Coverage: Wells Fargo CEO goes to Congress

Lawmakers on Tuesday pressed Wells Fargo & Co. Chief Executive Officer Tim Sloan for proof the bank has put a string of consumer abuse scandals behind it at a tense congressional hearing.

Imani Moise and Pete Schroeder of Reuters had the news:

While Sloan struggled to convince skeptical lawmakers that Wells Fargo has transformed its culture, he managed to navigate a hostile committee without a major stumble that would have compounded doubts about his leadership.

One of the harshest blows was dealt after the hearing by a key regulator, which said in a statement it was “disappointed” Wells Fargo had not made more progress fixing its corporate governance and risk management.

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 has been keen to see how the panel will treat the industry.

The CEOs of Morgan Stanley, Goldman Sachs Group Inc, Citigroup Inc, JPMorgan Chase & Co and Bank of America Corp are expected to appear before the panel next month.

Kate Gibson of CBS News reported that one lawmaker said Wells Fargo was “too big to manage”:

Sloan remained calm despite being grilled by members of the House Financial Services Committee, chaired by California Democrat Maxine Waters, who is among the lawmakers looking to increase oversight of large banks. After citing a litany of Wells Fargo’s abusive practices, Waters told Sloan “this conduct appears to persist.”

Waters, a noted critic of Wall Street, also said the bank’s “ongoing lawlessness” and its failure to reform suggests it is “too big to manage.” The lawmaker pointed to a New York Times story published Saturday that outlined how Wells workers remain under pressure to squeeze extra cash from customers, with rules reportedly bent or broken to meet performance goals.

North Carolina Republican Patrick McHenry also cited the Times article, asking Sloan if he could ensure that the bank would no longer harm consumers.

Daniella Cheslow of NPR reported that Sloan argued that the bank has transformed itself:

In his opening remarks, Sloan said his company has done away with high-pressure product sales targets that encouraged workers to open unauthorized accounts. The bank has also shaken up its board of directors and improved wages and benefits for its workers, Sloan said. 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.”

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

“Each time a new scandal breaks, Wells Fargo promises to get to the bottom of it,” McHenry said. “It promises to make sure it doesn’t happen again. But then a few months later, we hear about another case of dishonest sales practices or gross mismanagement.”