Following the release of a Majority staff report entitled, “The Real Wells Fargo: Board & Management Failures, Consumer Abuses, and Ineffective Regulatory Oversight,” Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, convened a full Committee hearing with Charles W. Scharf, Chief Executive Officer (CEO) and President of Wells Fargo & Company.
See the Chairwoman’s opening statement at today’s hearing below.
Today, Wells Fargo’s CEO, Charles Scharf, will testify before the Committee about how he plans to end Wells Fargo’s egregious pattern of consumer abuses. He is now the third Wells Fargo CEO to testify before this Committee in less than 3 and half years.
I will note that each time a Wells Fargo CEO has testified before this Committee that he has resigned soon thereafter. Mr. Scharf, you have taken on a massive challenge. While I wish you luck, it is clear to this Committee that the bank you inherited is essentially a lawless organization that has caused widespread harm to millions of consumers throughout the nation.
Wells Fargo has:
- opened 3.5 million fraudulent accounts in their customers’ names, which cost consumers over $6 million;
- charged customers for auto insurance policies they did not need, resulting in some consumers losing their cars;
- engaged in illegal student loan servicing practices;
- charged consumers inappropriate overdraft fees;
- overcharged veterans for refinance loans; and,
- fraudulently sold complex financial products to retail investors.
Last week, the Committee released a Majority staff report on Wells Fargo’s compliance with five consent orders issued in response to the company’s widespread consumer abuses and compliance breakdowns.
Among the disturbing findings uncovered in the report is that the Office of the Comptroller of the Currency is aware of dozens of cases at Wells Fargo where the number of consumers or customer accounts requiring remediation for a consumer abuse exceeds 50,000 or the amount of harm exceeds $10 million. I am very concerned that the bank’s pattern of harming its consumers appears to persist.
The Majority’s staff report also uncovered notes from a May 2019 Federal Reserve meeting with Wells Fargo reflecting that a senior Wells Fargo executive stated “if he were CEO, he would not allow the addition of any new customers to the company since the firm is operating in this environment.”
Based on the findings of the Majority staff report, I agree with the sentiment that Wells Fargo isn’t ready to be America’s bank again. And this is the challenge before you, Mr. Scharf. You must not only rebuild this institution, you must also rebuild America’s trust in it.
And that begins with your testimony today. When your predecessor testified before this Committee, he gave inaccurate and misleading testimony. I urge you not to follow his example but to be transparent and honest.
This hearing is the first of several the Committee is convening to hold Wells Fargo accountable. As part of this oversight, we will be looking at legislation to do just that. While the Federal Reserve’s asset cap was a good start, it didn’t seem to change the bank’s behavior. Accordingly, we will discuss a number of bills that would compel further action by regulators and rein in abusive megabanks like Wells Fargo to hold them ─ including their management and boards ─ accountable for their actions.