Wells Fargo CEO Details Progress to Senate Banking Committee
October 03 2017 - 10:30AM
Business Wire
Sloan Outlines Changes to Strengthen the
Company’s Culture, Improve Business Practices and Renew Focus on
Customers
In testimony today before the U.S. Senate Committee on Banking,
Housing and Urban Affairs, Wells Fargo & Company (NYSE: WFC)
President and Chief Executive Officer Tim Sloan, once again
apologized to customers and team members who were affected by
improper sales practices in its Community Bank and pledged to
continue the transformative changes made across the company over
the last year. Sloan updated members of the Committee on the
progress he has initiated and overseen at Wells Fargo since taking
over as CEO last fall.
“The past year has been humbling and challenging. We are
resolving past problems even as we make changes to ensure nothing
like this happens again at Wells Fargo. We are doing this by
strengthening our culture, holding leaders accountable, and
improving our business practices and risk management,” Sloan said
in his testimony.
Transforming the Community Bank
Wells Fargo has made dramatic improvements to the operations and
culture of its Community Bank over the last year. In addition to
appointing Mary Mack as the new head of the Community Bank, Wells
Fargo has restructured its retail bank leadership across the
country. A new compensation and performance plan that rewards
retail team members for excellent customer service, risk
management, and team performance - not for selling products - has
been implemented, and hiring and training programs have been
revamped. Additionally, the bank has increased base pay for
entry-level team members.
Making it Right for Customers
In the last quarter of 2016, Wells Fargo reached out to more
than 40 million retail and 3 million small business customers,
asking them to contact us with any concerns about their accounts.
The company continues to issue refunds to every affected customer
who has responded or who was identified during the third-party
review of accounts and has already paid approximately $7 million in
refunds to Community Bank customers. Customers also may receive
compensation under the recent $142 million class-action settlement
for claims dating back to 2002. After deducting plaintiffs’
attorneys’ fees and costs of administration, the class-action
settlement will provide reimbursement of fees not already refunded
and compensation for increased borrowing costs related to
credit-score impact associated with a potentially unauthorized
account.
“I want to be clear that Wells Fargo is committed to addressing
every concern any customer may have about an unwanted product or
service—no matter where or when it may have occurred,” said Sloan
in his testimony.
Accountability & Operational Excellence
Sloan outlined important accountability actions taken by Wells
Fargo’s leaders over the last year as well as changes to the
company’s structure to ensure more robust risk and compliance
practices. Line of business leaders now follow a more centralized
model in which risk, compliance, and human resources have far
greater visibility into, and accountability for, issues across the
individual business lines. In addition, Wells Fargo established a
Conduct Management Office that has enterprise-wide responsibility
for investigations and complaints and reports each month to the
company’s executive team.
“Wells Fargo is a better bank today than it was a year ago. And
next year, Wells Fargo will be a better bank than it is today,”
said Sloan.
Sloan also discussed today the details of a comprehensive review
of sales practices and other customer-facing operations across the
bank that he launched last fall, going beyond the requirements of
Wells Fargo’s regulatory consent orders. Additionally, Wells Fargo
announced in August the result of a broader look into 165 million
accounts opened at the bank between 2009 and 2016. The estimate of
potentially unauthorized accounts grew by about 1.5 million.
However, these are not “new” instances of possible misconduct since
last fall; they are newly revealed instances of possible misconduct
based upon the expanded investigation of the years before 2017.
During the past year, Wells Fargo also identified and rectified
issues in its auto loan business related to Collateral Protection
Insurance placed by a third party. Last month, the bank began
issuing checks to affected auto loan customers and should complete
reimbursement of those customers by the middle of 2018.
Sloan concluded his testimony by reiterating that the company is
committed to continuing to make necessary changes to its operations
and to putting customers first.
“The entire Wells Fargo team, all 270,000 of us, is committed to
making things right for customers the bank let down. This is a big
job, and we will get it right,” said Sloan.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
insurance, investments, mortgage, and consumer and commercial
finance through more than 8,500 locations, 13,000 ATMs, the
internet (wellsfargo.com) and mobile banking, and has offices in 42
countries and territories to support customers who conduct business
in the global economy. With approximately 271,000 team members,
Wells Fargo serves one in three households in the United States.
Wells Fargo & Company was ranked No. 25 on Fortune’s 2017
rankings of America’s largest corporations. News, insights and
perspectives from Wells Fargo are also available at Wells Fargo
Stories.
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version on businesswire.com: http://www.businesswire.com/news/home/20171003006092/en/
MediaJennifer Dunn,
202-320-8532jennifer.g.dunn@wellsfargo.comInvestorsJohn
Campbell, 415-396-0523john.m.campbell@wellsfargo.com
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