John Stumpf may have hoped that Tuesday's hearing on Capitol Hill would mark a key turning point in Wells Fargo's blossoming scandal, but his harsh questioning by lawmakers — and his struggle to answer many of their questions — suggests that the embattled megabank's problems are just beginning.
"We believe this went worse than expected for Wells Fargo," wrote Jaret Seiberg, an analyst with Cowen Washington Research Group, in a note to clients. "We had thought that the change in tone over the last few days and the repeated apologies suggested the bank understood its precarious political position. We were wrong."
And there appears to be plenty more to come, including the results of criminal probes, another hearing this month by a different committee, and a search for additional victims who may have been harmed by Wells employees opening phony accounts.
Following is a guide to what's still coming.
Federal prosecutors in New York, California and North Carolina are all reportedly investigating how Wells Fargo employees set up as many as 2 million sham accounts between 2011 and 2015.
The Justice Department, which has been criticized for failing to prosecute big-bank executives in the wake of the financial crisis, last year laid out a series of measures aimed at strengthening its pursuit of individual corporate wrongdoing.
The Wells Fargo case is shaping up as a test case for the effectiveness of that new guidance.
More scrutiny by regulators
Comptroller Thomas Curry said at Tuesday's Senate Banking Committee hearing that his agency, which hit Wells Fargo with a $35 million penalty, is not finished with the case. Curry said that the Office of the Comptroller of the Currency is now focused on possible civil enforcement remedies against individuals.
"That would be personal cease-and-desist orders, civil money penalties against individuals, or ... prohibition from banking," he said. "That process is ongoing now."
In addition, Democratic Sen. Jeff Merkley asked the Securities and Exchange Commission on Tuesday to investigate whether Wells Fargo violated certain provisions of the Sarbanes-Oxley Act by not recognizing and stopping widespread fraud among its employees. An SEC spokesman declined to comment on that request.
Lawmakers also probed whether Wells should have disclosed the investigation as part of SEC filings. Stumpf claimed the phony account openings were not material, but lawmakers and regulators disagreed.
Wells' board makes decisions about whether to claw back pay
Stumpf came under heavy fire Tuesday for refusing to state an opinion about whether top executives should have bonus pay rescinded.
Stumpf is chairman of the Wells Fargo board, but he said that he is not a member of the firm's compensation committee, which is looking into the question of potential clawbacks.
"I'd want to be respectful of the committee and respectful of their process, and not in any way bias their decision," Stumpf said.
He also said that any actions that the company's 15-member board takes regarding named executive officers will be "appropriately disclosed."
The pressure on Wells Fargo to claw back bonus pay is coming not only from lawmakers, but also from investors.
Mike Mayo, a banking analyst at CLSA, said Tuesday that clawbacks are warranted, based on the policy the company laid out in its proxy statement.
"It says if there is significant reputational harm, that's grounds," Mayo said in an interview with Bloomberg News. "So if it doesn't apply now, when would it apply?"
More scrutiny by lawmakers
The House Financial Services Committee is planning to hold its own hearing on Wells Fargo later this month. Stumpf, the company's embattled chief executive officer, is expected to be called to testify again.
House lawmakers will likely have more information at their disposal than their Senate counterparts did. The House committee, chaired by GOP Rep. Jeb Hensarling, has asked for interviews before the end of the month with Wells Chief Financial Officer John Shrewsberry, Chief Operating Officer Timothy Sloan, Chief Risk Officer Michael Loughlin and the former community banking chief, Carrie Tolstedt.
"The stakes will be even higher when the House Financial Services Committee holds its hearing," Seiberg wrote. "The issue will be whether the bank has answers on claw backs, bonuses and employment that can satisfy lawmakers."
The Senate Small Business Committee, chaired by Republican Sen. David Vitter, also launched an investigation on Tuesday, even though no evidence has emerged that Wells Fargo employees established any phony business accounts.
In addition, the California Assembly's banking committee is planning to hold its own hearing on Oct. 11 in Los Angeles. Stumpf said Tuesday that while the problems uncovered at Wells occurred in different parts of the country, they were focused in the Los Angeles area.
Wells looks back even further
The San Francisco-based bank initially determined, based on the work of a consulting firm, that as many as 2 million sham accounts may have been created by Wells employees between 2011 and 2015. The firm agreed to $5 million in remediation to customers.
But at Tuesday's hearing, Stumpf pledged to extend the company's account review and remediation process two years further to include 2009 and 2010.
That announcement prompted Sen. Sherrod Brown to ask Stumpf why the bank is stopping at 2009. The Ohio Democrat alluded to allegations that Wells Fargo has had a pressure-filled sales culture for an even longer period of time.
"We agreed with our regulators in our agreements to go back to 2011," Stumpf responded. "We made a decision to go back to 2010 and '09, and we want to make it right by any customer."
"Does that mean you're willing to go back earlier than 2009?" Brown asked.
"I can't tell you that today. I have to talk to our folks. I don't know about … records and so forth," Stumpf responded.