Wells Fargo’s longtime chief executive John Stumpf endured more than two hours of pummeling Tuesday on Capitol Hill over a scheme in which bank employees created millions of sham accounts to meet aggressive sales goals.
“I have often said that banking is based on trust and that trust was broken at Wells Fargo,” Sen. Richard C. Shelby (R-Ala.), chairman of the Senate Banking Committee, said during the hearing.
Stumpf, who has been at Wells Fargo for more than 30 years, repeatedly apologized for letting down customers. But the questioning was often tense, and Stumpf was interrupted and chastised by lawmakers for not catching the problem sooner.
“I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public,” Stumpf told the committee. “I have been with Wells Fargo through many challenges, none that pains me more than the one we will discuss this morning.”
The San Francisco-based bank has been in lawmakers’ crosshairs since being fined $185 million earlier this month after thousands of the bank’s employees created up to 2 million fake accounts — from credit cards to checking accounts — to meet sales goals. In some cases, bank customers faced various fees for accounts they didn’t request, or bank employees took money from an authorized account to create a fake one.
Wells Fargo fired 5,300 employees between 2011 and 2016 for the scheme, including some managers and “one area president,” Stumpf said. The bank will review whether the conduct could have occurred before 2011, he said. “We don’t want to leave any stone unturned,” Stumpf said.
But that was not enough for many members of the committee, who grilled Stumpf for details about the scheme and repeatedly expressed astonishment that senior management allowed problems to fester for so long without taking more assertive action.
In one tense exchange, Sen. Elizabeth Warren (D-Mass.) demanded that Stumpf explain why he had not offered to give up any of his compensation — he made $19 million last year — or resigned in the wake of the scandal. She noted that Stumpf repeatedly touted Well Fargo’s ability to sell more and more products to customers in quarterly calls with analysts, and then watched as investors pushed up the bank’s stock price, generating gains that increased his own holding by about $200 million over several years.
Source: The Washington Post | Renae Merle