Wells Fargo CEO Tim Sloan Faces An Angry Congress

Wells Fargo CEO Timothy Sloan is questioned by the House Financial Services Committee about revelations the bank had created millions of fake bank accounts to reach their financial goals on Capitol Hill in Washington Tuesday

Wells Fargo CEO Timothy Sloan is questioned by the House Financial Services Committee about revelations the bank had created millions of fake bank accounts to reach their financial goals on Capitol Hill in Washington Tuesday

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". Wells Fargo has shaken up its executive ranks, raised the minimum wage to $15 an hour and given millions to charity, he told them.

Among a litany of scandals in recent years was Wells' acknowledging that its employees had opened up to 3.5 million accounts without customers' authorization or knowledge in order to meet sales quotas. But that personal touch didn't appear to quiet bipartisan criticism of the bank.

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.

At one point, McHenry, whose district includes the Charlotte metro area, asked Sloan, "Is this the end of scandal at Wells?" Sloan is expected to return to the committee to testify in April, as are heads of JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs and Morgan Stanley, according to The Wall Street Journal.

Opening the packed hearing, Waters recounted Wells Fargo's numerous missteps, saying the bank had failed to prove it had abandoned harmful policies.

The bank's stock is trading almost flat Tuesday.

"You've not been able to keep Wells Fargo out of trouble", she said. He argued the San Francisco-based lender isn't too big to manage and categorically denied assertions in a New York Times article over the weekend.

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.

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Sloan said that the bank had changed pay packages that were tied to extremely aggressive sales targets.

"Our customer experience and loyalty survey results are now at their highest levels in the past 2 1/2 years", he said. It "is something more sinister".

So @AOC gets some news out of Wells Fargo CEO Sloan: asking about its investments in private prisons, Sloan says Wells has fully exited debt financing for one company (he doesn't remember which) and will exit the other when the debt matures.

"And you refuse to let people go to court", Sherman countered. "And I think the way in which we serve our customers is reflective of the changes I've made since I've become CEO". 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. The bank no longer relies on incentives to reward employees, which was blamed for numerous bank's missteps, he said.

The bank has paid billions of dollars in fines to regulators for consumer abuses in virtually every part of its business.

Wells Fargo CEO and President Tim Sloan told the committee the bank is compensating customers who had been harmed, strengthening risk management and internal controls, and improving the culture at the consumer banking giant.

"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. "We provide financing to the company that's operating the pipeline".

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