HOLDING WALL STREET ACCOUNTABLE: 

INVESTIGATING WELLS FARGO’S 

OPENING OF UNAUTHORIZED 

CUSTOMER ACCOUNTS 

HEARING 

BEFORE THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 29, 2016 

Printed for the use of the Committee on Financial Services 

Serial No. 114–109 

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HOLDING WALL STREET ACCOUNTABLE: INVESTIGATING WELLS FARGO’S OPENING OF 

UNAUTHORIZED CUSTOMER ACCOUNTS 

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HOLDING WALL STREET ACCOUNTABLE: 

INVESTIGATING WELLS FARGO’S 

OPENING OF UNAUTHORIZED 

CUSTOMER ACCOUNTS 

HEARING 

BEFORE THE

COMMITTEE ON FINANCIAL SERVICES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 29, 2016 

Printed for the use of the Committee on Financial Services 

Serial No. 114–109 

( 

(II) 

HOUSE COMMITTEE ON FINANCIAL SERVICES 

JEB HENSARLING, Texas, Chairman 

PATRICK T. MCHENRY, North Carolina, 

Vice Chairman 

PETER T. KING, New York 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

SCOTT GARRETT, New Jersey 

RANDY NEUGEBAUER, Texas 

STEVAN PEARCE, New Mexico 

BILL POSEY, Florida 

MICHAEL G. FITZPATRICK, Pennsylvania 

LYNN A. WESTMORELAND, Georgia 

BLAINE LUETKEMEYER, Missouri 

BILL HUIZENGA, Michigan 

SEAN P. DUFFY, Wisconsin 

ROBERT HURT, Virginia 

STEVE STIVERS, Ohio 

STEPHEN LEE FINCHER, Tennessee 

MARLIN A. STUTZMAN, Indiana 

MICK MULVANEY, South Carolina 

RANDY HULTGREN, Illinois 

DENNIS A. ROSS, Florida 

ROBERT PITTENGER, North Carolina 

ANN WAGNER, Missouri 

ANDY BARR, Kentucky 

KEITH J. ROTHFUS, Pennsylvania 

LUKE MESSER, Indiana 

DAVID SCHWEIKERT, Arizona 

FRANK GUINTA, New Hampshire 

SCOTT TIPTON, Colorado 

ROGER WILLIAMS, Texas 

BRUCE POLIQUIN, Maine 

MIA LOVE, Utah 

FRENCH HILL, Arkansas 

TOM EMMER, Minnesota 

MAXINE WATERS, California, Ranking 

Member 

CAROLYN B. MALONEY, New York 

NYDIA M. VELA ́ ZQUEZ, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

MICHAEL E. CAPUANO, Massachusetts 

RUBE ́ N HINOJOSA, Texas 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

DAVID SCOTT, Georgia 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

GWEN MOORE, Wisconsin 

KEITH ELLISON, Minnesota 

ED PERLMUTTER, Colorado 

JAMES A. HIMES, Connecticut 

JOHN C. CARNEY, JR., Delaware 

TERRI A. SEWELL, Alabama 

BILL FOSTER, Illinois 

DANIEL T. KILDEE, Michigan 

PATRICK MURPHY, Florida 

JOHN K. DELANEY, Maryland 

KYRSTEN SINEMA, Arizona 

JOYCE BEATTY, Ohio 

DENNY HECK, Washington 

JUAN VARGAS, California 

SHANNON MCGAHN, Staff Director 

JAMES H. CLINGER, Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on: 

September 29, 2016 .......................................................................................... 1 

Appendix: 

September 29, 2016 .......................................................................................... 81 

WITNESSES 

THURSDAY, SEPTEMBER 29, 2016 

Stumpf, John G., Chairman and Chief Executive Officer, Wells Fargo and 

Company ............................................................................................................... 4 

APPENDIX 

Prepared statements: 

Stumpf, John G. ................................................................................................ 82 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Foster, Hon. Bill: 

Slide entitled, ‘‘Wells Fargo Settlements Since the Financial Crisis’’ .......... 87 

Lynch, Hon. Stephen: 

Letter to John G. Stumpf from Oversight and Government Reform 

Committe Ranking Member Elijah E. Cummings, dated September 13, 

2016 ................................................................................................................ 88 

Maloney, Hon. Carolyn: 

Filing for a court case in Montana which was filed on September 17, 

2010 ................................................................................................................ 92 

