The Wells Fargo board acted Tuesday to strip Stumpf and the executive who ran the retail banking division of millions of dollars in pay, a move known as a "clawback" that falls within company directors' authority.
Stephen Sanger, the board's lead independent director, said Wells Fargo executives could face further penalties, depending on the results of the investigation.
Stumpf will also give up his salary during the investigation.
Wells Fargo Bank has made the headlines again after the US Commodity Futures Trading Commission (CFTC) filed and settled charges against the bank for failing to comply with its obligations to submit accurate large trader reports (LTRs) for physical commodity swap positions.
Wells Fargo engaged in a massive, years-long bank fraud scam that affected millions of customers. The revelations sparked investigations by federal agencies and bipartisan outrage in Congress.
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Stumpf will appear before the House Financial Services Committee on Thursday. During his appearance before that panel, Stumpf and the bank were roundly criticized for firing 5,300 employees over five years, yet taking no action against top executives. Lawmakers told Stumpf at the hearing those dismissals didn't go high enough up the chain.
Tamar Frankel, a law professor at Boston University whose area of study includes corporate governance, believes the best scenario would be for Stumpf to keep his job but institute real changes. The bank did not invest in as many toxic mortgages in the 2000s as its counterparts, and Stumpf initially declined to take bailout money from Washington before accepting it in a sign of solidarity.
A CNNMoney analysis, conducted prior to the clawbacks, showed that if he were to leave, Stumpf could leave Wells Fargo with about $200 million of cash, Wells Fargo stock and options. She also accused Stumpf of "gutless leadership". Low-paid retail bank employees who didn't meet short-term sales quotas could lose their jobs. The targets were high even in small towns.
"Wells Fargo's fleecing of its customers by opening fraudulent accounts for the goal of extracting millions in illegal feels demonstrates, at best, a reckless lack of institutional control and, at worst, a culture which actively promotes wanton greed", Chiang says in a statement. Debit cards were issued and activated, as well as PINs created, without telling customers. The Wells Fargo CEO is also expected to say the bank will scrap the controversial sales goals that workers blame for the fake accounts on October 1, three months earlier than previously planned. "A complete review of cases and complaints is needed to determine if the second-largest United States bank violated the Fair Labor Standards Act", the involved senators said, according to the Associated Press.