âIt appears that the company just canât make it through even this congressional hearing without us learning more and more information about what is going on at Wells Fargo,â Representative Maxine Waters, a Democrat of California, said as word began to spread of the coming sanctions over military lending.
But Mr. Stumpf â whom the members of the House committee personally blamed for the persistent and widespread misdeeds â stuck to the same script he has used throughout the crisis. The problem, he explained, was an ethical lapse among the 5,300 employees, most of them low-level bankers and tellers, who had been fired for their actions since 2011.
At the hearing on Thursday, Mr. Stumpf apologized repeatedly for his bankâs failings and repeated his earlier pledge â given last week to the disgruntled Senate Finance Committee â to accept âfull responsibilityâ for them. But he again rejected lawmakersâ attempts to cast the scandal as a consequence of broader failings in Wells Fargoâs leadership and corporate culture.
âI led the company with courage,â Mr. Stumpf said, while admitting that the company âshould have done more soonerâ to address the problem of unauthorized accounts being created by employees in the names of real customers.
Nine days ago, the leader of Wells Fargo faced a skeptical Senate committee for more than two hours. Today, he was denounced for more than four hours at a House panel.
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After the Senate hearing and before the House hearing, the board of directors of Wells Fargo agreed to claw back $ 41 million of Mr. Stumpfâs unvested stock awards, deny him his annual bonus and strip away a portion of his $ 2.8 million base salary. Mr. Stumpf said he approved of the decision. Carrie L. Tolstedt, who until recently ran the Wells Fargo retail banking operation, will lose $ 19 million in compensation.
Confronted by the lawmakers with evidence that the practice of setting up phony accounts to meet sales goals might have gone back much further than the bank has admitted, perhaps to 2007, Mr. Stumpf said that Wells Fargo was continuing to investigate the extent of the problem, how far back it stretched and who knew.
But those steps did not appease the lawmakers. Several called for Mr. Stumpfâs resignation, and others asked why he shouldnât be jailed, like a bank robber.
âSomething is going wrong at this bank, and you are the head of it,â said Gregory Meeks, Democrat of New York, adding, âYou should be fired.â
Mr. Stumpf replied, âI serve at the pleasure of the board.â Mr. Stumpf is the board chairman.
Mr. Meeks, at times pounding the table for emphasis, asked if Mr. Stumpf would have set free someone who had robbed a Wells Fargo Bank, then simply apologized and taken responsibility. Criticizing Wells Fargoâs âcriminal activity,â Mr. Meeks said: âYour bank, Wells Fargo, has given the entire financial services industry a black eye.â
âTo the American people, this kind of feels like dÃ©jÃ vu all over again,â said Representative Jeb Hensarling, the Texas Republican who is chairman of the committee. âSome institution is found engaging in terrible activities. There is a headline, fine, and yet no one seems to be held accountable.â
As Mr. Stumpf testified, a video screen on the hearing roomâs wall displayed a scroll of more than a dozen fines Wells Fargo has paid in recent years, totaling more than $ 10 billion. The list included penalties for subprime loan abuses, discriminating against African-American and Hispanic mortgage borrowers, and foreclosure violations, among others.
Mr. Hensarling asked whether such fines are simply the âcost of doing business.â
Mr. Stumpf answered no, adding, âI donât want our culture to be defined by these mistakes.â
Wells Fargo has been in crisis mode since it acknowledged this month that its employees had, over the course of several years, opened as many as 1.5 million bank accounts and 565,000 credit card accounts that may not have been approved by customers. The company agreed to pay $ 185 million in penalties and fines to settle cases brought by federal regulators and the Los Angeles city attorney.
Wells Fargo has said it is contacting all of the customers who may have been affected. So far, the bank has contacted 20,000 customers with questionable credit cards. About a quarter of them have said that they did not apply for the card or could not remember if they had, Mr. Stumpf said at the hearing.
He also said that Wells Fargo would eliminate its product sales goals for retail bankers by the end of the week, accelerating the bankâs previously announced plan to drop them by the start of next year. Ex-employees say those sales goals led to intense pressure on workers to cheat to fulfill unrealistically high quotas.
Mr. Stumpf carried with him a binder filled with material to help him form his answers, and he consulted it repeatedly as lawmakers questioned him about how many customers with potentially unauthorized accounts had been affected in their own home states. He reeled off the answers: Texas, 149,857; Missouri, 1,191; Delaware, 4,255.
The plight of Wells Fargo workers who lost their jobs for not meeting sales goals came up several times during the hearing, with lawmakers citing personal experiences from their constituents. Representative Nydia M. VelÃ¡zquez, Democrat of New York, asked how many workers Wells Fargo had fired for falling short.
âMy understanding is that people should not be fired, terminated for missing sales goals,â Mr. Stumpf answered. âIâm not saying it didnât happen. Weâre doing a review of whatever, whoever might have been terminated for that.â
As for those who did take the fall for the illegal account openings, Representative Brad Sherman, a Democrat of California, was particularly acerbic. âYou fired 5,300 people,â he said at the hearing. âYou took 5,300 good Americans and turned them into felons.â It is time, he concluded, to break up the big banks.