Wells Fargo CEO John Stumpf is expected to appear before the Senate Banking Committee today to face questions over allegations that employees of his bank opened or applied for more than 2 million bank accounts or credit cards without customers’ knowledge or permission.
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Stumpf will tell lawmakers that the illegal activity carried out was not part of any “orchestrated effort, or scheme, as some have called it, by the company”, New York Times wrote quoting the testimony.
When it comes to cross-selling, Wells Fargo used the slogan “Eight is Great”, according to the newspaper.
“Wrongful sales practice behavior goes entirely against our values, ethics, and culture and runs counter to our business strategy of helping our customers succeed financially and deepening our relationship with those customers”, Stumpf said. In an interview with Reuters in May, Trump said he would dismantle Dodd-Frank regulations because they made it harder for banks to grant loans.
Stumpf said the fake accounts cost the bank both money and satisfied customers.
The CEO of Wells Fargo has apologised for the bank’s years-long practice of opening as many as two million bogus customer accounts that generated fees for the lender.
Stumpf also said he does not plan to resign. This includes new compliance training programs, contacting all customers with inactive accounts to see if they really did open the accounts, and requiring consent from a customer before his or her credit is looked at for a new credit card.
The Wells Fargo CEO seemed caught off guard by the intensity of Warren’s comments and was barely able to get a word in. Some 5,300 Wells Fargo employees have been fired.
“It’s hard to imagine that top executives were unaware of a problem that involved thousands of the firm’s employees”, Clinton said, adding that compensation should take a hit if companies pay huge fines.
When Wells Fargo reached a $185-million settlement September 8 with federal and state regulators, it included settling a lawsuit brought by Los Angeles City Atty.
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Chief Executive John Stumpf said Tuesday the Wells Fargo board is “actively engaged” on the issue and that the board “has the tools to hold senior leadership accountable, including me and Carrie Tolstedt, the former head of our retail banking business”. The Justice Department also has started an investigation that could lead to civil or criminal charges. Also testifying will be James Clark, the deputy Los Angeles city attorney who brought the lawsuit that helped bring the scandal to light.
