Wells Fargo's Sloan to Congress: 'We are taking responsibility'
WASHINGTON— Ahead of his testimony to Congress, Wells Fargo CEO Tim Sloan said that the megabank has worked to address past issues and is equally committed to preventing new problems from arising.
His written testimony, released by the bank on Monday, comes amid new claims that employees of the $1.9 trillion-asset bank are still under immense pressure to squeeze as much money as possible from customers, even after the company has publicly acknowledged that thousands of employees opened potentially millions of fake bank accounts in order to meet aggressive sales goals.
“We have gone above and beyond what is required in disclosing these issues in our public filings, we have worked to remedy these issues, and, most importantly, we have worked to address root causes that allowed them to occur in the first place,” Sloan said in his written testimony to the House Financial Services Committee. “As a result, Wells Fargo is a better bank than it was three years ago, and we are working every day to become even better.”
Sloan cited several changes the bank has made to address the phony-accounts scandal and other issues, including centralizing its enterprise control functions, enhancing front-line risk, independent risk management and audit to improve internal oversight and adding 3,000 new risk professionals. Those changes and more were detailed in a 103-page report that was released in January.
“We are taking responsibility not just for any fees customers should not have been charged, but also for related effects such as impacts on credit scores,” Sloan said. “Our guiding principle has been to err on the side of our customers, and we are taking an overinclusive approach in doing so.”
Sloan also emphasized Wells Fargo’s efforts to substantially reform its corporate culture, including eliminating the product sales goals that contributed to the creation of unauthorized accounts and the implementation of a “performance evaluation system that prioritizes serving customers and managing risk.”
However, his comments come amid new reports of trouble. The New York Times reported Saturday that Wells Fargo employees continue to skirt internal rules in order to meet performance goals, which they claim haven’t been eliminated.
Democratic lawmakers are expected to grill Sloan on the San Francisco-based bank’s practices at a highly anticipated Tuesday hearing. House Financial Services Chair Maxine Waters, D-Calif., introduced legislation in 2017 outlining a process to break apart systemically important big banks that engage in widespread consumer abuse.