Lawmakers grill Wells Fargo CEO about scandals
Wells Fargo CEO Tim Sloan is on Capitol Hill trying to convince lawmakers the bank has undergone a “transformation” and is now a “better bank.”
Sloan is testifying before the House Financial Services Committee, led by Rep. Maxine Waters (D-CA). Waters began the hearing by listing all the controversies surrounding Wells Fargo — including the creation of fake accounts, improperly repossessing service members’ cars and overcharging small businesses for credit card transactions.
“What this long, but impartial list makes clear is that Wells Fargo is a recidivist financial institution that creates widespread harm with a broad set of offenses,” said Waters.
Ranking member, Rep. Patrick McHenry (R-NC) said questions still need to be answered and he wants to know more about how Sloan is changing the bank’s culture.
“I’m concerned that we don’t know with certainty how many customers were affected, what business lines were implicated and the full extent of the damage,” said McHenry.
Sloan said since taking over as chief executive, he’s been working to “address the root causes” of the company’s recent controversies.
In connection to the sales practice controversy, Wells Fargo has looked back more than 15 years, reviewed 165 million accounts and contacted more than 40 million customers and paid millions of dollars in compensation to customers, according to Sloan’s testimony.
“To be sure, getting this right for each customer takes time – longer than I would like, frankly,” said Sloan in his opening remarks.
Sloan is the first big bank CEO to go before the House Financial Services Committee since Waters took over as chair. Waters has slammed Wells Fargo for its “egregious pattern of consumer abuse.”
Waters has vowed to step up oversight on the banking industry, and is expected to eventually ask chief executives of other big banks to testify.
"We are poised to have significant hearings" said Waters at a recent press conference, adding she would not hesitate to bring "bad actor" CEOs before her committee.
A Wells Fargo spokesperson told Yahoo Finance Sloan doesn’t feel additional pressure being the first CEO in the witness chair. The spokesperson said Sloan has been meeting with lawmakers frequently to address their concerns before the hearing.
On the other side of Capitol Hill, Sen. Elizabeth Warren (D-MA) has called for Sloan to leave the company.
Last year, the Fed placed an asset cap on Wells Fargo in response to its “widespread consumer abuses.” Warren recently wrote a letter to Fed Chairman Jerome Powell, saying the Fed should not lift the growth restriction on Wells Fargo until Sloan is ousted.
In his opening statement, McHenry noted that the cap will likely be in place through the end of the year.
“Obviously the bank has a ways to go before the Federal Reserve is satisfied,” said McHenry.
Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.