Wells Fargo Under Bipartisan Fire During Congressional Hearing

Galtero Lara
Марта 15, 2019

The CEO of beleaguered Wells Fargo told Congress Tuesday that the bank has cleaned up its act after a series of scandals that affected millions of customers. "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".

Sloan was the first bank executive to be grilled by the House Financial Services Committee since it was taken over by Democrats following the 2018 congressional election. A nervous Wall Street is keen to see how hostile the panel will be toward the industry.

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.

Sloan also said Wells Fargo has centralized companywide control functions such as risk, finance, human resources, compliance and technology for better oversight.

Wells Fargo is in the business of lending money to companies that make it possible for pipelines to carry Canadian tar sands, one of the most environmentally damaging sources of fuel. At one point he claimed that "no institution in this country has done more for diverse communities than Wells Fargo" ― quite a claim for a bank that has been separately sued by the cities of Chicago, Baltimore, Miami and Philadelphia for targeting black and brown borrowers with predatory loans.

Rep. Patrick McHenry, the ranking Republican on the committee, noted that after one scandal has erupted at Wells Fargo another followed.

At the hearing, Porter asked Sloan whom Congress should believe: Sloan when he says he's fixed things, or his lawyers who say he's just resorting to puffery.

Still, some Republicans later in the hearing acknowledged the bank's efforts to change, with Representative Sean Duffy saying his colleagues had been too harsh on Sloan.

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

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The CEO has faced calls to step down from investors and politicians, including U.S. Senator Elizabeth Warren, a 2020 Democratic presidential contender. "All the changes that you have said that you made are not evident and you do not have the kind of customer satisfaction that you are alluding to".

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.

The wording was used by Wells Fargo attorneys in asking a federal judge to dismiss a proposed class action accusing the bank of misleading investors late past year.

"With all of this experience, the length of time you have been there and the roles that you have played, you have not been able to keep Wells Fargo out of trouble, you keep getting fined", Walters told Sloan.

Such abuses caused the Federal Reserve to impose an unprecedented cap on Wells Fargo's growth previous year, a restriction that remains in effect.

Waters in her testimony said the Fed's punishment had not changed the bank, adding that "regulators seem unwilling to take forceful actions".

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.

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

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