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Stumpf faces House interrogation, says committed to rebuilding Wells Fargo reputation


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Stumpf faces House interrogation, says committed to rebuilding Wells Fargo reputation

Wells Fargo& Co. Chairman and CEO John Stumpf appeared guarded in a secondround of interrogation concerning the bank's cross-selling activity.

After enduring a firing line of questions in the Senate about the practicesthat landed the company a CFPBfine and initiated a fallout of suspended business relationships, , and possible , Stumpf revivedmuch of the same rhetoric in a House Financial Services Committee hearing Sept.29. He took blame for the scandal, while claiming the company has done its partin firing 5,300 employees who "were not consistent with our culture andethics."

"We need to focus … on operational issues, complianceissues," Stumpf said. "And I'm sorry we didn't get everything rightalong the way. ... We do a lot of really good things and we're a greatcorporate citizen."

One big difference was that Stumpf returned to the hill as aman worth $41 million less, after the Wells Fargo board announced Sept. 27 thatthey had clawed back his unvested equity awards in addition to suspending hissalary during the investigation along with any 2016 bonuses. The board alsoclawed back compensation from Carrie Tolstedt, the vice president who retiredwith an estimated $125 million package.

In the wake of the clawbacks, the House turned its attentionfrom Stumpf's personal responsibility to Wells Fargo's governance structure andcompany policies that led to the creation of a "culture turnedtoxic," as Rep. Maxine Waters, D-Calif., described it. The committee membersquestioned Stumpf about how bonus structures may have placed pressure onemployees to unethically sell more products, how senior the 5,300 firedemployees were, and how explicitly sales goals were stated.

Stumpf's answer to many of the questions was "I don'tknow."

"I've heard more 'I don't knows' from a CEO than Ithink I've ever heard in my life," Rep. Roger Williams, R-Texas said.

Stumpf did respond to allegations of insider trading from Rep. CarolynMaloney, D-N.Y., saying that he did not trade $13 million in 2013 because ofanything related to the cross-selling scandal. He also said he would not resign, saying he's dedicating all of hisenergy to "leading the company through this."

Maloney also pushed on Wells Fargo's internal scope of thecross-selling activity, which is examining possible fraudulent accounts back to2009. Maloney referenced a Montana lawsuit by six employees fired for reportingunethical debit card account sales as early as 2007.

Stumpf said the company is still committed to reaching outto all affected customers. In opening statements Stumpf also said the companywill expedite the elimination of all product sales goals for retail bankingteams effective Oct. 1. Wells Fargo originally said the elimination of salesgoals would be effective Jan. 1.

As Wells Fargo continues its damage control efforts, thequestion remains about whether or not the company can regain customer trust.

"Now your largest shareholder has a famous expressionwhere he says 'it takes your whole life to build your reputation and you canlose it in five minutes.' Do you think you and your institution havepermanently lost its reputation?" asked Rep. John Delaney, D-Md.

Stumpf didn't say yes or no.

"We have a lot of work to do to build it back and I amcommitted with all I can do to make that happen," Stumpf replied.