Wells Fargo CEO hammered at congressional hearing

By Ovunc Kutlu

NEW YORK

Wells Fargo CEO John Stumpf was harshly criticized Thursday during his congressional testimony about the bank's illegal banking practices.

Before the House Financial Services Committee, Stumpf came heavily scrutinized about Wells Fargo’s employees opening millions of accounts and applying for more than half a million credit cards without authorization of customers, to boost sales volumes and meet sales targets.

Wells Fargo was fined $185 million by the Consumer Financial Protection Bureau (CFPB) for its illegal practices at the beginning of the month, but one lawmaker stressed that the bank's practices could not be solved by monetary penalties.

Bruce Poliquin, Republican representative from Maine, noted that Wells Fargo paid $11 billion in settlement costs over several years, and said, "I'm looking at this pattern of you folks ripping off customers, paying a fine and doing the damn thing over again.

“You ought to be ashamed of yourself."

Stumpf responded that the Wells Fargo board was made aware of the situation in 2011 and 2012, and its severity became clearer in 2013 when it was, however, still at an early stage of internal research. The CEO noted that the board was more active in 2015, and added, "We should have done more.”

"Can you really know what is going on at this bank?" Democratic Representative Maxine Waters from California asked.

"It strikes me how huge this bank is,” she said. “Wells Fargo should be broken up. It's too big to manage," she said as she blasted Stumpf for also being on the boards of retail giant Target and energy company Chevron, which gives him less time to manage Wells Fargo.

Dennis Heck, a Democratic Representative from the state of Washington, said he cannot understand how the bank's board does not see Stumpf is "no longer the correct" person to lead Wells Fargo.

Stumpf agreed Tuesday to forfeit his equity awards valued at around $41 million and not receive any bonuses for 2016, nor a salary until an internal investigation is complete, but he managed to keep his job.

“When are you going to resign?” asked a Texan Republican representative Roger Williams, who was surprised to see the number of 'I don’t know' responses Stumpf gave.

“I’m amazed what you don’t know about your business,” Williams said.

Stumpf noted, after a question, that he made between $18 million to $20 million in the last five years in bonuses.