Filing for a court case in Montana which was filed on October 6, 2009 ...... 112 

SEC Statement of Changes in Beneficial Ownership for stocks ................... 126 

Moore, Hon. Gwen: 

Constituent letter dated September 28, 2016, regarding Wells Fargo employment ........................................................................................................ 128 

Perlmutter, Hon. Ed: 

Wells Fargo Community Banking reports ...................................................... 129 

Stumpf, John G.: 

Written responses to questions for the record ............................................... 219 

(1) 

HOLDING WALL STREET ACCOUNTABLE: 

INVESTIGATING WELLS FARGO’S 

OPENING OF UNAUTHORIZED 

CUSTOMER ACCOUNTS 

Thursday, September 29, 2016 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The committee met, pursuant to notice, at 10 a.m., in room 2128, 

Rayburn House Office Building, Hon. Jeb Hensarling [chairman of 

the committee] presiding. 

Members present: Representatives Hensarling, Royce, Lucas, 

Garrett, Neugebauer, McHenry, Pearce, Posey, Fitzpatrick, Luetkemeyer, Duffy, Stivers, Stutzman, Mulvaney, Hultgren, Pittenger, 

Wagner, Barr, Rothfus, Messer, Schweikert, Guinta, Tipton, Williams, Poliquin, Love, Hill; Waters, Maloney, Velazquez, Sherman, 

Meeks, Capuano, Lynch, Scott, Green, Cleaver, Moore, Ellison, 

Perlmutter, Himes, Carney, Sewell, Foster, Kildee, Murphy, 

Delaney, Beatty, and Heck. 

Chairman HENSARLING. The Financial Services Committee will 

come to order. 

Without objection, the Chair is authorized to declare a recess of 

the committee at any time. 

Today’s hearing is entitled, ‘‘Holding Wall Street Accountable: Investigating Wells Fargo’s Opening of Unauthorized Customer Accounts.’’ 

I now recognize myself for 5 minutes to give an opening statement. 

We are here today because millions of Americans were ripped off 

by their bank and seemingly let down by their government. Fraud 

is fraud, theft is theft, and what happened at Wells Fargo over the 

course of many years cannot be described any other way. 

In fact, a whole host of Federal laws were potentially violated, 

including the Truth in Savings Act, the Fair Credit Reporting Act, 

the Truth in Lending Act, the Electronic Fund Transfer Act, the 

Securities and Exchange Act of 1933, the Securities and Exchange 

Act of 1934, and the Sarbanes-Oxley Act of 2002. All charges must 

be thoroughly investigated, and all culpable individuals must be 

held accountable. 

And while the fine that Wells Fargo will pay, roughly 3 percent 

of the bank’s second quarterly profits, is tiny by Wall Street standards, the harm caused to consumers and employees is not. To the 

factory worker who just had her credit score dinged because of the 

2 

fraud Wells Fargo perpetrated, the cost is big. To the waiter at the 

local diner living paycheck to paycheck who had to pay fees associated with a fraudulent account, the cost is big. To the Wells Fargo 

employee with kids to support who lost her job because she refused 

to participate in the scheme, the cost is big. 

We will make sure those who were betrayed by Wells Fargo are 

not forgotten. And it is on their behalf that our committee has 

launched an in-depth investigation, Mr. Stumpf, of your bank’s activities. 

And let me be clear, today’s hearing is just the beginning of our 

investigation; it is not the end. And, as I speak, our committee is 

gathering thousands of pages of records and documents from both 

Wells Fargo and the relevant Federal regulators. In the coming 

weeks, we will be questioning Wells Fargo executives. If necessary, 

I will not hesitate to issue subpoenas, because we will do what is 

necessary to get to the bottom of the matter. 

Mr. Stumpf, we don’t yet know what you knew, when you knew 

it, and what you chose to do about it, but we know it happened on 

your watch, and we hold you accountable for the answers to why 

this happened. 

At last week’s Senate hearing, you were uncertain of many matters. In the intervening days, we trust that you have had a chance 

to refresh your recollection and to review your records; therefore, 

we hope and expect you will provide more complete answers today. 

We need to know exactly when and how you and other executives 

at Wells Fargo found out about this indemnant fraud. We need to 

know today what you directed others to do about it when you found 

out. We need to know today who in management is being held accountable. 

We already know that as far back as 2009, former Wells Fargo 

employees started filing wrongful termination lawsuits alleging 

fraudulent accounts and improper sales tactics were taking place. 

