Round Two: Wells Fargo CEO Faces Blistering Rebuke From Congress Again

PHOTO: Chairman and CEO of Wells Fargo, John Stumpf, testifies before the House Financial Services Committee hearing on Capitol Hill in Washington, Sept. 29, 2016.PlayShawn Thew/EPA
WATCH Wells Fargo CEO Gets Blistering Rebuke From Congress for Second Time

Just over a week after facing blistering questions in front of a Senate panel, Wells Fargo CEO John Stumpf went back to Capitol Hill today, where he received verbal lashings and further calls to resign from members of the House Financial Services Committee over the unauthorized accounts scandal that is engulfing his company.

Interested in Wells Fargo?

Add Wells Fargo as an interest to stay up to date on the latest Wells Fargo news, video, and analysis from ABC News.
Add Interest

For over four hours, Democratic and Republican members of the committee lambasted the bank boss with heated exchanges that echoed the Senate hearing.

Stumpf has spent the last several weeks defending Wells Fargo after the Consumer Financial Protection Bureau (CFPB) and other regulators fined the bank a combined $185 million earlier this month, with the CFPB saying that "employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers."

The bipartisan derision began early today, with the committee Chairman Jeb Hensarling, R-Texas, telling Stumpf during his opening remarks: “Fraud is fraud. Theft is theft. And what happened at Wells Fargo over the course of many years cannot be described any other way.”

His Democratic counterpart, Ranking Member Maxine Waters, D-Calif., called the misconduct "some of the most egregious fraud we have seen since the foreclosure crisis."

Stumpf, who again faced calls today to resign, opened by saying that he was "deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public."

He also announced that the company would be ending its controversial product sales goals program on Oct. 1. Shortly after the scandal erupted, the company had said that the sales goals program would be ended effective Jan. 1, 2017.

At times, tempers flared during today's hearing.

Seemingly incensed that Stumpf was still in charge at the bank, Rep. Gregory Meeks, D-N.Y, said, "If the buck stops with you, as you came out here and said ... and you have to also admit that criminal activity was going on in your bank, then you should be fired because it stops with you."

Stumpf responded by saying that the bank's board has the power to remove him.

Meeks replied, "Who is paying for it? Who's taking responsibility for it? Don't come tell me you’re sorry," and then slapped the microphone.

One representative said that he wouldn't call for the CEO's resignation, because Stumpf was "in denial," and therefore he didn't "think it would do any good."

Earlier this week, Wells Fargo's board announced that Stumpf's salary would be suspended and that he would forgo some $41 million worth of promised compensations as well as a yearly bonus as an investigation is launched.

Despite the board's move ahead of today's hearing, it did not seem to satisfy those on the panel.

Waters said that the board's announcement was "welcomed, but let me be clear, it's not enough."

In other instances, snark took the place of anger.

“Mr. Stumpf, welcome to Washington," Rep. Brad Sherman, D-Calif., said wryly, before noting that those assembled were "now engaged in an important national ritual where the CEO comes before the representatives of the American people to apologize, to take full responsibility, to do so humbly."

Sherman, who said that large banks were "too big to manage, too big to regulate," and therefore should be broken up, raised the issue of the 5,300 employees who were fired in relation to the accounts scandal.

"You took 5,300 good Americans and turned them into felons with a system that you created, benefited from and drove your stock price up," Sherman said.

His concerns about the employees were shared by Rep. Scott Garrett, R-N.J., who said, "I would not be surprised if a number of those people ended up losing their homes, going into massive debt after they were dismissed."

"We have a problem in this country where it would seem, as we've seen previously, that the well connected ... the elite, if you will, in Washington and on Wall Street seem to play by a different set of rules while everyone else has to play by another," Garrett added.

For his part, Stumpf argued that the bank did not benefit from the unauthorized accounts.

"It cost us $10 million to open those accounts and close them; forget even the cost of the team member and the dismissal. This is a loser for us, it only helps when a customer uses it," he said.

Rep. Sean Duffy, R-Wisc., snapped back: "It's a loser for you, I guarantee that."

Duffy also asked if employees had "stolen" from customers, and Stumpf admitted, "In some cases, they did."

However, the bipartisan scorn was largely limited to Stumpf.

Republicans broke with their Democratic colleagues to heap some criticism on the CFPB.

"The financial regulators apparently were -- more than apparently completely asleep at the wheel as this massive fraud was occurring," Garrett said. "CFPB has only one job in a regulatory framework and they completely blew it."

The CFPB defended its work in response to Garrett's criticism, noting that "there were different pieces of this case and it took time to untangle conflicting accounts."

"It takes some time to bring various issues into focus as we conduct investigations, and develop more information about the underlying facts," agency spokesman David Mayorga said in a statement to ABC News today. "We are proud of our work together with the [Treasury Department's Office of the Comptroller of Currency] and the Los Angeles City Attorney to achieve nationwide relief for consumers harmed by Wells Fargo."

Wells Fargo stock was trading down about 1.7 percent at the end of today's hearing. Since the day before regulators made their allegations, Wells Fargo's stock has fallen about 11 percent, according to Reuters, and is at its lowest point since early 2014.

ABC News' Ben Siegel, Margaret Chadbourn and Ali Rogin contributed to this report from Washington.

Comments