Washington Post
- Wells Fargo CEO Tim Sloan is testifying before Congress about the bank’s progress as it works through scandals.
- Sloan will appear before the House Committee on Financial Services, chaired by Democrat Maxine Waters.
- Democrats are expected to grill the CEO on the company’s response to several major scandals involving customer sales abuses.
- Watch Wells Fargo trade live.
Wells Fargo CEO Tim Sloan will testify before the House Committee on Financial Services about the company’s response to a slew of scandals related to the bank’s sales practices over the past several years. Democrats, newly in charge of the committee, asked Sloan to make a solo appearance.
The San Francisco-based bank has been in discussion with regulators to resolve a number of issues including the opening of some 1.5 million unauthorized deposit accounts and 565,000 unauthorized credit-card accounts. Those actions were attributed to Wells Fargo’s aggressive sales practices. The company announced it would end sales quotas for employees on January 1, 2017.
In 2016, the bank’s former CEO, John Stumpf, resigned six weeks after being grilled by Congress in response to the scandals. Current CEO Tim Sloan is expected to face significant pressure as Democrats showcase their more aggressive stance on financial regulations as compared to Republicans, who previously led the Committee.
In response to the widespread customer abuses, the Federal Reserve took the unprecedented step of ordering the bank to restrict its growth until there was an improvement in governance and controls. In Wells Fargo’s fourth quarter earnings call, Sloan indicated the growth cap would remain in place until at least the end of this year.
US senator and presidential candidate Elizabeth Warren has previously called for Sloan to be ousted. She sent a letter to Federal Reserve Chairman Jerome Powell repeating her call for the CEO’s ouster before the growth cap was lifted.
"While we have more work to do, we’ve worked hard over the past two years to address the root causes of our mistakes, make things right for team members and customers, and lay the foundation for a better company," Sloan said ahead of the testimony.
He will also appear as part of a joint testimony to be scheduled in the coming weeks with five other CEOs of major US banks.
Wells Fargo shares have fallen 14% this year.
Business Insider
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Source: Business Insider – areddy@businessinsider.com (Arjun Reddy)