Wells Fargo "too big to manage", lawmaker tells CEO

Wells Fargo

Wells Fargo "too big to manage", lawmaker tells CEO

Democratic New York Representative Alexandria Ocasio-Cortez asked Wells Fargo CEO Tim Sloan on Tuesday why his bank got involved with caging children during congressional testimony.

Members of the House Financial Services Committee kept Sloan on his toes throughout Tuesday's hearing as the CEO fought to convince them that the beleaguered bank has cleaned up its act after a series of scandals that affected millions of customers.

"I don't know how'd you calculate that, congresswoman", Sloan replied.

"Wells Fargo is a better bank than it was three years ago, and we are working every day to become even better", Sloan told the committee.

Several lawmakers noted that Wells had been fined by every agency it is regulated by and Sloan said that by his count, the bank is now under 14 consent decrees with those agencies.

But just hours after the hearing ended, one of the bank's chief regulators, the Office of the Comptroller of the Currency, indicated that Wells Fargo has a long way to go.

A taken-aback Sloan didn't answer her question directly.

"Mr. Sloan, why was the bank involved in the caging of children and financing the caging of children to begin with?"

Facing often-incredulous questions from committee members, Sloan said that the changes he's put in place at the bank mean that the chance of something like the fake accounts scandal ever happening again are "very low if not zero".

'Wells Fargo's ongoing lawlessness and the failure to right the ship, suggests the bank is simply too big to manage, ' the California Democrat said of its $1.9trillion in assets. She called Wells Fargo "a recidivist financial institution". Workers told reporters the goals were unattainable, similar to the ambitious sales targets that had driven Wells Fargo workers to open unauthorized accounts in the past.

Rep. Patrick McHenry, R-N.C., asked the executive how many federal consent orders exist against the company: 14.

The stakes had been high heading into the hearing for Sloan, a 31-year Wells Fargo veteran who was appointed CEO when John Stumpf retired soon after the sales practices scandal erupted in 2016.

Tensions also flared as Democrats including Carolyn Maloney of NY and Ayanna Pressley of MA demanded Wells Fargo stop providing financial services to the National Rifle Association and firearms companies.

Democrats and Republicans took a broadly tough line, quizzing Sloan on the bank's remediation efforts, personnel changes, risk management, culture and whether it should be broken up.

The Federal Reserve took unprecedented action on Wells Fargo's business in February of 2018, forcing the bank to replace four of its directors and capping its growth until the bank developed better risk-management practices.

He said one exit was finalized and the other was still pending, but he couldn't remember which was which. Sloan said that customers' concerns were being addressed and that they didn't need to go to court.

Wells Fargo contends that it's made progress toward turning itself around, and that it's committed to making things right for its customers and earning back the public's trust.

Next month, top executives of Morgan Stanley, Goldman Sachs, Citigroup, JPMorgan Chase and Bank of America are expected to appear in front of the panel. In 2012, Wells Fargo paid $175 million to settle allegations from the Justice Department that it had engaged in "systemic discrimination" involving more than 34,000 minority customers.

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