Alexandria Ocasio-Cortez Grills Wells Fargo CEO Over Financing ‘Caging of Children’

Rep. Alexandria Ocasio Cortez talks with Rep. Jennifer Wexton while hearing testimony from Wells Fargo CEO Timothy Sloan

Rep. Alexandria Ocasio Cortez talks with Rep. Jennifer Wexton while hearing testimony from Wells Fargo CEO Timothy Sloan

She asked if the bank should be "downsized".

Sloan was the first bank executive to be grilled by the House Financial Services Committee since it was taken over by Democrats following the 2018 congressional election. Wells Fargo's 8.4 percent advance so far this year trails the KBW index's 14 percent jump and an 11 percent increase in the S&P 500.

Sloan has spent years attempting to fix the bank's image, including making regular visits to Capitol Hill.

On the issue of Wells Fargo's relationship with the private prison industry and the Trump administration's child detention policy, Ocasio-Cortez asked sharply: "Mr. Sloan, why was the bank involved in the caging of children?" Even as Sloan was telling the world it would "leave no stone unturned" and "be very transparent" with investors, he had in his hands a report from independent consultants indicating that the bank had been forcing bogus insurance on its customers, which had resulted in a wave of vehicle repossessions. "Our constituents should be able to trust their own bank".

At Tuesday's hearing, legislators from both sides of the aisle demanded answers as Sloan struggled to defend the bank.

"Their vulnerability is profound", Beck said of Wells Fargo customers.

Waters told Sloan at the hearing that the bank was "too big to manage" and noted revelations of customer harm that have been disclosed since he became CEO.

But in federal court, Wells Fargo tells a different story.

Sloan said since taking over as chief executive, he's been working to "address the root causes" of the company's recent controversies.

Sloan, who took the helm weeks after the first scandal emerged in September 2016, remained calm as he fielded questions. Sloan said that the bank still did not know exactly how many accounts were opened without customers' consent. "I believe that Wells Fargo serves our 70 million customers ... in a very effective way", he said, citing "the changes I've made since becoming CEO". The bank has apparently made little progress in winning over lawmakers.

While Sloan assured lawmakers that Wells is doing everything it can to comply with regulators, one federal banking agency took issue with the assertion. That's the second-lowest of four ratings.

Asked about the report, Sloan said it was "inaccurate".

"Well, then you don't get it", Meeks said.

Wells has paid billions of dollars in fines to regulators for consumer abuses in virtually every part of its business and previous year had its growth capped by the Federal Reserve.

Wells Fargo shares were flat in midday trade.

Still, Beck doubted the House hearing would lead to more drastic penalties on Wells Fargo, like breaking up the bank.

Ranking member Patrick McHenry, a Republican, also displayed frustration.

"Sloan could intensify the legislative scrutiny if he is seen as evasive or insincere", he wrote.

She quickly pivoted to whether Wells Fargo should have to pay for environmental clean-up when one of the projects the bank financed, like the Dakota Access Pipeline, goes awry. And the New York Times over the weekend questioned the bank's efforts at reform and highlighted worker frustrations. "One of the many critical frustrations.is the dishonest, unethical and illegal practices they've engaged in".

"I still feel pressure to rush through transactions in order to keep up with productivity and pressure from sales and management", said Halvorson, who works in Wells' wealth division in Minnesota.

Sloan repeatedly attempted to defend the bank. "Solving past problems is not enough", he said.