John Kasich is furious at Wells Fargo, and now his state is cutting off its business with the bank for at least one year.
In an interview with Business Insider on Thursday, the Ohio governor and one-time 2016 Republican presidential contender said Wells Fargo executives should be held accountable for the bank’s recent fraudulent-accounts scandal.
And on Friday, Kasich announced Ohio was suspending its business with the bank for one year. This will include using Wells Fargo to issue debt or bid for financial-services contracts. The decision applies to state agencies under Kasich’s authority.
That follows similar suspensions by California and Illinois.
“It’s clear that Wells Fargo’s culture was compromised by greed and by a desire to make money that was stronger than a commitment to following proper ethical standards,” Kasich said in a statement announcing the move on Friday.
During his interview with Business Insider, Kasich called the scandal “a disgrace.”
“And everybody who was involved in that culture should be held accountable,” he said.
He added that the bank’s board of directors also held “a certain accountability” for not paying attention to “the quality of the people” running the bank.
Wells Fargo announced on September 8 that the bank was settling with regulators for $185 million after retail-banking employees opened up to 2 million debit- and credit-card accounts under customers’ names without their knowledge from 2011 to 2015.
Kasich said executives should not “walk out of that place with millions, tens of millions, tens and tens of millions of dollars” while 5,300 lower-level employees were fired for opening or overseeing the opening of fake accounts.
“It’s just an outrage,” he said. “It’s people who have forgotten decent values towards other people.”
John Stumpf resigned as CEO on Wednesday and was replaced by former COO Tim Sloan, a 29-year-veteran of Wells Fargo. Stumpf also had $41 million in stock-based compensation clawed back by the bank before his retirement.
Kasich said there might be some “reasonable approaches” that could be effective in curtailing the type of behavior that took place at Wells, but it ultimately came down to the companies to police themselves.
“In terms of what law you could pass, I don’t know,” Kasich told Business Insider. “I mean if there was something specific that made sense, then I’d be OK with that. I would favor that. But just passing something without having a great impact, look, laws only go so far, it’s an individual morality that at the end of the day in values that matters in these companies.”
Despite the scandal, Wells Fargo still posted stronger-than-expected earnings on Friday and said the loss of state business was not a serious detriment to its bottom line.