Approximately 5,300 Wells Fargo employees were fired over a 5- 

year period for these improper sales practices, and perhaps as 

many as 2 million unauthorized accounts were fraudulently 

opened. 

Based on these facts, we will also be asking serious questions of 

our regulators in the course of this investigation. If the OCC had 

examiners on-site at Wells Fargo during the time when these 

fraudulent accounts were opened, and the CFPB was conducting 

regular examinations, why did it seemingly take the L.A. Times to 

expose the fraud? And, once exposed, why did it take almost 18 

months for the CFPB to initiate a supervisory review? 

Today, I don’t know the answers to the questions. Perhaps our 

Federal regulators deserve a pat on the back, but perhaps they deserve a swift kick on the backside. We will find out which. 

But we launched this investigation, ultimately, because it is our 

job to hold both Wall Street and Washington accountable and to 

protect consumers from the excesses of both. True consumer protection is the preservation of competitive, innovative, free markets 

that are vigorously policed for force, fraud, and deception. 

Mr. Stumpf, I know that Wells Fargo represents an iconic brand. 

I know that your bank has a very rich and proud heritage. I also 

know that you have hundreds of thousands of good employees who 

3 

had nothing to do with this sordid affair, and who do good work 

in building their communities. But this sordid affair does remind 

me why I trust markets and I do not trust individual companies. 

And, Mr. Stumpf, I regrettably have a mortgage with your bank. 

I wish I didn’t. And if I was in the position to pay it off, I would, 

because you have broken my trust and you have broken the trust 

of millions of others, and it will take a long, long time to earn that 

trust back. 

I now recognize the ranking member for 5 minutes. 

Ms. WATERS. Thank you very much, Mr. Chairman. And I thank 

you for agreeing to hold this hearing so that we can examine the 

fraudulent activity that occurred at Wells Fargo. 

Mr. Stumpf, the word games stop today. Borrowing a customer’s 

money without permission is not a sales practice violation; it’s 

stealing. Using customers’ Social Security numbers to open credit 

cards without their consent is not wrongful sales behavior; it is 

identity theft. So let’s call it what it really is: some of the most 

egregious fraud we have seen since the foreclosure crisis. 

For at least 5 years, Wells Fargo pushed aggressive sales goals 

for low-wage employees that were so unrealistic and so unattainable that some felt pressured to commit crimes just to keep their 

jobs. It may have happened over 2 million times—2 million times. 

In fact, we have two former Wells Fargo workers, Julie Miller and 

Ruth Landaverde, today in the audience who have borne the brunt 

of your choices. Meanwhile, your senior management, the board of 

directors encouraged, even bragged about behavior amounting to 

widespread fraud. 

Today, I hope you came prepared to explain both how and why. 

While you personally told me you were prepared to take full responsibility, we have seen your testimony in front of the Senate 

Banking Committee and there are still answers that need to be 

given. The testimony that we have witnessed in the Senate trying 

to explain what happened is not satisfactory. And we still do not 

have all the information we need to understand how this happened, 

when the sales culture turned toxic, and who knew about it and 

when. 

Despite your statements to the contrary, any legitimate investigation shows that executives at Wells Fargo either knew or 

should have known much earlier than 2013 that these practices 

were taking place. 

I think that executive conduct at Wells Fargo deserves a thorough investigation by the Department of Justice. Someone responsible for the broken culture that led to this behavior needs to be 

held responsible, not the lower-level employees who have been left 

to bear the weight of the mistakes that have been made. 

This issue is personal for me. The size of Wells Fargo’s footprint 

in California means that many, if not most, of the employees and 

customers who were victimized by this are my constituents and 

neighbors. They don’t deserve to have their trust violated by Wells 

Fargo. No one did. 

I’m still receiving calls in my office complaining about Wells 

Fargo now. And one caller described how he went into the bank 

and complained about excessive accounts that he knew nothing 

about. The employees called the police on him, and he was arVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
4 

rested. And yet violating the public’s trust to drive up profits is exactly what Wells Fargo did. 

In the Senate hearing, it was revealed that even you benefited 

from that, Mr. Stumpf. Your own bank account benefited from that 

deception. Now, I know that you said you take responsibility for 

these practices and that you are conducting your own investigation 

and that you and other managers are forgoing some of your compensation. That is welcome, but let me be clear: It’s not enough. 

