Wells Fargo CEO Accused By Ocasio- Cortez

15 March, 2019, 13:27 | Author: Regina Silva
  • WASHINGTON DC- FEBRUARY 07 U.S. Rep. Alexandria Ocasio Cortez speaks during a news conference at the East Front of the U.S. Capitol

Wells Fargo & Co. was underperforming the broader KBW Bank Index as Chief Executive Officer Tim Sloan prepared to appear before a House committee on Tuesday, which is set to probe what it describes as a "pattern of consumer abuses".

The hearing comes as Wells Fargo, which has a large presence in Charlotte, remains under intense scrutiny from federal authorities and lawmakers in the wake of the 2016 scandal and newer instances of customer harm.

Rep. Patrick McHenry, the ranking Republican on the committee, noted that after one scandal has erupted at Wells Fargo another followed. "It's my job as CEO to make sure things change, and they are changing", he said before a House panel convened to examine the company's record of consumer abuses.

"We continue to be disappointed with Wells Fargo Bank N.A.'s performance. and its inability to execute effective corporate governance and a successful risk management program", said OCC spokesman Bryan Hubbard. The bank has almost $2 trillion in assets, more than 260,000 employees and 70 million customers.

Tensions also flared as Democrats including Carolyn Maloney of NY and Ayanna Pressley of MA demanded Wells Fargo stop providing financial services to the National Rifle Association and firearms companies. Along the route they will demand that Wells Fargo invest instead in clean-energy solutions to the climate crisis with chants, singing and street theater.

He also said the bank had paid back all customers hit by improper mortgage rate-lock fees and gave a similar answer about auto insurance remediation.

Sloan said he believed the bank was serving its 70 million customers very effectively and he reiterated the changes the bank has made since he took over. The assertions "are just wrong", Sloan said.

Sloan responded by saying that Wells Fargo was terminating relationships with two private prison companies, GEO Group and CoreCivic, both of which have been involved with immigration detention.

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Waters in her testimony said the Fed's punishment had not changed the bank, adding that "regulators seem unwilling to take forceful actions".

Wells Fargo posted a $22.4 billion profit in 2018 and sent its shareholders an additional $20 billion in the form of stock buybacks.

"I don't know how you'd calculate that, Congresswoman", Sloan said.

Still, Beck doubted the House hearing would lead to more drastic penalties on Wells Fargo, like breaking up the bank.

Questioning Sloan about its financing of companies that build pipelines including the Dakota Access Pipeline (DAPL) in South Dakota and the Keystone XL Pipeline, Ocasio-Cortez asked whether his bank should be held responsible for the environmental havoc wreaked by its investments.

The Dakota Access Pipeline moves more than 500,000 barrels of oil a day.

Following the revelation that employees opened millions of accounts without customers' permission to meet sales goals, issues have emerged in consumer-lending, wholesale and wealth-management units. And the New York Times over the weekend questioned the bank's efforts at reform and highlighted worker frustrations. The bank has launched multiple marketing campaigns hoping to fix its reputation as the scandals continue to pile up, repeatedly reassuring investors of its great progress during quarterly earnings calls.

Stephen Beck, founder of the CG42 management consulting firm that advises banks among other industries, said a study conducted by his company belies that claim.

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