CEO of troubled Wells Fargo says bank is stronger

Wells Fargo Trails Bank Rally Before Tim Sloan's Big Day in Congress

Wells Fargo Lawyers: Our CEO Is Full Of 'Corporate Puffery'

Rep. Alexandria Ocasio-Cortez (D-N.Y.) tried to grill the CEO of Wells Fargo during his testimony before Congress on Tuesday but it resulted in embarrassing video for the upstart freshman congresswoman.

Sloan was grilled by lawmakers about the scandals and about how the San Francisco bank planned to make amends and be a more consumer-friendly bank.

"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 USA households is simply too big to manage", Waters said.

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.

Sloan, who made $60.4 million working for the bank before the fake-account scandal broke in 2016, has been saying this kind of thing for years now. As he entered the packed committee room Tuesday morning, he shook hands and greeted several lawmakers.

Wells Fargo's scandals have been wide-ranging and costly.

The hearing is the first in what is expected to be a series held by Waters to probe the health of the US banking sector.

The shares were up 0.2 percent in early afternoon trading Monday, a fraction of the gains at other big banks including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc.

She went on to address Wells Fargo's financing of the Dakota Access Pipeline, asking whether the bank should be required to cover environmental clean-up costs if something went wrong. The bank has almost $2 trillion in assets, more than 260,000 employees and 70 million customers.

But in federal court, Wells Fargo tells a different story. "Why should Wells Fargo continue to be the size that it is?"

"Uh, I don't know how to answer that question because we weren't", Sloan replied.

Wells Fargo's regulators could simply remove Sloan as CEO - Sloan is also president of the bank - and break the bank into smaller parts, said Rep. Stephen F. Lynch (D-Mass.). "Robbing your customer is not an error in business", Lynch said. It "is something more sinister". Sloan would not commit to say whether Wells would consider backing a law that let customers who believed they had been defrauded or misled sue banks rather than be forced into arbitration.

"I don't think our customers are stupid", the CEO responded. The bank has launched multiple marketing campaigns hoping to fix its reputation as the scandals continue to pile up, repeatedly reassuring investors of its great progress during quarterly earnings calls. That report cited Wells Fargo employees who said its culture hasn't changed and that misaligned sales incentives still exist. The bank no longer relies on incentives to reward employees, which was blamed for numerous bank's missteps, he said.

The Consumer Financial Protection Bureau ordered Wells Fargo to pay $185 million in penalties and fines in 2016 for creating those unwanted accounts.

Sloan responded by saying that Wells Fargo was terminating relationships with two private prison companies, GEO Group and CoreCivic, both of which have been involved with immigration detention.

Additionally, Wells Fargo's chief technology officer, Scott Dillon, is due to leave the bank at the end of the month. "We continue to be disappointed with [Wells Fargo's] performance under our consent orders and its inability to execute effective corporate governance and a successful risk management program", Bryan Hubbard, an agency spokesman, said in a statement.

During the first hour of the hearing on Tuesday, Democrats and Republicans alike took a tough line on Sloan, quizzing him on the bank's remediation efforts, personnel changes, risk management controls, culture and whether it should be broken up.

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