Unfortunately, this is not the first time we’ve seen abusive practices at Wells Fargo. We thought that you were working on these 

practices. Six years ago, your mortgage executive sat right here in 

this very chair, reassuring my subcommittee that you were committed to fixing Wells Fargo’s forgery of mortgage documents, and 

yet we haven’t seen the problem fixed. We’ve just seen it migrate 

to another part of your bank. 

So I hope today we can hear from you, Mr. Stumpf, because the 

American public deserves to know what happened at Wells Fargo 

and why customers were ripped off so blatantly and repeatedly. 

You can also rest assured that this is just the beginning and that 

we will be demanding more information until we get to the bottom 

of this. And, of course, I urge your cooperation. 

And I must tell you that I have known you for a while; I’ve communicated with you. At times, you have been very helpful to my 

constituents. So I’m very disappointed, and we must get to the bottom of this. 

And I want to be able to receive the documents and information 

that we requested from you. I’m told that they have been refused. 

I think it is in your best interest to come forward with those documents. 

Mr. Chairman, I yield back the balance of my time. 

Chairman HENSARLING. The gentlelady yields back. 

Today, we will receive the testimony of Mr. John Stumpf, who is 

the chairman and CEO of Wells Fargo and Company. Mr. Stumpf 

has held a number of senior management positions at Wells and 

its predecessors, where he has worked for 34 years. 

Mr. Stumpf, would you please rise and raise your right hand? 

[Witness sworn.] 

Chairman HENSARLING. Thank you. Please be seated. 

Let the record reflect that the witness has answered in the affirmative. 

Without objection, the witness’ written statement will be made a 

part of the record. 

Mr. Stumpf, you are now recognized for 5 minutes to give an oral 

presentation of your testimony. 

TESTIMONY OF JOHN G. STUMPF, CHAIRMAN AND CHIEF 

EXECUTIVE OFFICER, WELLS FARGO AND COMPANY 

Mr. STUMPF. Chairman Hensarling, Ranking Member Waters, 

and members of the committee, thank you for inviting me to be 

here with you today. 

I am the chairman and chief executive officer of Wells Fargo, 

where I’ve worked for nearly 35 years. It is my privilege to lead 

this company, which was founded over 164 years ago and played 

a vital role in the financial history and development of our country. 

5 

I am deeply sorry that we’ve failed to fulfill our responsibility to 

our customers, to our team members, and to the American public. 

I am fully accountable for all unethical sales practices in our retail 

banking business, and I’m fully committed to fixing this issue, 

strengthening our culture, and taking the necessary steps and actions to restore our customers’ trust. 

We should have done more sooner, but we will not stop working 

until we get this right. This morning, I will update you on a number of steps taken to address our retail bank sales practices problem and make things right for customers who may have been 

harmed. 

At Wells Fargo, we have new leadership in our retail banking 

business, focused on ensuring that all team members in our retail 

bank provide the best service to our customers. 

Secondly, we recently announced the elimination of product sales 

goals for everyone in retail banking effective January 1st. Today, 

I am announcing that we are accelerating this process and ending 

all product sales goals effective at the end of this week. We want 

to make sure nothing gets in the way of doing what is right for our 

customers. 

Also, we now send out to all customers a confirmation email approximately 1 hour after opening a savings or checking account and 

an acknowledgment letter after a customer applies for a credit 

card. 

We’re also making it right for customers. We have begun contacting the customers with open credit cards identified by 

PricewaterhouseCoopers to determine whether they wanted these 

credit cards. It’s early in the process, but so far we have reached 

more than 20,000 of these customers and talked to them about 

their credit card accounts. Fewer than 25 percent have told us they 

either did not apply for the card or they cannot recall whether they 

applied or not for the card. 

For those customers who want the card, the card will remain 

open. For any customer who does not want their card, we are closing the account and informing the credit bureaus. Any fees these 

customers may have paid already have been refunded, and we are 

developing a process to deal with any other forms of harm. 

For deposit customers, we have refunded fees and are contacting 

every single one of them across the country to ensure that we have 

a full understanding of every customer affected by this problem. In 

addition, we are voluntarily expanding the scope of the reviews we 

have done to go back in time to 2010 and 2009. 

While these issues we will discuss today are deeply disappointing 

and will take time to repair, they do not represent the true culture 

and nature of Wells Fargo. 

