions. 

Committee staff’s investigation also found that Wells Fargo’s inadequate controls 

have resulted in ongoing consumer abuses potentially affecting millions of customers. 

Moreover, the regulators have repeatedly criticized the Bank’s processes for remediating 

harmed consumers. 

The 2008 financial crisis exposed how the inability of some of the largest banks to 

manage their financial risk effectively could destabilize the economy and cause untold harm 

to millions of consumers. Committee staff’s investigation has exposed how an institution the 

size of Wells Fargo can pose a risk to the financial well-being of millions of consumers because 

of its lack of an adequate compliance management infrastructure and inability to hold itself 

accountable. 
75

VII. Appendices
APPENDIX 1 


APPENDIX 2 

APPENDIX 3 


APPENDIX 4 

APPENDIX 5 


APPENDIX 6 


APPENDIX 7 


APPENDIX 8 



APPENDIX 9 

APPENDIX 10 

APPENDIX 11 



APPENDIX 12 


APPENDIX 13