Wells CEO to face Congress, a year since sales scandal broke
Posted October 2
NEW YORK — Wells Fargo's chief executive will face Congress saying the bank remains "deeply sorry" for its previous sales practices, and that in the year since the scandal over them exploded it has substantially changed for the better.
The prepared comments from Tim Sloan come ahead of his scheduled appearance in front of the Senate Banking Committee on Tuesday, about a year since his predecessor did the same and was grilled about the sales practices.
Wells Fargo has said that 3.5 million accounts were potentially opened without customers' permission between 2009 and 2016, as employees tried to meet ambitious sales targets. People may have had different kinds of accounts in their names, so the number of customers affected may differ from the account total.
The scandal was the biggest in Wells Fargo's history. Sloan's predecessor, John Stumpf, testified twice in front of Congress last fall. His poor performance was widely chastised, and the scandal led to his ouster. The bank's once-sterling industry reputation was in tatters, and it ended up paying $185 million to regulators and settled a class-action suit for $142 million.
"I apologize for the damage done to all the people who work and bank at this important American institution," Sloan said in his prepared comments.
Most of the questioning tomorrow is likely to be focused on the ways that Wells Fargo has amended its sales culture.
In response, Sloan is likely to talk about new managers have been trying to amends with customers, politicians and the public. 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.
But other issues have surfaced, including that hundreds of thousands of customers were signed up for and billed for car insurance that they didn't need or necessarily know about.
Wells Fargo is also still under several investigations for its sales practices problems, including a congressional inquiry and one by the Justice Department.