Some have suggested the problem was cross-selling, but that is 

not the case. At its core, cross-selling is all about deepening customer household relationships with products they want, they use, 

and they value. It is not about improper sales practices used to create unwanted accounts. That’s not good for our customers and not 

good for Wells Fargo. If we take care of our customers, they will 

deepen their relationships with us and trust us more with their 

business. That is good for customers, who benefit from the lower 

costs we pass on, and that is cross-selling done the right way. 

6 

In closing, I’d like to talk about my commitment to accountability. When I say I am accountable, I am referring to the actions 

our board took, at my recommendation, to forfeit the stock awards 

that are the largest part of my compensation for the past 3 years 

and any bonus this year, as well as my agreement to work without 

salary until the board completes its investigation. I respect and accept the board’s decision. 

And when I say I’m accountable, I also mean accountable for 

leading Wells Fargo as the company restores the trust of customers, team members, and investors. 

Thank you for this opportunity to testify today. 

[The prepared statement of Mr. Stumpf can be found on page 82 

of the appendix.] 

Chairman HENSARLING. The Chair now yields himself 5 minutes 

for questions. 

Mr. Stumpf, to the American people, this kind of feels like deja 

vu all over again. Some institution is found engaging in terrible activities, there’s a headline, a fine, and yet no one seems to be held 

accountable. Let’s face it, the fine that has been assessed to you is 

probably a rounding error, again, in your quarterly earnings report. 

With perhaps as many as 2 million fraudulent accounts over the 

course of 5 years, and 5,000 dismissed employees, 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. 

So my question to you is, who is the highest ranking official at 

Wells, who is the highest person in the management team who has 

been dismissed because of these activities? 

Mr. STUMPF. Thank you, Mr. Chairman, for that question. 

As you know, within—or maybe you don’t know, but within the 

5,300, there were managers and managers and managers of those 

managers. We are doing a full review— 

Chairman HENSARLING. Were these branch managers? 

Mr. STUMPF. Yes. About 10 percent or more were different kinds 

of managers. 

Chairman HENSARLING. And nobody above the branch-manager 

level? 

Mr. STUMPF. There were managers of the branch managers and 

a manager of those within the line of business. 

But we’re doing a full review of other control functions within the 

company. That process has already begun. The board is going to be 

involved; management will be involved. And, as I mentioned, we 

have— 

Chairman HENSARLING. When will this be complete? When will 

your own internal investigation be complete to hold management 

accountable? 

Mr. STUMPF. I can’t give you a specific timeframe, Mr. Chairman, 

but I will tell you, we’re moving on that directly, and we’re going 

to get to the bottom of this. 

Chairman HENSARLING. Okay. Is anybody at the bank-holdingcompany level being held accountable? 

Mr. STUMPF. People will be reviewed across the board at holding 

company activities, corporate activities. Anybody who was involved 

in promoting or supporting this behavior will be held accountable. 

7 

Chairman HENSARLING. Okay, but holding people accountable— 

isn’t it true, Mr. Stumpf, that in the settlement agreement Wells 

entered into with the OCC, the CFPB, and the L.A. City Attorney’s 

office, no individual admits guilt? Is that correct? Is that part of 

that settlement agreement? 

Mr. STUMPF. I believe we either did not admit or deny. So the 

facts there are the facts that we agreed to. 

Chairman HENSARLING. Mr. Stumpf, let’s go back to 2011, which 

I think is the first year we know for a fact that these fraudulent 

activities were taking place. The records that I believe your bank 

has shared with us show that 939 employees were terminated from 

the retail banking sector for improper sales practice in that year. 

Does that comport with your memory? 

Mr. STUMPF. Yes, it does, Mr. Chairman. 

Chairman HENSARLING. Okay. So, in 2011, isn’t it true that 

Wells Fargo entered into a consent order with the Federal Reserve 

that required Wells to cease and desist from certain practices in 

the mortgage lending department and that you paid an $85 million 

civil penalty? Is that true? 

Mr. STUMPF. Mr. Chairman, that’s true. That was in a different 

business area, but that is a true statement. 

Chairman HENSARLING. It was in a different business area, but 

I will read from the consent order: ‘‘Wells Fargo’s internal controls 

were not adequate to detect and prevent instances when certain of 

its sales personnel, in order to meet sales performance standards 

and receive incentive compensation, altered or falsified income documents and inflated prospective borrowers’ incomes to qualify those 

borrowers for loans that they would not otherwise have been qualified to receive.’’ This sounds eerily like the retail banking division. 

Also, as I understand it, the Fed required Wells Fargo to submit 

a plan to investigate and to change policies and procedures. 

