CEO Says Wells Fargo Has Transformed After Scandals; Lawmakers Are Skeptical

Congresswoman Alexandria Ocasio-Cortez

Congresswoman Alexandria Ocasio-Cortez

Other scandals engulfing the biggest US mortgage lender have included selling auto insurance and other financial products to customers who didn't need them; charging service members higher rates on loans than allowed by law; and improperly selling complex financial products to retail investors.

On the issue of Wells Fargo's relationship with the private prison industry and the Trump administration's child detention policy, Ocasio-Cortez asked sharply: "Mr. Sloan, why was the bank involved in the caging of children?" "Since 2016 the bank has entered into settlements with every single one of its federal regulators", McHenry said.

Ocasio-Cortez followed up by asking: 'Why was the bank involved in the caging of children, and financing the caging of children to begin with?' He also said the bank had paid back all customers hit by improper mortgage rate-lock fees and gave a similar answer about auto insurance remediation.

'I don't know how to answer that question because we weren't, ' he said. We aren't anymore. I'm not familiar with the specific assertions that you're making, but we weren't directly involved in that'. Sloan promised that he has made "fundamental changes" at the bank and its problems have been "fixed".

"What's more, this conduct appears to persist, with The New York Times reporting Saturday that Wells Fargo's employees continue to see internal rule-breaking to meet aggressive sales goals", Waters said.

Rep. Alexandria Ocasio-Cortez (D-N.Y.) tried to grill the CEO of Wells Fargo during his testimony before Congress on Tuesday but it resulted in embarrassing video for the upstart freshman congresswoman.

"With all of this experience and the length of time that you have been there, the roles that you have played, you have not been able to keep Wells Fargo out of trouble, you keep getting fined", panel Chairwoman Maxine Waters, D-Calif., said.

"Wells Fargo's ongoing lawlessness and failure to right the ship suggests the bank - with approximately $1.9 trillion in assets and serving one in three US households is simply too big to manage", Waters said.

At one point, McHenry, whose district includes the Charlotte metro area, asked Sloan, "Is this the end of scandal at Wells?"

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

Wells Fargo's CEO Tim Sloan is sworn in before testifying in a House Financial Services Committee hearing titled: "Holding Megabanks Accountable: An Examination of Wells Fargo's Pattern of Consumer Abuses" in Washington, U.S. March 12, 2019.

And the Federal Reserve has not yet removed the unprecedented asset cap it placed on Wells Fargo in early 2018 for "widespread consumer abuse". Beck said Wells Fargo customers were the most likely to abandon their bank.

Other scandals engulfing the biggest United States mortgage lender have included selling auto insurance and other financial products to customers who didn't need them; charging service members higher rates on loans than allowed by law; and improperly selling complex financial products to retail investors. Sloan said that customers' concerns were being addressed and that they didn't need to go to court. The committee is also expected to hold a separate hearing with the CEOs of other big banks, such as Jamie Dimon of JPMorgan Chase, soon.

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