Wells Fargo CEO gets grilled in Congress over its ‘ongoing lawlessness’

Wells Fargo Trails Bank Rally Before Tim Sloan's Big Day in Congress

Democratic and Republican lawmakers on Tuesday pressed Wells Fargo & Co Chief Executive Tim Sloan for proof the bank has put a string of consumer abuse scandals behind it at a tense congressional hearing that saw Sloan firmly on the defensive.

The congresswoman refused to accept Sloan's claim that despite Wells Fargo's financing and debt-financing of GEO Group and CoreCivic, "we weren't directly involved in that", before moving on to the bank's investments in fossil fuel-extracting companies which have worsened the climate crisis, trampled human rights, and endangered the country's drinking water supply.

He said one exit was finalized and the other was still pending, but he couldn't remember which was which.

Ocasio-Cortez followed up by asking: 'Why was the bank involved in the caging of children, and financing the caging of children to begin with?'

Because she amplifies questions that MOVEMENTS of people, like the #NoDAPL movement, have been shouting to the powers that be for ages.

"No, we're not", Sloan said.

"For a period of time, we were involved in financing one of the firms", said Sloan. We aren't anymore. I'm not familiar with the specific assertions that you're making, but we weren't directly involved in that'.

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.

"So, hypothetically, if there was a leak from the Dakota Access pipeline, why shouldn't Wells Fargo pay for the clean up of it since it paid for the construction of the pipeline itself?"

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A Wells Fargo spokesperson told Yahoo Finance Sloan doesn't feel additional pressure being the first CEO in the witness chair.

"Why did Wells Fargo finance this pipeline when it was widely seen to be environmentally unstable?"

"Again the reason we were one of the 17 or 19 banks that financed that is because our team reviewed the environmental impact and we concluded that it was a risk that we were willing to take", Sloan answered.

"The headlines generated by this week's hearing will undoubtedly be negative for Wells Fargo", KBW's Brian Gardner wrote in a note, as even some Republican committee members are likely to criticize the bank.

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

Sloan's prepared remarks emphasized changes the bank has made to culture, sales practices and risk management, as well as efforts to repay wronged customers.

The committee's ranking Republican Patrick McHenry made it clear that his party would not go soft on the country's fourth-largest US bank as they sought evidence it had remedied customer abuses.

Sloan said that the bank still did not know exactly how many accounts were opened without customers' consent. "But then a few months later we hear about another case of dishonest sales practices or gross mismanagement, another case of the consumer who has been harmed by the bank's business practices". 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.

Other scandals engulfing the biggest United States mortgage lender have included selling auto insurance and other financial products to customers who didn't need them; charging service members higher rates on loans than allowed by law; and improperly selling complex financial products to retail investors. Waters, who took control of the committee after Democrats won the House in the 2018 midterms, has pledged to more closely examine large banks.

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