I think you testified on the Senate side that you were not personally aware of the problems in the retail banking division until 

2013. Surely you were aware of the problems in the mortgage lending division in 2011, correct? 

Mr. STUMPF. That is correct. And Mr. Chairman, we shut that 

division down. That was even shut down— 

Chairman HENSARLING. But if you saw the problem in one area 

of the business, why didn’t you thoroughly investigate in the other 

areas? 

Mr. STUMPF. There is no question, Mr. Chairman, we should 

have done more sooner. 

Chairman HENSARLING. It just seems, Mr. Stumpf, that 5 years 

later your bank is being fined for exactly the same transaction, 

and, again, it just feels like deja vu all over again. And I hope and 

trust, but please tell me, that these fines are not simply a cost of 

doing business for Wells. 

Mr. STUMPF. Mr. Chairman, it’s not a cost of doing business. This 

has been—this is a serious trust issue with our customers. But I 

also want to say that there are 268,000 people who came to work 

this morning at Wells Fargo trying to do their very best to serve 

customers, and they do it wonderfully every day. And I don’t want 

our culture to be defined by these mistakes, and we take accountability for them. 

8 

Chairman HENSARLING. I understand that, Mr. Stumpf, but it 

appears to be a little late. And, particularly, when you got caught 

doing it 5 years ago, and you get caught doing it once again, somebody has to be held accountable. 

I now yield to the ranking member. 

Ms. WATERS. Thank you very much. 

Mr. Stumpf, you have said repeatedly that you were not aware 

of this widespread fraud in your bank until late in 2013, and it appears that there were activities going on that indicate you may 

have known much earlier than that. 

For example, in 2007, just months after you became CEO, the 

sales quality manual for the community banking division was updated with your executive guidance, as the manual states. That 

sales guide reminded employees of what should have been obvious, 

that they needed to obtain a customer’s consent before opening an 

account. And so, am I to understand that you discovered that there 

was something going on and there was a need for you to do this? 

That manual also said that sales practices that showed ‘‘questionable activity’’ would be sent via high priority to bank executives. So it appears that you knew something in 2007, that unauthorized accounts were a big enough problem that you had to correct your employee manual. 

And, as early as 2008, I have documents from court filings showing your employees were contacting your ethics hotline reporting 

bank fraud and complaining to managers over unauthorized accounts. And so it looks as if you certainly knew in 2008. 

What’s more, I have here a consent order with the Fed from 2011 

that puts your company on watch for sales quotas and compensation schemes that pushed employees to break the law. 

Does this sound familiar? 

Mr. STUMPF. Ranking Member Waters, I acknowledge that we 

had a 2011 order from the Federal Reserve. And I think we have 

always known, as in any sales organization, you’re going to have 

to be diligent, because not every team member will do everything 

right every day. So we have controls built in, we have ethics lines. 

And I knew and I still know that you put people to work every day 

and mistakes are going to happen. 

It was not until 2013 when I learned that this problem had been 

growing, it had been more prevalent and in a certain part of the 

company, which happens to be in the wonderful part of California 

in which you live. 

So these are things we’ve been working on. All of our strategies 

around training team members, who get 2 weeks of classroom 

training before they go out into a branch, is about doing things 

right, about ethics. 

And I’d also just want to remind the committee that the vast majority of our people who had the same opportunities, the same 

training, and the same goals, did it right every day for our customers. In fact, our customer loyalty scores now are the highest 

they’ve ever been in our company’s history. 

Ms. WATERS. Let me just point out some other activities that 

should sound familiar to you. 

While you were under the consent order for the mortgage arm of 

Wells Fargo, this fraud was surging in the retail arm of Wells 

9 

Fargo, but you didn’t connect the dots on these high-level trends 

across the bank. Did you know in 2011 that perhaps your sales incentives were driving this fraud? 

Mr. STUMPF. Congresswoman, I knew that—at least, I know 

today that we should’ve done more sooner. But maybe—and not 

only maybe—some of our people—and, again, it’s 1 percent, but 

that’s a big number for a big organization. Anytime—any one time 

we have 100,000 people in our branch network, and if 800 people, 

for whatever reason, either misunderstood or used this as a way to 

be dishonest and break our code of ethics and do something wrong 

for a customer and something wrong for us, that’s why we’re removing sales goals. They’ll be gone as of this weekend. In fact, we 

don’t even think they’re an important requirement anymore for us 

to continue to grow. 

