Five Things to Know About Wells Fargo CEO Timothy Sloan's Testimony
October 02 2017 - 12:21PM
Dow Jones News
By Emily Glazer
Wells Fargo & Co. Chief Executive Timothy Sloan has a lot
riding on Tuesday morning.
A couple of weeks shy of his first anniversary in the job, Mr.
Sloan is set to testify for the first time as CEO in front of the
Senate Banking Committee Tuesday at 10 a.m. ET.
The last time the bank's chief did that, he was grilled over the
bank's sales-practices scandal and resigned less than a month
later.
Mr. Sloan, who filled that void last October when former CEO
John Stumpf left the bank, is expected to answer questions related
to the scandal, especially updated information that the bank
potentially opened 3.5 million customer accounts without their
knowledge, up from the initial estimate of up to 2.1 million
accounts.
A three-decade veteran of the bank, Mr. Sloan will likely also
address more recent problems in its consumer-lending unit around
certain auto-insurance charges and mortgage products. In recent
weeks, the San Francisco bank has already released details about
those issues, so the focus likely will be more on how Mr. Sloan
reacts to tough questions expected from the likes of Sen. Elizabeth
Warren (D, Mass.).
Mr. Sloan is planning to take a different tack than his
predecessor. For one thing, more than a year has passed since the
sales-practices scandal erupted, so he has had more time to prepare
than Mr. Stumpf did.
Wells Fargo spokeswoman Jennifer Dunn said the bank welcomes the
opportunity to update the committee on steps it has taken to fix
problems. But it won't be easy, as Wells Fargo hasn't yet shaken
free from the sales issues or more recent problems.
Here are five key things to keep in mind before Mr. Sloan has
his moment in the lights.
Sharing the Stage
Mr. Sloan is the only Wells Fargo banker slated to testify
Tuesday, but he is scheduled to appear at the same time as another
highly anticipated congressional hearing, that of former Equifax
CEO Richard Smith in front of the House Energy and Commerce
Committee.
Wells Fargo's Prep
In April, Wells Fargo named longtime executive David Moskowitz
its new head of government relations and public policy. The
Washington, D.C.-based executive hired a new law firm -- Sidley
Austin LLP -- to advise the bank on the congressional hearing. Mr.
Moskowitz and other Wells Fargo executives have also met with
congressional members and staff, but not Sen. Warren, according to
people familiar with the matter. She is expected to press Mr. Sloan
on positions she has already publicized, including her call to
replace more directors on Wells Fargo's board due to the
sales-practices scandal.
Transparency matters
Executives said they expect Mr. Sloan will be questioned more on
accountability and is preparing to be as transparent as possible
about what the bank has done in relation to its sales practices
scandal and other consumer-lending problems. "The day will be won
or lost based on Tim's ability to articulate what we've done," one
bank executive said.
Rallying the troops
One important constituency watching the hearing will be Wells
Fargo's own employees. In late September, Mr. Sloan hosted a
previously scheduled offsite for the bank's management committee,
about top 100 executives, in Henderson, Nev. Mr. Sloan sought to
get the top executives together in part to make sure they are
aligned on overall strategy before the hearing, executives
said.
Follow the money
Based on OpenSecrets.org, Wells Fargo spent just $1.7 million on
lobbying in 2017 so far. That is low compared with the $4.71
million in 2016 and $6.39 million in 2015. Bank spokeswoman
Jennifer Dunn said the figure reflects two reported quarters for
2017 and it is difficult to estimate what the bank's year-end total
will be. Mr. Sloan personally donated $33,900 to the Republican
National Committee in July, a group he has donated to in prior
years but in smaller amounts, according to the Federal Election
Commission site.
Write to Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
October 02, 2017 12:06 ET (16:06 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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