Economy

Wells Fargo CEO Testifies on Company Reforms Before Skeptical Congress

Wells Fargo CEO Testifies on Company Reforms Before Skeptical Congress

Wells Fargo & Co. was underperforming the broader KBW Bank Index as Chief Executive Officer Tim Sloan prepared to appear before a House committee on Tuesday, which is set to probe what it describes as a "pattern of consumer abuses".

On Tuesday, Rep. Katie Porter (D-Calif.) flagged these quotes from filings in an ongoing class-action lawsuit against Wells Fargo that alleges the company hurt shareholders by hiding its vehicle repossession scandal from the public in the months after the fake-account scandal.

He told the committee that Wells Fargo is compensating retail bank customers who were impacted by past retail sales practices issues.

"Wells Fargo's ongoing lawlessnness and the failure to right the ship, suggests the bank ... is simply too big to manage", she added.

The hearing is probably a preview of what is expected to be tough oversight of the country's biggest banks by Waters, who has been critical of the Trump administration and Republicans for loosening banking regulations. The bank opened over 3 million accounts for people who never actually requested them.

"Our corporate culture has substantially improved", he said in his opening remarks.

According to the Financial Times, committee members pressed back on Sloan, raising questions such as why regulators had yet to release the bank from its consent orders and why the bank has not followed peers and stopped extending credit to gunmakers. After citing a litany of Wells Fargo's abusive practices, Waters told Sloan "this conduct appears to persist".

The committee's ranking Republican, Patrick McHenry of North Carolina, said his party wouldn't show any sympathy for Wells Fargo.

"I don't know how you'd calculate that, Congresswoman", Sloan said.

"It's my job as CEO to make sure things change and they are changing", Sloan said.

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At times on Tuesday Sloan expressed remorse over the bank's abuse scandals, noting in particular he felt "terrible" that some servicemen and women had been harmed by faulty products.

AOC: "Should Wells Fargo be held responsible for the damages incurred by climate change due to the financing of fossil fuels?"

Still, some Republicans later in the hearing acknowledged the bank's efforts to change, with Representative Sean Duffy saying his colleagues had been too harsh on Sloan. He said it had made contact with some 40 million customers and had paid tens of millions of dollars in restitution.

"You've not been able to keep Wells Fargo out of trouble".

A taken-aback Sloan didn't answer her question directly. "You are telling them that they are stupid for wanting to go to court".

Such abuses caused the Federal Reserve to impose an unprecedented cap on Wells Fargo's growth previous year, a restriction that remains in effect.

In August 2018, Wells Fargo agreed to pay a $2 billion civil penalty to settle allegations the bank originated and sold mortgage loans that included false information in the years leading up to the financial crisis.

Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) have both introduced legislation that would break up Wells Fargo, and Warren has been calling for Sloan to be fired since the fake-account scandal broke in late 2016.

"Why should Wells Fargo continue to be the size that it is?" asked Waters. The assertions "are just wrong", Sloan said. The bank remains subject to a balance-sheet cap imposed by the Federal Reserve.


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