Ms. WATERS. Mr. Stumpf, some people assume that you changed 

your customer agreement to add forced arbitration clauses for 

checking accounts and that these clauses prove to be incredibly 

helpful when you use them to dismiss multiple customer lawsuits. 

Is that true? 

Mr. STUMPF. That is not true. I actually think arbitration does 

make sense. But, in this case, for any customer who might have 

been harmed in this situation, we’re also paying for a mediation 

process so they have a mediator. 

Ms. WATERS. All right. Thank you very much. My time is up, and 

I will get to this later on if I can. Thank you. I yield back. 

Chairman HENSARLING. The time of the gentlelady has expired. 

The Chair now recognizes the gentleman from Texas, Mr. Neugebauer, chairman of our Financial Institutions Subcommittee. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. 

Mr. Stumpf, here we go. 

You serve as both the chairman and the CEO of Wells Fargo. Is 

that correct? 

Mr. STUMPF. Congressman, that is correct. 

Mr. NEUGEBAUER. And, as you’re aware, Section 972 of DoddFrank requires an issuer of securities to disclose the annual proxy 

statement, the reason why the issuer has chosen to allow the same 

person to serve as the board chairman and the CEO. This year, 

Wells states that your dual role is a result of your extensive experience and knowledge regarding the company and provides the most 

efficient leadership of the board and the company. 

Mr. Stumpf, do you think it’s a good idea for the same person to 

serve as both chairman of the board and CEO? 

Mr. STUMPF. Thank you, Congressman, for that question. 

In our company, we have 14 outside directors. We have a lead 

director. All directors are New York Stock Exchange-independent, 

by their standards. I am not a member of any standing committee 

of that board. The independent directors and the lead director help 

set the agenda for the boards. They always have meetings that are 

in executive session without me. 

And as you probably read about what happened this weekend— 

because we filed an 8-K yesterday about actions that they took as 

an independent board, and I was not part of that. So the board acts 

quite independently. 

10 

Mr. NEUGEBAUER. The current situation is that you’ve recused 

yourself from board decisions on this situation? 

Mr. STUMPF. Congressman, you’re right. I have either recused or 

I’ve not been invited. I’m not part of that. And I serve at the pleasure of the board. 

Mr. NEUGEBAUER. So you gave me a good idea of how your board 

is structured, but the original question was, do you think that’s a 

good idea, for the CEO to be also the chairman? Would the board 

and the stock shareholders, the customers, be better served if there 

was some separation in that area? 

Mr. STUMPF. Thank you. For our company, I believe we have the 

right structure. But, again, I serve at the will of the board, and the 

board can make a decision on that. 

Mr. NEUGEBAUER. Now, Mr. Stumpf, you testified that you 

learned of these violations sometime in 2013. When did you inform 

the board that this was an issue? 

Mr. STUMPF. Yes, so the board had high-level ethics line comments or questions or high-level kinds of activities around people 

who left the company, involuntary terminations, really through the 

2011–2013 timeframe. After we learned— 

Mr. NEUGEBAUER. Wait, wait, wait, let me have you repeat that. 

You said the board was having some discussions as early as 2011 

about this? 

Mr. STUMPF. I was saying that the board, from 2011 to 2013, 

would get reports at a committee level, at a high level, about ethics 

lines requests or information at, not a granular level, but at maybe 

the company level— 

Mr. NEUGEBAUER. But you didn’t find out about it until 2013? 

Mr. STUMPF. And, in 2013, it became—I became aware that there 

was an issue in the southwestern part of the country. And by 2014 

then—this was late in the year—by 2014, we started to provide 

more information to more committees of the board. And then by 

2015, the board had a—the risk committee of the board had a complete report on that issue. 

Mr. NEUGEBAUER. So, as chairman of the board, the CEO, when 

did you tell the board, we have a problem? 

Mr. STUMPF. It was in 2015 that we had a full report. Again, as 

I said in my testimony to the Senate and here today, in 2014, we 

were starting to get more granular information that this was a risk 

area for the company to focus on. 

Mr. NEUGEBAUER. Did you ever disclose this issue on a 10-K filing? 

Mr. STUMPF. We have—our 10-K—all of our K or Q filings are 

facts and circumstances, what we knew at the time. And as recently as our second-quarter Q this year, when we use our disclosure teams and our compliance teams to look at this issue, the 

facts and circumstances, we believed, were not material. 

