A little more than a year ago, Wells Fargo’s then-CEO John Stumpf faced blistering questioning from members of Congress over the bank’s fake accounts scandal. On Tuesday, the company’s new chief executive, Tim Sloan, gets his turn on Capitol Hill.
Sloan is set to testify at a 10 a.m. hearing, “Wells Fargo: One Year Later,” before the Senate Banking Committee, whose members include firebrand Elizabeth Warren, a Massachusetts Democrat. Sloan was promoted to replace Stumpf, who resigned in October amid public furor over the scandal and following two congressional hearings during which lawmakers were dissatisfied with some of his responses.
In a statement, Wells Fargo said it “welcomes the opportunity to further update the committee about the progress Wells Fargo has made over the last year.” Since news of the scandal broke last September, Wells “has taken numerous important steps to fix issues, make things right for our customers and build a better bank.”
Here are five things to watch for Tuesday:
1. What will Elizabeth Warren do?
During Stumpf’s appearances, Warren provided some of the harshest criticism of the chief executive, at one point accusing him of “gutless leadership” and telling him that he should resign and be criminally investigated. In recent months, Warren has continued to berate the bank over the scandal as well as newer problems Wells has disclosed in other areas, such as auto insurance. Warren has also continued to urge the Federal Reserve to remove Wells Fargo board members in place while the scandal was going on. It’s unclear what other lawmakers might do Tuesday, but it’s likely Warren will again ask tough questions.
Sen. Elizabeth Warren called on Wells Fargo CEO John Stumpf to step down during a Sept. 20 Senate Banking Committee hearing for his role in the bank's unauthorized accounts scandal.
2. Will Sloan be better prepped?
Stumpf’s inability to answer some questions, such as how many employees blew the whistle and whether bonuses varied by branch, frustrated lawmakers. During a House Financial Services Committee hearing, Roger Williams, R-Texas, told Stumpf that he’d heard “more I-don’t-knows from a CEO than I’ve ever heard in my life.” During an earlier Senate Banking Committee hearing, Stumpf irritated lawmakers by repeatedly noting the misdeeds were carried out by just 1 percent of employees in Wells’ community banking operation. Reuters reported this week that the bank hired a new law firm to help prepare Sloan; A Wells spokesman would not comment.
Wells Fargo CEO John Stumpf testified Tuesday before the Senate Banking Committee Tuesday, saying he was "deeply sorry" for the unauthorized opening of customer accounts that resulted in the bank paying $185 million in fines. Here are highlights o
3. Will there be more revelations?
Since the scandal erupted more than a year ago, new revelations about the matter have surfaced, such as Wells’ disclosure in August that the number of potentially fake accounts could be nearly 70 percent higher than initial estimates. Among other things, the company has also come under scrutiny this summer for its auto-insurance practices. It’s unclear whether fresh revelations about those or other matters will be disclosed Tuesday.
4. Will the hearing help or hurt Wells?
Some analysts panned Stumpf’s performance before Congress, and the CEO abruptly announced his retirement about two weeks after his second round of testimony. Jaret Seiberg, an analyst with Cowen and Co., wrote in a report this week that a bad performance by Sloan will pressure Wells’ board to make even more changes. “If Sloan can push back on Warren, despite a format that works to her advantage, then this could help the bank get out of the spotlight,” Seiberg wrote.
5. More hearings to come?
So far, Sloan is only scheduled to appear before a Senate panel. But if House Democrats have their way, he’ll testify before them, too. In August, California’s Maxine Waters and two other Democrats sent a letter to House Financial Services Committee Chair Jeb Hensarling asking for a hearing into Wells. The letter described “seemingly never-ending developments” at the bank, “that clearly warrant committee scrutiny.”