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

Cornelia Mascio
Marzo 14, 2019

Tim Sloan, president and chief executive of Wells Fargo, arrives for a House Financial Services Committee hearing on Tuesday.

While Sloan struggled to convince skeptical lawmakers that Wells Fargo has transformed its culture, he managed to navigate a hostile committee without a major stumble that would have compounded doubts about his leadership.

Sloan said the bank has made amends.

Sloan could not rule out the possibility of new scandals emerging, but said the changes implemented since he became CEO "are going to prevent them from occurring as best we can".

"Wells Fargo's ongoing lawlessness and failure to right the ship suggests the bank - with approximately $1.9 trillion in assets and serving one in three US households is simply too big to manage", Waters said.

"We continue to be disappointed with Wells Fargo Bank N.A.'s performance. and its inability to execute effective corporate governance and a successful risk management program", said OCC spokesman Bryan Hubbard. After citing a litany of Wells Fargo's abusive practices, Waters told Sloan "this conduct appears to persist". Beck said Wells Fargo customers were the most likely to abandon their bank.

Sloan has spent years attempting to fix the bank's image, including making regular visits to Capitol Hill.

'Is it true Wells Fargo invested or financed in some of these industries?' the freshman Democrat asked.

"Why does Wells Fargo continue to put companies over people?"

"Because we don't operate the pipeline, we provide financing to the company that's operating the pipeline", Sloan answered.

But in federal court, Wells Fargo tells a different story.

"The issue within the institution was not a matter of size, it was a matter of culture", Barr said.

While Sloan assured lawmakers that Wells is doing everything it can to comply with regulators, one federal banking agency took issue with the assertion.

Asked about the report, Sloan said it was "inaccurate".

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

The board has credited him for rooting out and fixing past problems, addressing regulators' concerns, tightening internal oversight and taking other steps to improve earnings.

Sloan said the bank was not involved in the caging of children although it had provided financing to a company that engaged in prison construction. They're planning a series of sessions this year to examine big banks and may call in other CEOs in coming months.

"Each time a new scandal breaks, Wells Fargo promises to get to the bottom of it".

Wells Fargo has paid billions in fines to settle allegations, including those that it made millions of phony accounts across all 50 states and the District of Columbia, and sold customers unnecessary auto insurance.

The Consumer Financial Protection Bureau ordered Wells Fargo to pay $185 million in penalties and fines in 2016 for creating those unwanted accounts. The abuses led the Fed to bar the bank from growing total assets beyond their level at the end of 2017 until lapses are fully addressed.

The hearing, held by Democrat Chairwoman Maxine Waters, was titled, "Holding Megabanks Accountable: An Examination of Wells Fargo's Pattern of Consumer Abuses".

The committee's ranking Republican Patrick McHenry made it clear that his party would not go soft on the country's fourth-largest USA bank as they sought evidence it had remedied customer abuses.

Still, Sloan remained calm under questioning, though he appeared to frustrate some lawmakers by declining to disclose confidential information on the progress of some remediation efforts, and by failing to say categorically that Wells Fargo would never suffer another scandal. Nor do we know "the full extent of the damage".

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