Wells Fargo CEO defends bank in tough Senate hearing

Wells Fargo's chief defended the bank's efforts to rectify a massive fake accounts scandal Tuesday, but faced tough questioning from senators and at least one call for his ouster.

Chief executive Tim Sloan, who was promoted to the top job in late 2016 after the scandal exploded, again apologized for the debacle, in which the bank opened as many as 3.5 million potentially phony accounts at a time when executives told Wall Street "cross selling" would boost profits.

Sloan reviewed myriad efforts to compensate affected customers, change payment incentives and better train employees.

"Wells Fargo is a better bank today than it was year ago and in a year it will be a better bank than it is today," he pledged.

The session was a follow-up to a hearing last fall in the same committee at which former chief executive John Stumpf endured bruising questions from senators from both parties and a particularly harsh dressing-down from Massachusetts Democrat Elizabeth Warren, who accused the CEO of "gutless leadership."

Stumpf stepped down three weeks after the hearing and was replaced by Sloan, a 30-year Wells veteran who served as chief operating officer when the fake accounts scandal broke.

Warren also went hard after Sloan, telling him he "should be fired" for not doing more to investigate and address the problem as signs of the scandal surfaced.

"At best you were incompetent," she said. "At worst you were complicit."

Sloan defended his response, saying the bank took some "incremental" actions early on, but misunderstood the depth of the problem.

"I have made mistakes, I haven't been perfect," he said. "The reason I'm the right person is because I have made change for 30 years."

While some Republican lawmakers also expressed astonishment at the scandal, their questions were generally fairly polite.

But Senator Sherrod Brown lambasted Wells Fargo for forcing consumers in many cases into arbitration, a behind-closed-door process that can keep corporate malfeasance from courtroom exposure and that critics say often leaves consumers paying.

Other Democrats attacked Sloan for outsourcing jobs from the US to the Philippines and for his frequent invocation of Wells Fargo's massive size, which they said implied the bank was too big to regulate. The bank has 70 million customers and employs 270,000.

"So you're too big?" Democratic Senator Brian Schatz of Hawaii said to Sloan's response to a question on why the bank's charter shouldn't be revoked.

"It's only in financial services where people can make such massive errors and there doesn't appear to be any accountability," Schatz said.

Source: AFP