In her opening statement at a full committee hearing on the unauthorized accounts at Wells Fargo, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, urged Chairman and CEO John Stumpf to tell the truth about the fraudulent activity that occurred and take full responsibility.
“We still do not have the information we need to understand how this happened, when the sales culture turned toxic, and who knew about it and when,” Waters said.
Waters called for a thorough investigation by the Justice Department into executive conduct. “Someone who is responsible for the broken culture that led to this behavior needs to be held responsible,” she said. “Not the lower-level employees that have been left to bear the weight of the mistakes that have been made.”
“The American public deserves to know what happened at Wells Fargo and why customers were ripped off so blatantly and repeatedly.”
Waters and Congressman Al Green (D-TX), Ranking Member of the Subcommittee on Oversight and Investigations, requested this hearing to investigate these harmful practices. It is the first time Chairman Hensarling has brought a financial executive before the Committee to testify for misconduct.
The full text of Waters’ statement is below.
Mr. Chairman, thank you for agreeing to hold this hearing so that we can examine the fraudulent activity that occurred at Wells Fargo.
Mr. Stumpf, the word games stop today. “Borrowing a customer’s money without permission” is not a sales practice violation. It is stealing. Using customers’ Social Security numbers to open credit cards without their consent is not wrongful sales behavior. It is identity theft. So let’s call this what it really is: some of the most egregious fraud we have seen since the foreclosure crisis.
For at least five years, Wells Fargo pushed aggressive sales goals for low-wage employees that were so unrealistic and so unattainable, that some felt pressured to commit crimes just to keep their jobs. It may have happened over two million times. Two. Million. Times. In fact, we have two former Wells Fargo workers, Julie Miller and Ruth Landaverde, today in the audience, who have borne the brunt of your choices.
Meanwhile, you, senior management, and the Board of Directors encouraged – even bragged about – behavior amounting to widespread fraud. Today, I hope you came prepared to honestly explain both how and why.
While you personally told me you were prepared to take “full responsibility,” we have seen your testimony in front of the Senate Banking Committee and there are still answers that need to be given. The testimony we have witnessed in the Senate trying to explain what happened is not satisfactory. And we still do not have the information we need to understand how this happened, when the sales culture turned toxic, and who knew about it and when.
Despite your statements to the contrary, any legitimate investigation shows that executives at Wells Fargo either knew, or should have known, much earlier than 2013 that these practices were taking place.
I think that executive conduct at Wells Fargo deserves a thorough investigation by the Department of Justice. Someone who is responsible for the broken culture that led to this behavior needs to be held responsible. Not the lower-level employees that have been left to bear the weight of the mistakes that have been made.
This issue is personal for me. The size of Wells Fargo’s footprint in California means that many, if not most, of the employees and customers who were victimized by this are my constituents and neighbors. They did not deserve to have their trust violated by Wells Fargo. No one did.
I’m still receiving calls to my office complaining about Wells Fargo, and one caller described how he went into the bank, complained about specific accounts he knew nothing about, the employees called the police on him, and he was arrested.
And yet, violating the public’s trust to drive up profits is exactly what Wells Fargo did. In the Senate hearing it was revealed that you benefited personally from that, Mr. Stumpf. Your own bank account benefited from that deception.
Now, I know that you said you take responsibility for these practices, and that you are conducting your own investigations, and that you and other managers are forgoing some of your compensation, that is welcomed. But let me be clear: it is not enough.
Unfortunately, this is not the first time we have seen abusive practices at Wells Fargo. We thought you were working on these practices six years ago, your mortgage executive sat in that very chair, reassuring my Subcommittee that you were committed to fixing Wells Fargo’s forgery of mortgage documents. And yet, we haven’t seen the problem fixed, we’ve just seen it migrate to another part of your bank.
So I hope that today we can hear the truth, Mr. Stumpf, because the American public deserves to know what happened at Wells Fargo and why customers were ripped off so blatantly and repeatedly. You can also rest assured that this is just the beginning, and that we will be demanding more information until we get to the bottom of this. I urge your cooperation and I must tell you that I have known you for a while, I communicated with you at times, you have been very helpful to my constituents, so I’m very disappointed and we must get to the bottom of this and I want to be able to receive the documents and information that we requested from you, I’m told we have been refused, I think it is on your best best interest to come forward with those documents.