Alexandria Ocasio-Cortez Grills Wells Fargo CEO Over Financing ‘Caging of Children’

  • Alexandria Ocasio-Cortez Grills Wells Fargo CEO Over Financing ‘Caging of Children’

Alexandria Ocasio-Cortez Grills Wells Fargo CEO Over Financing ‘Caging of Children’

Democratic and Republican lawmakers on Tuesday pressed Wells Fargo & Co Chief Executive Tim Sloan for proof the bank has put a string of consumer abuse scandals behind it at a tense congressional hearing that saw Sloan firmly on the defensive.

Sloan appeared before the House Financial Services Committee and was grilled by a number of folks in Congress about the company's myriad issues and scandals. She called Wells Fargo "a recidivist financial institution".

Sloan was also pointedly questioned by Rep. Brad Sherman of California about the bank's use of forced arbitration, even in cases where customers had accounts opened in their name without their knowledge.

"Because we don't operate the pipeline", he responded, "we provide financing to the company that's operating the pipeline".

Sloan said since taking over as chief executive, he's been working to "address the root causes" of the company's recent controversies. The bank has launched multiple marketing campaigns hoping to fix its reputation as the scandals continue to pile up, repeatedly reassuring investors of its great progress during quarterly earnings calls. He thanked lawmakers for letting him discuss "the progress we are making as we work to become the most customer-focused, efficient and innovative Wells Fargo ever".

"Each time a new scandal breaks, Wells Fargo promises to get to the bottom of it", McHenry said. "It promises to make sure it doesn't happen again".

Last year, the bank paid $1 billion to federal regulators to settle allegations it mistreated consumers.

Sloan said the bank has made amends. It's "rebuilding trust" by "putting our customers' needs first", he said.

"Congressman, our remediation for customers who were impacted by retail sales practices is extensive and comprehensive", Sloan answered. "You are telling them that they are stupid for wanting to go to court".

The 2016 revelation that Wells Fargo created millions of fake customer accounts prompted regulatory probes into mortgage foreclosures, auto insurance sales and its wealth management businesses, resulting in billions of dollars in fines.

Tensions also flared as Democrats including Carolyn Maloney of NY and Ayanna Pressley of MA demanded Wells Fargo stop providing financial services to the National Rifle Association and firearms companies.

"You've not been able to keep Wells Fargo out of trouble".

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

Asked about the report, Sloan said it was "inaccurate".

Sloan spoke as his bank remains under an unusual Federal Reserve measure imposed a year ago to restrict its growth.

In his response, Sloan announced that the bank is in the process of cutting ties with one group and has already stopped financing another-information that wasn't publicly known before the hearing.

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 committee next month.

Sloan defended Wells in the hearing, saying it has changed since what he called the "unauthorized account problem" in 2016, when the company admitted opening millions of phony customer accounts. The firm surveyed US banking customers in late 2018. Wells Fargo's 8.4 percent advance so far this year trails the KBW index's 14 percent jump and an 11 percent increase in the S&P 500.

Still, Beck doubted the House hearing would lead to more drastic penalties on Wells Fargo, like breaking up the bank.

Sloan said that the bank still did not know exactly how many accounts were opened without customers' consent. "But when you think about the wide range of issues they've had over the course of the last few years, and when you think about the relatively modest penalties they've received and the relatively modest changes they've made in light of those challenges. At the end of the day, these are just words".