WFC Wells Fargo and Company

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.

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 2 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 as the spotlight has intensified on the bank since it announced the change earlier this month after its settlement announcement. He also gave more details on the 5,300 people who were fired, saying about 10% were branch managers.

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 17:46 ET (21:46 GMT)

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