Wells Fargo CEO draws bipartisan rebuke at tough House hearing

Lloyd Doyle
March 15, 2019

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.

Stakes are high for 31-year Wells Fargo veteran Sloan, who was appointed CEO when John Stumpf retired soon after the sales practices scandal erupted in 2016.

While Sloan spoke definitively about how the bank has moved past the fake accounts scandal, he hedged his answer to Rep. Greg Meeks (D-NY), who asked if there were more negative stories about the bank to come: "I can't control the media". "And in a securities filing this month, Wells Fargo said it could be required to pay as much as $2.7 billion more than it had set aside as of the end of December to resolve legal cases, including ongoing probes by the Justice Department and the Securities and Exchange Commission".

"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.

Lawmakers could also ask about the bank's decision to cut thousands of U.S.jobs, its pledge to boost stock buybacks and its forced arbitration policy for customers.

'We have discarded our old decentralized structure that allowed prior problems to occur, ' wrote Sloan in remarks he will deliver before Congress.

Last year, the Fed placed an asset cap on Wells Fargo in response to its "widespread consumer abuses".

"I don't know how to answer that question because we weren't", he said.

Ocasio-Cortez, clearly growing impatient, demanded to know why Wells Fargo shouldn't pay for clean up from theoretical spills in the future that haven't happened yet.

In a tweet Monday, Waters said she "will be confronting Wells Fargo" during the hearing.

"The past few years have represented a hard chapter in Wells Fargo's storied history", Sloan, 58, said in prepared remarks.

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. Starting in Palo Alto, demonstrators will head up the peninsula forming a human billboard to pressure the San Francisco-based bank to halt fossil-fuel lending.

Republicans and Democrats alike blasted Sloan and the bank.

Still, Beck doubted the House hearing would lead to more drastic penalties on Wells Fargo, like breaking up the bank.

The hearing could see Sloan clash with Democrats including panel chair and vocal bank critic Maxine Waters, as well as Alexandria Ocasio-Cortez, a rookie lawmaker and leading voice of her party's progressive wing.

"Regulators hit Wells Fargo with a $1-billion fine past year for forcing auto-loan customers into unneeded insurance policies and charging improper fees to some mortgage borrowers", The Times reports.

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. He thanked lawmakers for letting him discuss "the progress we are making as we work to become the most customer-focused, efficient and innovative Wells Fargo ever".

Sloan said the bank has made amends.

Stephen Beck, founder of the CG42 management consulting firm that advises banks among other industries, said a study conducted by his company belies that claim.

Other reports by Iphone Fresh

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