CEO faces criticism from lawmakers

Wells Fargo’s CEO told angry lawmakers the bank is expanding its review of accounts.

WASHINGTON >> Wells Fargo’s CEO, newly stripped of tens of millions in compensation in a scandal over sales practices, told angry lawmakers Thursday the bank is expanding its review of accounts and will evaluate executives’ roles.

John Stumpf faced more bipartisan outrage from the House Financial Services Committee, following a grilling he received last week from a Senate panel.

“Fraud is fraud. Theft is theft,” committee head Rep. Jeb Hensarling, R-Texas, told Stumpf.

Stumpf reiterated his words of last week, that he was “deeply sorry.” He said the bank was looking at accounts further back, to 2009, and that bank executives’ roles will be reviewed “across the board” in an inquiry by Wells Fargo’s outside directors.

U.S. and California regulators have fined San Francisco-based Wells Fargo $185 million, saying bank employees trying to meet sales targets, opened up to 2 million fake deposit and credit card accounts without customers’ knowledge. Regulators said they issued and activated debit cards, and signed people up for online banking without permission. The abuses are said to have gone on for years, unchecked by senior management.

Stumpf came under a sustained assault from lawmakers, who face re-election in a little over a month. He insisted that Wells Fargo had taken actions prior to 2013 to bolster its legal compliance and maintain high ethical standards. He bristled at depictions of the culture of Wells Fargo — a bank with origins in the California gold rush — as elevating sales and profits at the expense of ethics.

“This is the behavior of people that we found, that we did not want,” Stumpf insisted.

Republican Representative Patrick McHenry, who represents North Carolina — where Wells has a very large presence due to its purchase of Wachovia in 2008 — was particularly incensed. “You have broken long-standing ethical standards inside the company.” McHenry said.

Stumpf noted new leadership at the retail bank business and the accelerated elimination of sales goals. He said no executives above the branch manager level appeared to be aware of the misconduct.

He also cited the compensation he must return. The Wells Fargo board said it is stripping Stumpf and the executive who ran the retail banking division of millions of dollars in pay. Stumpf, who earned $19.3 million last year, will forfeit $41 million in stock awards.

He also is giving up any bonuses for this year, as is Carrie Tolstedt, the former head of the retail operation. Tolstedt is forfeiting $19 million of her stock awards, and her planned departure was made immediate.

CLIFF OWEN — THE ASSOCIATED PRESS Wells Fargo CEO John Stumpf is sworn in on Capitol Hill in Washington, Thursday prior to testifying before the House Financial Services Committee investigating Wells Fargo’s opening of unauthorized customer accounts.