Wells Fargo & Co. Chief Executive Timothy Sloan has a lot riding on Tuesday morning.
A couple of weeks shy of his first anniversary in the job, Mr. Sloan is set to testify for the first time as CEO in front of the Senate Banking Committee Tuesday at 10 a.m. ET.
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The last time the bank's chief did that, he was grilled over the bank's sales-practices scandal and resigned less than a month later.
Mr. Sloan, who filled that void last October when former CEO John Stumpf left the bank, is expected to answer questions related to the scandal, especially updated information that the bank potentially opened 3.5 million customer accounts without their knowledge, up from the initial estimate of up to 2.1 million accounts.
A three-decade veteran of the bank, Mr. Sloan will likely also address more recent problems in its consumer-lending unit around certain auto-insurance charges and mortgage products. In recent weeks, the San Francisco bank has already released details about those issues, so the focus likely will be more on how Mr. Sloan reacts to tough questions expected from the likes of Sen. Elizabeth Warren (D, Mass.).
Mr. Sloan is planning to take a different tack than his predecessor. For one thing, more than a year has passed since the sales-practices scandal erupted, so he has had more time to prepare than Mr. Stumpf did.
Wells Fargo spokeswoman Jennifer Dunn said the bank welcomes the opportunity to update the committee on steps it has taken to fix problems. But it won't be easy, as Wells Fargo hasn't yet shaken free from the sales issues or more recent problems.
Here are five key things to keep in mind before Mr. Sloan has his moment in the lights.
Sharing the Stage
Mr. Sloan is the only Wells Fargo banker slated to testify Tuesday, but he is scheduled to appear at the same time as another highly anticipated congressional hearing, that of former Equifax CEO Richard Smith in front of the House Energy and Commerce Committee.
Wells Fargo's Prep
In April, Wells Fargo named longtime executive David Moskowitz its new head of government relations and public policy. The Washington, D.C.-based executive hired a new law firm -- Sidley Austin LLP -- to advise the bank on the congressional hearing. Mr. Moskowitz and other Wells Fargo executives have also met with congressional members and staff, but not Sen. Warren, according to people familiar with the matter. She is expected to press Mr. Sloan on positions she has already publicized, including her call to replace more directors on Wells Fargo's board due to the sales-practices scandal.
Executives said they expect Mr. Sloan will be questioned more on accountability and is preparing to be as transparent as possible about what the bank has done in relation to its sales practices scandal and other consumer-lending problems. "The day will be won or lost based on Tim's ability to articulate what we've done," one bank executive said.
Rallying the troops
One important constituency watching the hearing will be Wells Fargo's own employees. In late September, Mr. Sloan hosted a previously scheduled offsite for the bank's management committee, about top 100 executives, in Henderson, Nev. Mr. Sloan sought to get the top executives together in part to make sure they are aligned on overall strategy before the hearing, executives said.
Follow the money
Based on OpenSecrets.org, Wells Fargo spent just $1.7 million on lobbying in 2017 so far. That is low compared with the $4.71 million in 2016 and $6.39 million in 2015. Bank spokeswoman Jennifer Dunn said the figure reflects two reported quarters for 2017 and it is difficult to estimate what the bank's year-end total will be. Mr. Sloan personally donated $33,900 to the Republican National Committee in July, a group he has donated to in prior years but in smaller amounts, according to the Federal Election Commission site.
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(END) Dow Jones Newswires
October 02, 2017 12:06 ET (16:06 GMT)