Wells Fargo CEO Sloan Must Go, Senator Warren Tells Fed Chairman
Wells Fargo CEO Tim Sloan and U.S. Senator Elizabeth Warren, a Massachusetts Democrat.

After successfully pushing in 2016 for the departure of the CEO of beleaguered U.S. bank Wells Fargo & Co. (WFC) , Democratic Senator Elizabeth Warren of Massachusetts is now gunning for another.

In a press release Thursday, Warren said she is sending a letter to Federal Reserve Chairman Jerome Powell urging him to replace Wells' current CEO, Tim Sloan, before releasing the San Francisco-based bank from draconian sanctions imposed earlier this year.

Following a series of corporate scandals starting in 2016 that led to the departure of former CEO John Stumpf, the Fed in February temporarily banned Wells Fargo from increasing its assets beyond the current level of about $2 trillion, pending significant improvement in its corporate governance and risk-management practices.    

Warren says that Sloan, as part of the senior management team under Stumpf, is tainted by his role in the prior regime and should be replaced as part of the effort to make a clean break from the past. 

"Sloan's long track record at the bank demonstrates little ability to 'effectively manage the firm's activities' and should give the Federal Reserve little confidence that he can help transform the bank's culture and operations," Warren wrote in the letter to Powell, a copy of which was attached to the press release. 

Last month, Warren criticized Wells Fargo's recent announcement that it plans to reduce the bank's workforce by 5% to 10% over the next three years to meet aggressive cost-cutting targets. With a current staff of about 265,000, that works out to as many as 26,500 employees.

In 2017, during a hearing in Washington, Warren had suggested to Sloan that the bank's stated plan to cut $4 billion in costs by the end of 2019 would mean that he would have to cut more than 20,000 employees. Sloan responded, "You're using math inappropriately." The job-cuts announcement in September showed that Warren was right. 

Since the revelation of the scandals at Wells Fargo, including the opening of millions of unauthorized accounts in customers' names, the bank has reported more than $2 billion in elevated legal costs. 

Betsy Duke, chairwoman of Wells Fargo's board of trustees, said in an e-mailed statement last month that Sloan has the "unanimous support of the board, and this support has never wavered."

Press officials for the bank didn't immediately respond to a request for comment on Thursday. 

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