(MENAFN- AFP) Embattled Wells Fargo CEO John Stumpf on Thursday was hammered by US lawmakers on Thursday, who demanded accountability and called into question his fitness to serve as the bank's chief.
Stumpf offered renewed contrition in an appearance before the Financial Services Committee of the House of Representatives, which is investigating the bank's sales practices after it admitted this month to opening millions of credit and debit accounts without customers' knowledge.
"I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public," said Stumpf.
Wells Fargo, the second largest US bank by market value, this month paid $190 million in fines and restitution over the accounts.
Amid persistent public outrage, California's treasurer on Wednesday suspended ties with the bank, which is based in the state, citing Wells Fargo's "venal abuse" of its customers.
During Thursday's hearing, indignant lawmakers pressed Stumpf as to whether senior management would be held to account after the bank fired 5,300 employees over the illegal sales practices.
Stumpf announced that his bank would this week end the kind of high-pressure sales goals that had driven employees to meet targets by opening the accounts. The bank had planned to do so by January 1 but was accelerating the process, he said.
On Tuesday, the bank's board announced that Stumpf would forfeit $41 million compensation and that the its former community banking head Carrie Tolstedt will also forfeit $19 million. Neither is to receive any bonus.
Stumpf is now working without pay pending the outcome of an internal review. Federal prosecutors have also opened a probe, according to The Wall Street Journal.
During irate questioning, lawmakers on Thursday pressed Stumpf on whether anyone in senior management had been held to account, rather than rank-and-file branch managers and their immediate superiors.
"It's just beyond credibility that somebody up the food chain didn't either order this, condone it, or turn a blind eye to it," said Jeb Hensarling, the committee's Republican chair.
Stumpf said an internal review would examine the roles of senior management: "The board is going to be involved. Management is going to be involved."
Committee members also noted that the sham sales tactics had spilled out into the open when the Los Angeles Times publish an article about them in December 2013 but that the sales practices had not been stopped until 2015.
Stumpf said the board had gradually gained awareness of the matter between 2013 and 2015.
"It was in 2015 that we had a full report," he said. "In 2014 we were starting to get more granular information that this was a risk area for the company to focus on."
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.