Wells Fargo CEO Tim Sloan on Tuesday pledged to Congress that the lender’s laundry list of scandals are being addressed, but the overtures fell flat among lawmakers who blasted the slow pace of the recovery and questioned whether the bank is too large to change.
In statements to the House Financial Services Committee, Sloan – who has been with the Wells Fargo for 31 years -- outlined a slew of changes he has implemented to the company's retail banking sector since assuming the top spot, including overhauling the leadership of the division and ending an incentive program at the heart of much of the controversy.
The lender, however, is now operating under 14 consent decrees from federal regulators, and key lawmakers suggested the company is too big to properly manage.
“With all of this experience and the length of time that you have been there, the roles that you have played, you have not been able to keep Wells Fargo out of trouble, you keep getting fined,” panel Chairwoman Maxine Waters, D-Calif., said. “Why should Wells Fargo continue to be the size that it is?”
Republicans and Democrats alike blasted Sloan and the bank. North Carolina’s Rep. Patrick McHenry, the top GOP lawmaker on the panel, warned that bipartisan criticism is expected because of “the failures that you have overseen under your watch.”
“I’m concerned that we don’t know with certainty how many customers were affected, what business lines were implicated and the full extent of the damage,” he told Sloan.
Sloan could not rule out the possibility of new scandals emerging, but said the changes implemented since he became CEO “are going to prevent them from occurring as best we can.”
“The reputational damage that our company has endured because of our mistakes has created significant damage...and it’s my job as CEO to make sure things change, and they are changing,” Sloan told the panel.
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Among the slew of ongoing federal investigations, the Office of the Comptroller of the Currency is reportedly weighing whether to force out top executives, the Wall Street Journal reported on Monday.
Sloan on Tuesday said the bank has held “no conversations about that topic” with the bank regulator.
Wells Fargo has paid billions in fines to settle allegations, including those that it made millions of phony accounts across all 50 states and the District of Columbia, and sold customers unnecessary auto insurance.
The hearing is the first in what is expected to be a series held by Waters to probe the health of the U.S. banking sector.
Next month, top executives of Morgan Stanley, Goldman Sachs, Citigroup, JPMorgan Chase and Bank of America are expected to appear in front of the panel.