Wells Fargo CEO expected to detail reforms

Bank trying to recover after accounts scandal

Wells Fargo CEO Timothy Sloan is expected to tell a Senate committee Tuesday that the San Francisco bank has made substantial progress in reforming itself following its accounts scandal.

Sloan will testify before the Banking Committee following the oneyear anniversary of the disclosure that bank employees, trying to meet onerous sales goals, created millions of accounts without customer permission.

“The past year has been a time of great disappointment and transition at Wells Fargo because we recognized too late the full scope and seriousness of the problems in our Community Bank,” Sloan says, according to a transcript of his prepared testimony released by Wells Fargo.

The committee has asked Sloan to appear before it to give a progress report on what actions the bank has taken since it was announced on

Sept. 9, 2016, that Wells Fargo would pay $185 million to regulators after admitting as many as 2.1 million unauthorized checking, savings, credit card and other accounts were created.

THEN-CEO John Stumpf appeared before the Senate committee and its House counterpart within a few weeks, during which his leadership and the bank were denounced. He was ousted shortly thereafter, and Sloan assumed the post on Oct. 13.

The initial estimate of possible unauthorized accounts was based on a review from 2011 to 2015. Since then, Wells Fargo expanded its review to 2009 through last year and has upped its estimate to 3.5 million.

It also has agreed to settle several class action lawsuits over the scandal for $142 million and, according to the testimony, is paying $6.1 million in direct refunds for charges and fees related to the unwanted accounts.

It’s been a year since the Wells Fargoscandalbroke—andnew problems are still surfacing.

Much of Sloan’s prepared remarks highlight actions and changes at the bank that have been previously reported or disclosed, including the adoption of a new employee incentive program based on customer service performance and the elimination of product sales goals for retail bankers.

Sloansaysthatthebankisonpace tohaveitsretailbranchesvisited 16,000 times by employees posing as customers — so-called “mystery shoppers.” Sloan added that he and other senior executive have visited more than 100 branch offices as part of the reform effort.

The bank reported last year it fired 5,300 employees over the sales practices, and the bank has since rehired 1,780 employees “who left the bank during those years,” according to the transcript.

Despite its reform effort, the scandal has taken a toll on the bank’s image. Wells Fargo has reported a decline in new retail account openings since last year. There also has been a steady stream of new disclosures that have further tarnished it.