Published: Fri, March 15, 2019
Economy | By

Alexandria Ocasio-Cortez Grills Wells Fargo CEO Over Financing ‘Caging of Children’

Alexandria Ocasio-Cortez Grills Wells Fargo CEO Over Financing ‘Caging of Children’

Wells Fargo came under blistering congressional scrutiny Tuesday in the wake of a series of consumer-related scandals.

On Tuesday, Rep. Katie Porter (D-Calif.) flagged these quotes from filings in an ongoing class-action lawsuit against Wells Fargo that alleges the company hurt shareholders by hiding its auto repossession scandal from the public in the months after the fake-account scandal.

"Wells Fargo's ongoing lawlessnness and the failure to right the ship, suggests the bank ... is simply too big to manage", she added.

Asked about the report, Sloan said it was "inaccurate".

"Wells Fargo is a better bank than it was three years ago, and we are working every day to become even better", Sloan, 58, read from his written testimony.

Sloan said that the bank had changed pay packages that were tied to extremely aggressive sales targets. Even as Sloan was telling the world it would "leave no stone unturned" and "be very transparent" with investors, he had in his hands a report from independent consultants indicating that the bank had been forcing bogus insurance on its customers, which had resulted in a wave of vehicle repossessions. "Our constituents should be able to trust their own bank".

In a tweet Monday, Waters said she "will be confronting Wells Fargo" during the hearing.

"So you're smart, they're dumb, you have their best interests at heart", Sherman said. Warren recently wrote a letter to Fed Chairman Jerome Powell, saying the Fed should not lift the growth restriction on Wells Fargo until Sloan is ousted.

McHenry asked Sloan whether the bank might disclose more instances of consumer abuses in the future.

At the hearing, Porter asked Sloan whom Congress should believe: Sloan when he says he's fixed things, or his lawyers who say he's just resorting to puffery. The bank has apparently made little progress in winning over lawmakers.

The Office of the Comptroller of the Currency, in its latest findings on Wells' compliance with the act, downgraded the bank to "needs to improve" due to previously issued regulatory consent orders.

"Each time a new scandal breaks, Wells Fargo promises to get to the bottom of it", he said. The bank has almost $2 trillion in assets, more than 260,000 employees and 70 million customers.

Sloan answered: 'Our team reviewed the environmental impact and we concluded that it was a risk that we were willing to take'.

Stumpf retired almost two weeks after his grilling before that committee, which was chaired by Texas Republican Jeb Hensarling.

The committee, led by bank critic Maxine Waters, has several freshmen Democrats who took swipes at Sloan including Alexandria Ocasio-Cortez, a leading voice of her party's progressive wing, and Ayanna Pressley, who likewise bashed corporate America during her campaign.

She quickly pivoted to whether Wells Fargo should have to pay for environmental clean-up when one of the projects the bank financed, like the Dakota Access Pipeline, goes awry.

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.

The confrontation with lawmakers underscored how far Wells Fargo has yet to go to win back the public 30 months after it was fined for opening millions of bogus accounts for consumers. 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. "Solving past problems is not enough", he said.

This is a developing story.

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