Wells Fargo CEO avoids major stumble at heated congressional hearing

WASHINGTON DC- FEBRUARY 07 U.S. Rep. Alexandria Ocasio Cortez speaks during a news conference at the East Front of the U.S. Capitol

Alexandria Ocasio Cortez Attacks Wells Fargo CEO for Funding the Dakota Access Pipeline Alex Wong Getty Images12 Mar 2019

Alexandria Ocasio-Cortez accused Wells Fargo Tuesday of being "involved" in family separations at the border because of the bank's prior financing of groups that run private prisons.

Wells Fargo CEO and President Tim Sloan told the committee the bank is compensating customers who had been harmed, strengthening risk management and internal controls, and improving the culture at the consumer banking giant. "Again, is Wells Fargo too big to manage?"

During a hearing on Wells Fargo's business practices in the House Oversight Committee, Ocasio-Cortez demanded to know why "the bank [was] involved in the caging of children".

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.

Just before she ran out of time, Ocasio-Cortez questioned why Wells Fargo agreed to finance it "when it was widely seen to be environmentally unstable".

Sloan said that the bank had changed pay packages that were tied to extremely aggressive sales targets. At one point he claimed that "no institution in this country has done more for diverse communities than Wells Fargo" ― quite a claim for a bank that has been separately sued by the cities of Chicago, Baltimore, Miami and Philadelphia for targeting black and brown borrowers with predatory loans.

Watching @AOC watch questions of #WellsFargo CEO that people like me have dreamed of being asked from a Congressional hearing.

Still, some Republican lawmakers acknowledged the bank's efforts, with representative Sean Duffy saying that his colleagues had been too harsh on the CEO.

The hearing comes as Wells Fargo, which has a large presence in Charlotte, remains under intense scrutiny from federal authorities and lawmakers in the wake of the 2016 scandal and newer instances of customer harm.

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The CEO has faced calls to step down from investors and politicians, including U.S. Senator Elizabeth Warren, a 2020 Democratic presidential contender. "All the changes that you have said that you made are not evident and you do not have the kind of customer satisfaction that you are alluding to".

Sloan, who made $60.4 million working for the bank before the fake-account scandal broke in 2016, has been saying this kind of thing for years now.

The Federal Reserve took unprecedented action on Wells Fargo's business in February of 2018, forcing the bank to replace four of its directors and capping its growth until the bank developed better risk-management practices.

"I don't know how to answer that question because we weren't", Sloan responded.

More than two years after Wells Fargo & Co. erupted into scandals, Chief Executive Officer Tim Sloan returned to Capitol Hill to lay out his efforts to clean up the mess.

Sloan spoke as his bank remains under an unusual Federal Reserve measure imposed a year ago to restrict its growth.

"We are poised to have significant hearings" said Waters at a recent press conference, adding she would not hesitate to bring "bad actor" CEOs before her committee.

After the hearing, the Office of the Comptroller of the Currency, which previous year fined Wells Fargo $1 billion for faulty mortgage and insurance products, echoed comments made by its head in October that the bank still had much work to do to.

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