Wells Fargo CEO John Stumpf is set to appear before the Senate Banking Committee at 10 a.m. ET on Tuesday to answer question about fraudulent accounts opened by Wells employees.
2 million checking and credit card accounts were opened from 2011 onward by Wells Fargo employees without the knowledge of customers. The accounts were created in order to generate fees for Wells, as well as for employees to meet aggressive sales targets.
The Consumer Financial Protection Bureau (CFPB), the Office of the Comptroller of the Currency, and the Los Angeles prosecutor all went after Wells for the practice and settled for a $185 million fine.
Representatives from the CFPB and Office of the Comptroller will be present for the hearing.
In response, the bank has suspended sales targets for employees and fired 5,300 employees — roughly 1% of its workforce — for involvement in the actions. Stumpf has also been on a public relations campaign over the past week speaking with the Wall Street Journal and CNBC’s Jim Cramer.
Since the fine, Wells has generated a significant political backlash from Democratic Senators including Elizabeth Warren and even prompted Democratic presidential nominee Hillary Clinton to write an open letter regarding the scandal.
“There is simply no place for this kind of outrageous behaviour in America,” said Clinton in the letter.
In Stumpf’s remarks to the Banking Committee, which were released by the New York Times on Monday night, he is expected to apologise and take full responsibility for the fraudulent accounts. Stumpf is also expected to
“I do want to make it clear that there was no orchestrated effort, or scheme as some have called it, by the company,” Stumpf is expected to say per the remarks released by the Times. “We never directed or wanted out employees, whom we refer to as team members, to provide products and services to customers they did not want or need.”
Stumpf is also expected to explain “cross-selling,” in which Wells Fargo would attempt to sell additional products to existing customers. The practice has come under fire with some saying pushing cross selling emphasised opening new products and may have contributed to the opening of fraudulent accounts.
The hearings will begin at 10:00 a.m. ET. We will be listening live, so refresh the page for updates.