Wells Fargo may have thought that firing 5,300 employees and paying $185 million in fines for opening some 1.5 million unauthorized accounts and filing 565,000 credit card applications without customers’ knowledge would make its scandal go away, but in an election year that has seen rage over perceived Wall Street greed reflected in the campaign of Bernie Sanders and to some extent the populist rise of Donald Trump, the bank may have miscalculated.
Related: Wells Fargo Hit With $185 Million Fine for Creating Sham Accounts
Not only does the bane of big banks, Sen. Elizabeth Warren of Massachusetts, have Wells in her sights, but The Wall Street Journal said Wednesday that two U.S. Attorney’s Offices are looking into its sales tactics. In addition, CEO John Stumpf has been called to appear before the Senate Banking Committee on Tuesday, and the House Financial Services Committee on Friday opened a fraud investigation.
Of the fines Wells Fargo paid, $100 million was imposed by the Consumer Financial Protection Bureau, marking the agency’s highest levy since it began operations in 2011.
Warren, who was instrumental in creating the CFPB, was asked on Thursday if the root cause of the problem at the bank was “bigness per se.”
She told Tyler Mathisen of CNBC that there is a “serious problem with senior management at Wells Fargo. Look, we’re talking about a scandal here that involves thousands of their employees cheating tens of thousands of customers out of money and making millions of dollars doing it for the bank.”
Warren said if senior management really didn’t know what was going on “then this is a bank that’s too big to manage.”
And if senior management did know what was going on, she said, they need to be held personally responsible. “I would feel a lot better about Wells Fargo if I heard someone in a position of authority like the CEO step up and say I take responsibility and I’m not keeping my job and I’m not keeping my bonus over this.”
Related: Wells Fargo’s CEO: The Buck Stops With My Workers
The larger message of the scandal at Wells Fargo, Warren said, is that enormous structural problems remain on Wall Street, with giant financial institutions still thinking they can build profit models by cheating the American people.
By Friday, the scandal had knocked about $19 billion off the market value of the bank, but the fines were a drop in the $23 billion bucket of profits that Wells Fargo amassed last year.
Still, while the sham accounts likely would have drawn criticism of Stumpf whenever they were revealed, the political timing for Wells Fargo is particularly problematic. One of the central themes of the insurgent candidacy of Vermont Sen. Sanders, a progressive soul mate of Warren’s, as he sought the Democratic presidential nomination, was the greed of Wall Street and the need to break up the big banks. Democratic nominee Hillary Clinton, a reliable ally of the financial community when she was a New York senator, now echoes Sanders’ call for putting the banks and the Street on a tighter leash. And while it’s hard to pin down exactly where Trump stands, he and GOP leaders such as House Speaker Paul Ryan have called for a dismantling of the CFPB.