Fed is prepared to act against Wells Fargo if warranted, Yellen says, under fire from Warren

Yellen said the central bank is investigating the matter and will act should the facts warrant. The bank defended the steps it has taken to address its problems.

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"Can you explain to me how the Wells board can possibly have satisfied its obligations under the Fed's risk management regulations?" Warren said.

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"I will say that the behavior that we saw was egregious and unacceptable," [Yellen] said. "We do have the power if it proves appropriate to remove directors. A number of actions already have been taken. We need to conduct a thorough investigation to look at the full record to understand the root causes of the problems. We are certainly prepared to take enforcement actions if those prove to be appropriate."

Warren, though, wasn't satisfied. She pointed out that the Fed already fined Wells Fargo in 2011 for illegally pushing mortgage borrowers into more expensive loans.