In testimony to the Senate Banking Committee Tuesday, Stumpf also said the bank plans to expand the internal review of accounts and refund process by two years, starting in 2009 now.
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Gearing up for a congressional hearing, five Democratic senators last week pressed the bank to “claw back” some pay in a compensation package promised to a departing Wells Fargo executive.
Stumpf has said the company’s board “has the tools to hold senior leadership accountable”, including himself and Carrie Tolstedt, the former head of the retail banking business.
In prepared testimony obtained by The Associated Press, Chief Executive John Stumpf says he is “deeply sorry” the bank failed to meet its responsibility to customers and didn’t act sooner to stem what he called “this unacceptable activity”.
WASHINGTON (AP) – The CEO of Wells Fargo apologized before harshly critical senators Tuesday for betraying customers’ trust in a scandal over allegations that employees opened millions of unauthorized accounts and moved money into them.
Fortune magazine pegged Tolstedt’s total stock and options from Wells Fargo at an estimated $125 million after years of the company bragging about “cross-selling ratios”, while CNBC put it at $95 million. Wells Fargo also fired 5,300 employees related to the scam.
It’s come out that, over a period of many years, Wells Fargo employees opened more than 2 million accounts and credit cards in people’s names without their permission, sometimes leading to overdraft fees or credit report problems unbeknownst to the customers.
He says, “If there ever were a textbook case of consumers needing protection, this was it”.
Robert Cordray, director of the CFPB, also is set to appear before the Senate Banking Committee, as will the Treasury Department’s Office of the Comptroller of the Currency and the Los Angeles City Attorney’s Office.
Stumpf told the panel earlier that he is committed to addressing “unethical sales practices” at the bank.
Wells Fargo has always been known in the banking industry for its aggressive sales goals. Stump indicated Tolstedt was pushed out after the bank determined she “did not do enough” to fix issues in the retail bank.
Under the settlement with regulators, it neither admitted nor denied the allegations.
Bank officials could not say Monday how many Floyd County customers might be affected by widespread practices of improper sales tactics at Wells Fargo & Co. It later said it plans to eliminate the sales targets by January 1.
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Stumpf offered some detail at the hearing about who was sacked, saying “bankers, bank managers, managers of managers, and even an area president”. But the statement fails to address why it took Wells Fargo so long to halt the behavior, where the checks and balances were applied, and what the repercussions will be for executives, Mayo said. They ranged in pay from about $35,000 to $65,000.
