At a Senate Banking Committee hearing held roughly one year after the Wells Fargo unauthorized accounts scandal unraveled, leading financial industry critic Sen. Elizabeth Warren questioned whether Chief Executive Timothy Sloan was the right person to lead a turnaround of the bank.
Warren, D-Mass., brought a large black binder to the hearing Tuesday. It contained transcripts of investor calls starting in 2011, when Sloan, then the chief financial officer, "aggressively promoted Wells Fargo's ability to open new accounts," she said.
"I've read through them, and on these calls, no one _ not even John Stumpf, who was the CEO at the time _ bragged more about Wells Fargo's ability and commitment to open new accounts for existing customers," she said.
Warren also brought up the 2013 Los Angeles Times investigation that first detailed the pressure-cooker sales culture at Wells Fargo, and noted that Sloan was interviewed for the report.
She read back his quote to him _ "I'm not aware of any overbearing sales culture" _ and asked if he launched an investigation into the issue either after The Times interview or after the story laying out evidence of the scandal was published.
Sloan said The Times did not provide him with documentation, to which Warren responded, "So I take that as a no."
"When you were asked about it, you did not tell the truth and you tried to cover it up," she said. "Wells Fargo is not going to change with you in charge."
Later, in response to similar questions from Sen. Heidi Heitkamp, D-N.D., Sloan reiterated that the newspaper had not provided him with documentation, but he said that when an internal review that same year found problems in the Community Banking division, the matter was elevated to the bank's senior leadership team.
However, Heitkamp also expressed doubt that Sloan was the person to transform the bank's practices, noting he was unable to answer several questions posed by senators. "I think anyone with an open mind would question whether we would see a culture change," she said.
Earlier, Sen. Sherrod Brown of Ohio, the committee's ranking Democrat, brought up that the bank has found and disclosed a number of other instances in which customers were harmed since Wells Fargo paid a $185 million regulatory settlement over the unauthorized accounts in September 2016.
He specifically noted the bank's disclosure in July that it would pay $80 million in refunds to hundreds of thousands of customers who were forced to pay for auto insurance policies they didn't need.
"The board chose to limit the scope of the review to the community bank," he said. "It should have known or should have wanted to know that other problems" existed in other divisions.
Alluding to the recent data breach at credit reporting giant Equifax, Brown said, "It's no wonder the public doesn't trust our financial system."
Other problems that have cropped up at Wells Fargo over the last year include allegations the bank improperly changed the terms of mortgage loans for bankrupt borrowers, signed up customers for unauthorized life insurance policies and overcharged small businesses for credit- and debit-card processing services.
Sloan, though, said in his opening remarks that the company was "a better bank today than it was a year ago," and pledged it would improve more over the next year. He then listed a number of reforms the San Francisco bank has undertaken, including the elimination of product sales goals for retail bankers and the adoption of a new employee incentive program based on customer service performance.
Wells Fargo has admitted that it created as many as 2.1 million accounts in customers' names without their knowledge or authorization. A recent expanded audit showed that the estimated number of unauthorized accounts could be as high as 3.5 million. It also has agreed to settle several class-action lawsuits for $142 million.
Sloan took over the bank after the scandal forced former CEO John Stumpf to step down in October of last year.
