No Accountability, Ever

Carrie Tolstedt, the former Wells Fargo executive who ran the division that routinely defrauded consumers, retired to copious praise from her superiors and a huge retirement package:

Wells Fargo & Co’s “sandbagger”-in-chief is leaving the giant bank with an enormous pay day—$124.6 million.

In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.

On Thursday, Wells Fargo agreed to pay $185 million, including the largest penalty ever imposed by the Consumer Financial Protection Bureau, to settle claims that that it defrauded its customers. The bank’s shareholders will ultimately have to swallow the cost of that settlement. The bank also said it had fired 5,300 employees over five years related to the bad behavior.

Tolstedt, however, is walking away from Wells Fargo with a very full bank account—and praise. In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.”

On Thursday, Richard Cordray, the head of the CFPB, had a different take, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law,” said Cordray. “They are a violation of trust and an abuse of trust.”

A spokesperson for Wells Fargo said that the timing of Tolstedt’s exit was the result of a “personal decision to retire after 27 years” with the bank. The spokesperson declined to comment on whether the bank was considering clawing back Tolstedt’s back pay.

………

What’s more, Tolstedt ran the community banking division of the bank, which included its retail banking and credit card divisions, during the entire period in which the customer abuse was alleged, which goes back to 2011. The CFPB said about three quarters of the unauthorized accounts opened by employees of Wells Fargo were bank deposit accounts. Another 565,000 were unauthorized credit card applications. Tolstedt took over the division in 2008, after Wells Fargo merged with Wachovia during the financial crisis.

………

“This appears to be exactly the situation that clawback provisions were created for,” says Dennis Kelleher, president of Better Markets, a group that lobbies for more regulation of the big banks. “If they don’t apply here, when will they apply.”

(emphasis mine)

So, she presided over a department where fraud was not only rampant, but appeared to be a required employee activity (they fired over 5000 ordinary employees over this) in the division while she presided over it, but no harm, no foul, because she's a senior executive who gets to "Retire" at 56 with a payout of $124,600,000.00.

We really need to start throwing banksters in jail.