Wells Fargo share price down 1% as Congress questions CEO

Enlarge this image

Enlarge this image

As Sloan sat before the House Financial Services Committee on Tuesday, Ocasio-Cortez told him: 'I am interested in the human rights abuses and environmental disasters that some say are financed by your bank, Wells Fargo'.

The CEO of beleaguered Wells Fargo told Congress Tuesday that the bank has cleaned up its act after a series of scandals that affected millions of customers. Rep. Maxine Waters (D-Calif.) chairs the committee and headed the hearing.

Criticism of Wells Fargo came from so many that Kentucky Republican Andy Barr opened his questions by expressing surprise: "I'm shocked that you're not in an orange suit and little jail cell today". The bank created 3.5 million fake accounts in 190,000 clients' names and charged them exorbitant fees.

Republicans and Democrats alike blasted Sloan and the bank.

In his opening remarks, Sloan said his company has done away with high-pressure product sales targets that encouraged workers to open unauthorized accounts.

"The reason we were one of the 17 or 19 banks that financed that is because our team reviewed the environmental impact and we concluded it was a risk we were willing to take", Sloan said.

At one point, McHenry, whose district includes the Charlotte metro area, asked Sloan, "Is this the end of scandal at Wells?" At his appearance before Congress, Sloan will promise that Wells Fargo won't engage in fraudulent behavior anymore.

"It's my job as CEO to make sure things change and they are changing", Sloan said. Sloan has faced calls to step down from investors and politicians, including U.S. Senator Elizabeth Warren, a 2020 Democratic presidential contender. He argued the San Francisco-based lender isn't too big to manage and categorically denied assertions in a New York Times article over the weekend.

Sloan has spent years attempting to fix the bank's image, including making regular visits to Capitol Hill. He said it had made contact with some 40 million customers and had paid tens of millions of dollars in restitution.

Aussie dollar falls as U.S., China delay trade meeting; sterling falls
Gold hit almost a two-week high as tepid United States economic data reinforced views the Fed would be patient on monetary policy. The U.S. dollar index, which measures the greenback against a basket of six rival currencies, was 0.43 percent lower at 96.515.

Sloan appeared to be caught off guard by the question and didn't answer it directly.

"And you refuse to let people go to court", Sherman countered.

In August 2018, Wells Fargo agreed to pay a $2 billion civil penalty to settle allegations the bank originated and sold mortgage loans that included false information in the years leading up to the financial crisis.

Stakes are high for 31-year Wells Fargo veteran Sloan, who was appointed CEO when John Stumpf retired soon after the sales practices scandal erupted in 2016. "Why should Wells Fargo continue to be the size that it is?"

"The sales incentives have changed, not disappeared", the Times wrote, citing current and former employees.

Meeks asked Sloan if he thought the downgrade was appropriate.

If lawmakers are unhappy with what they heard, they could pressure the Federal Reserve to maintain restrictions imposed on the bank's growth until governance and risk management improve.

Ocasio-Cortez went on to ask whether or not the financial institution was "liable for the damages incurred by local weather change" due to its financing of fossil gasoline firms, equivalent to reinvestment prices.

The CEOs of Morgan Stanley, Goldman Sachs Group Inc, Citigroup Inc, JPMorgan Chase & Co and Bank of America Corp are expected to appear before the House panel next month.

Latest News