Sloan Outlines Changes to Strengthen the Company’s Culture, Improve
Business Practices and Renew Focus on Customers
SAN FRANCISCO–(BUSINESS WIRE)–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