Wells Fargo CEO Tim Sloan is expected to tell the Senate Banking Committee on Tuesday morning that he’s “deeply sorry” for the bank’s massive sales scandal, the latest effort by the company to make amends on Capitol Hill.
“Let me be very clear about this: I am deeply sorry for letting down our customers and team members,” Sloan said in prepared remarks obtained by the Observer.
“I apologize for the damage done to all the people who work and bank at this important American institution. When the challenges at Wells Fargo demanded decisive action, the bank’s leaders acted too slowly and too incrementally. That was unacceptable.”
Sloan is going to Washington a little more than a year after predecessor John Stumpf faced a grilling from lawmakers in appearances before the Senate panel and the House Financial Services Committee. Stumpf retired shortly after testifying before the House committee and was replaced Oct. 12 by Sloan, another Wells veteran.
Wells Fargo agreed in September 2016 to pay $185 million in fines to settle authorities’ claims employees opened accounts without customer knowledge as they pushed to meet high-pressure sales goals. The San Francisco-based bank has repeatedly apologized for the scandal and pointed to changes it’s made as it seeks to improve its practices.
In his five-page testimony, Sloan described the past year as having been “a time of great disappointment and transition” at Wells. He faulted the bank for recognizing “too late the full scope and seriousness of the problems in our community bank.”
But he also said Wells Fargo “is a better bank today than it was a year ago.” He pointed to moves the bank has taken to improve its practices, including getting rid of product sales goals for retail bankers and adopting a new customer-service approach” in the community bank.
“We are resolving past problems even as we make changes to ensure nothing like this happens again at Wells Fargo,” Sloan said. He added that the bank “will not stop until we restore our reputation and our customers’ trust, and make Wells Fargo the finest and most ethical company it can be.”
The 10 a.m. hearing comes as Wells has struggled to move past the issue, an effort made more challenging by revelations in August that the number of potentially fraudulent accounts could total 3.5 million, a nearly 70 percent increase over initial estimates. Wells has also come under scrutiny this year for revelations involving other businesses, such as auto insurance.
Federal officials and lawmakers also continue to criticize Wells for the sales scandal. Last month, Federal Reserve Chairwoman Janet Yellen called it “egregious and unacceptable” and said the regulator may take action against the bank.
On Friday, California Rep. Maxine Waters, top Democrat on the House Financial Services Committee and frequent Wells critic, released a report prepared for Democratic committee members that accused Wells of “a series” of “illicit customer abuses.” The report said Congress should pass legislation requiring regulators to revoke charters of banks that commit egregious consumer protection violations “and put them out of business.”
Sloan could face some of his toughest questioning from Sen. Elizabeth Warren, a Massachusetts Democrat who at one point accusing Stumpf of “gutless leadership” and told him he should resign and be criminally investigated.
In his testimony, Sloan referenced Stumpf’s appearances last year in Congress, saying that at the time his predecessor testified Wells “had not fully grappled” with the damage the scandal had caused. Wells Fargo “came to Congress without a good plan and all of you were right to criticize us,” Sloan said.
Sloan did not disclose any new steps the bank is taking to turn itself around. But he did say in the prepared remarks that since September 2016, the bank has hired back more than 1,780 employees who left during the years the scandal was taking place.
The Wells CEO will be on Capitol Hill the same day that the former chief executive of credit reporting company Equifax, Richard Smith, testifies before a House committee. Smith is expected to apologize for a massive data breach.