Lawmakers Take More Swings at Wells Fargo CEO -- 2nd Update
September 29 2016 - 6:55PM
Dow Jones News
By Rachel Louise Ensign, Yuka Hayashi and Emily Glazer
Wells Fargo & Co. Chief Executive John Stumpf struggled to
mount a defense Thursday in the face of repeated attacks over the
bank's sales practices from members of the House Financial Services
Committee from both parties.
In his second Capitol Hill appearance in as many weeks, Mr.
Stumpf again expressed regret for his company's actions and said
Wells Fargo's board was working to investigate how problems with
sham accounts and unauthorized meddling in customer business
snowballed over five years.
The chief executive also said he recently spoke with Warren
Buffett, the bank's largest shareholder. Later Thursday, Mr.
Buffett told CNBC that he spoke to Mr. Stumpf for about five
minutes and told him the problems at the bank were bigger than the
CEO may have originally thought. A bank spokeswoman declined to
comment on the conversation.
Mr. Stumpf has been on the hot seat since the bank earlier this
month paid a $185 million settlement and entered into an
enforcement action with two regulators and a city official over
allegedly "widespread illegal" sales tactics. The bank opened as
many as two million customer accounts with fictitious or
unauthorized information. The bank has said it fired 5,300
employees over five years.
Earlier this week, the bank's board said it would rescind $41
million from Mr. Stumpf and $19 million from former retail banking
head Carrie Tolstedt, who oversaw the unit responsible for the bad
behavior.
Fighting to stay in his job as the bank encounters increasing
attacks from Republican and Democrat politicians and some
customers, Mr. Stumpf was grilled again during the more than
four-hour hearing and at times didn't have specific answers to
defend the bank's actions.
"I'm amazed at what you do not know about your business," said
Rep. Roger Williams (R., Texas). "I've heard more 'I don't knows'
from a CEO than I think I've ever heard in my life."
Though Mr. Stumpf came to the committee with a few more details
to share, he was often cut off by the dozens of representatives
eager to use their allotted time in their last hearing before the
November election to criticize the bank and Mr. Stumpf's
leadership.
"You ought to be downright ashamed of yourself," Rep. David
Scott (D., Ga.) told the 63-year-old chief executive.
Mr. Stumpf told the committee he had suggested his own clawback
to Wells Fargo's board, reiterating what he wrote in a letter to
bank employees earlier in the week. He also said the bank plans to
end its sales goals Friday, speeding up the timeline.
Mr. Stumpf also provided some new details on when he and the
bank's board learned about the allegedly unwanted accounts, saying
he learned about it in the "fall time frame" of 2013, and before
the Los Angeles Times carried a second detailed report on the issue
in December.
At times, the event was a repeat of last week's combative Senate
Banking Committee hearing. Some representatives, including
Republicans, echoed the calls by Sen. Elizabeth Warren (D., Mass.)
for Mr. Stumpf to resign. Mr. Stumpf, for his part, repeated many
of his key points from that prior hearing, repeatedly apologizing
but maintaining in prepared remarks that there was "no orchestrated
effort, or scheme as some have called it," behind the sales of
unwanted products.
The representatives vowed to keep the sales scandal in the
spotlight. Rep. Jeb Hensarling, the Republican committee chairman
from Texas, said the committee is conducting its own investigation
of Wells Fargo that could include more hearings with other bank
employees and subpoenas for more information. Ranking member Maxine
Waters (D., Calif.), meanwhile, said the bank should be broken
up.
"I am worried for the whole banking community that the public
cannot and will not trust our banks," she said.
The hearing had its zanier moments. One lawmaker called Mr.
Stumpf "the head banana" of Wells Fargo, while another brought a
mug shot of a man who allegedly robbed a Wells Fargo branch and
made a comparison between him and Mr. Stumpf. Many representatives
including Rep. Hensarling mentioned they were personally Wells
Fargo customers and two of them disagreed on whether or not the
bank had a good website.
Write to Rachel Louise Ensign at rachel.ensign@wsj.com, Yuka
Hayashi at yuka.hayashi@wsj.com and Emily Glazer at
emily.glazer@wsj.com
(END) Dow Jones Newswires
September 29, 2016 18:40 ET (22:40 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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