Published: Sat, March 16, 2019
Business | By Eloise Houston

Wells Fargo CEO's overtures earn bipartisan rebuke in fiery congressional hearing

Wells Fargo CEO's overtures earn bipartisan rebuke in fiery congressional hearing

Timothy Sloan testified in the House Financial Services Committee Hearing meant to hold "megabanks" accountable.

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".

"With all of this experience and the length of time that you have been there, the roles that you have played, you have not been able to keep Wells Fargo out of trouble, you keep getting fined", panel Chairwoman Maxine Waters, D-Calif., said. At one point he claimed that "no institution in this country has done more for diverse communities than Wells Fargo" ― quite a claim for a bank that has been separately sued by the cities of Chicago, Baltimore, Miami and Philadelphia for targeting black and brown borrowers with predatory loans.

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

Criticism of Wells Fargo came from so many that Kentucky Republican Andy Barr opened his questions by expressing surprise: "I'm shocked that you're not in an orange suit and little jail cell today". The bank opened over 3 million accounts for people who never actually requested them. Sloan promised that he has made "fundamental changes" at the bank and its problems have been "fixed".

In his opening remarks, Sloan said his company has done away with high-pressure product sales targets that encouraged workers to open unauthorized accounts.

McHenry appeared to have little patience with Sloan's assurances. Rep. Patrick McHenry (R-N.C.), the committee's ranking Republican, asked Sloan. At his appearance before Congress, Sloan will promise that Wells Fargo won't engage in fraudulent behavior anymore. "It promises to make sure it doesn't happen again". "But then a few months later we hear about another case of dishonest sales practices or gross mismanagement, another case of the consumer who has been harmed by the bank's business practices".

It's been almost three years since the unauthorized accounts scandal broke, when NPR and other outlets reported bankers had created deposit and credit card accounts for customers without their knowledge. Sloan has faced calls to step down from investors and politicians, including U.S. Senator Elizabeth Warren, a 2020 Democratic presidential contender.

Has Wells Fargo changed after financial scandals?

Wells Fargo options prices imply a 1.6 percent move in the share price by the end of this week, according to data compiled by Bloomberg. To date, the company has reviewed 165 million accounts going back 15 years, contacted more than 40 million customers - both individuals and small businesses - via 246 million communications and provided tens of millions of dollars in compensation to customers. "You are telling them that they are stupid for wanting to go to court". In 2012, Wells Fargo paid $175 million to settle allegations from the Justice Department that it had engaged in "systemic discrimination" involving more than 34,000 minority customers.

The hearing comes as Wells Fargo, which has a large presence in Charlotte, remains under intense scrutiny from federal authorities and lawmakers in the wake of the 2016 scandal and newer instances of customer harm.

Like this: