Angry Congress wants change in bank’s culture, doesn’t see it
A different Wells Fargo CEO met a similar kind of anger from Congress on Tuesday, with politicians from both major parties saying they feel the bank has done little to change its culture since a scandal over its sales practices.
Tim Sloan appeared in front of the Senate Banking Committee in Washington, D.C., about a year since his predecessor did the same to try to explain how employees trying to meet ambitious sales goals created millions of accounts without customers knowing about or authorizing them.
Sloan apologized again and said the bank was committed to its customers. Some lawmakers weren’t in a forgiving mood. Sen. Heidi Heitkamp, a Democrat from North Dakota, expressed anger about the sales practices as well as a later auto insurance scandal involving customers signed up for coverage they didn’t want.
“We need to see a cultural change,” Heitkamp said. “I simply don’t hear it. We hear you say, ‘We don’t know! We will look into it! We care about the consumer!’ but I do not hear a level of cultural change that satisfies me today.”
Republicans were at times equally as upset.
“At least, we are irritated at Wells Fargo,” said Sen. Tim Scott, a Republican from South Carolina.
While Sloan said he remains “deeply sorry” for its previous sales practices, he was at times combative and defensive.
In particular, he strongly defended Wells Fargo’s practice of sending its customers into what’s known as forced arbi-
tration, which is when customers have to use a third party to resolve their disputes instead of filing a class-action lawsuit with others.
Since last fall, Wells has changed its sales practices, ousted other executives and called tens of millions of customers to check on whether they truly opened the accounts.
“I apologize for the damage done to all the people who work and bank at this important American institution,” Sloan said.
Democratic Sen. Elizabeth Warren of Massachusetts, a vocal critic of Wells Fargo, called for Sloan’s firing.
One critique of Sloan, a 29-year veteran of the bank, has been that he was the chief financial officer while the fake accounts were being created. Wells Fargo and Sloan himself have defended his role, saying he was not supervising the consumer banking division at the time and therefore was not responsible for what occurred there.
“At best you are incompetent, at worst you were complicit,” Warren said. “And either way, you should be fired.”