John Stumpf would often boast about his romantic, folksy background.
He grew up as one of 11 kids on a central Minnesota farm, cut his teeth in community banks, married the local banker’s daughter. The company he’d go on to lead, Wells Fargo, with its focus on regular checking accounts for humble folks, carried itself with a similar ethos.
That's what the marketing said. Stumpf's abrupt, scandal-ridden departure in 2016 cut through the folksy miasma.
Wells Fargo workers, under intense pressure to meet the company’s sales goals, had been surreptitiously opening new accounts in their customers’ names without their knowledge or consent. Millions of phony accounts were opened between 2002 and 2016, including hundreds of thousands of credit cards clients didn’t ask for.
This didn’t get back to Stumpf immediately. Not before thousands of lower-level staffers—many of whom tried to warn Wells Fargo against this rotten business model—were fired when they failed to meet their sales goals.
But regulators eventually found that blame for the bank’s wrongdoing went straight to the top. It was management who had set impossible goals for the staff, management who increasingly pressured employees to meet them or get lost, and management who “fostered an atmosphere that perpetuated improper and illegal conduct.”
Stumpf stepped down in 2016 and forfeited his Wells Fargo stock. The bank itself paid out millions in fines and fees. Last week, Stumpf's own bespoke punishment came down in the form of a $17.5 million fine. He’s also never allowed to work in a bank again.
Current Wells Fargo CEO Charlie Scharf told the Associated Press the punishments are “consistent” with his belief that “we should hold ourselves and individuals accountable”—and with his belief that significant parts of the way the bank had operated were “flawed.”
For a long time, Stumpf touted himself as somehow better than those big-city global investment banks. He became chief executive of Wells Fargo in 2007, right as the nation’s finances at large were about to plummet through a worm-eaten foundation of mortgage debt.
His company managed to avoid the worst of the crisis and initially spurned bailout money the other banks desperately needed. He criticized the “plethora” of banking regulations enacted in 2010 as unnecessary hinderances.
Besides Stumpf, other Wells Fargo execs face a total of $37.5 million in fines. Two other bank leaders reached seven-figure settlements with the feds. Stumpf can afford it. In his decade running Wells Fargo, he made $313 million in salary and bonuses.