Mr. NEUGEBAUER. I’m not for Congress setting the corporate 

structure, but I do think there is some question here whether, in 

this particular situation, the company would’ve been better served 

with those roles being separated. 

With that, I yield back. 

Chairman HENSARLING. The time of the gentleman has expired. 

11 

The Chair now recognizes the gentlelady from New York, Mrs. 

Maloney, ranking member of our Capital Markets Subcommittee. 

Mrs. MALONEY. Mr. Stumpf, we know now that whistleblowers 

first contacted the Consumer Financial Control Board about the 

fraud at Wells Faro in mid-2013. And you said in your Senate 

hearings last week that you first found out about the fake accounts 

in late 2013. And the L.A. Times article about the scandal was published on December 21, 2013. 

I have right here your form for filing, which I’d like to submit 

for the record— 

Chairman HENSARLING. Without objection, it is so ordered. 

Mrs. MALONEY. —that shows that on October 30, 2013, you sold 

$13 million worth of Wells Fargo stock on the open market. That 

is by far the largest open-market sale of Wells Fargo stock that you 

made in your 9 years as CEO. 

So my question is, did you dump $13 million of Wells Fargo 

stock, which you did through your family trust, right after you 

found out that your bank had been fraudulently opening hundreds 

of thousands of scam accounts ripping off your customers? 

Mr. STUMPF. Thank you for the question. 

First of all, the vast majority of our people go to work every day 

and try and do the right thing— 

Mrs. MALONEY. Excuse me. That is not my question. 

Mr. STUMPF. But I will get to your— 

Mrs. MALONEY. Excuse me. Excuse me. My question was, did you 

dump the stock after you found out about the fraudulent accounts? 

Because it seems that the timing is very, very suspicious, and it 

raises serious questions. 

Mr. STUMPF. I did not sell shares at the time because of anything 

related to— 

Mrs. MALONEY. But your Form 4 says you did sell the shares. 

Mr. STUMPF. I sold the shares. Today, I hold 4 times as many 

shares as I’m required. I want to stand with our— 

Mrs. MALONEY. Did you sell these shares or not? 

Mr. STUMPF. I sold those shares, and I sold them with proper approvals, with no view about anything that was going on with sales 

practices or anything else. 

Mrs. MALONEY. Well, it seems very, very suspicious that your largest sale was right after your $1.8 trillion bank was turned into 

a school for scoundrels. 

You acknowledge that your bank fired over 5,300 people who got 

caught willfully defrauding your customers. And a recent lawsuit 

alleges that you fired even more people because they refused to 

willfully defraud customers. And then you blame the low-level people, you fire them. You make profits, then you dump the stock. 

So I just have to say that it seems that when you found out 

about the fake accounts, instead of helping your customers, you 

first helped yourself. 

So, moving right along to the next question, Mr. Stumpf, you’ve 

said that Wells Fargo is conducting a review of all accounts going 

back to 2009 in order to identify any scam accounts. But last week, 

in the Senate hearings, you were asked if you would extend the review period to before 2009, and you refused to commit to extending 

the review period back to even earlier. 

12 

So if you were presented with hardcore evidence that Wells was 

engaged in some of these practices, these illegal scams prior to 

2009, would you change your mind about extending the review? 

Mr. STUMPF. Thank you for that question. 

We have agreed with our regulators to go back to 2011. We voluntarily said last week that we will go back to 2010 and 2009. I’ve 

told our team to leave no stone unturned. And if we find a situation where a customer is harmed that goes back prior to that, we 

will make it right for that customer. 

Mrs. MALONEY. Thank you, because I have the evidence right 

here. And I’d like to submit to the record a court case in Montana 

in which six Wells Fargo employees were fired for, among other 

things, ordering debit cards for customers without their permission, 

which is clearly illegal. And, according to the court documents, 

these illegal sales go back to 2007. 

Chairman HENSARLING. Without objection, it is so ordered. 

Mrs. MALONEY. So now we have evidence of illegal sales practices 

going back to 2007. Will you agree to extend the review period back 

to 2007 to cover this evidence that we are submitting today? 

Mr. STUMPF. Again, Congresswoman, we’re going to go back to 

2009. If we can find—and we’re going to contact every customer. 

If we find— 

Mrs. MALONEY. But this is evidence that it went back to 2007. 

And we thank you for going back to 2009. My question is, we have 

clear evidence that it goes back to 2007. Will you live up to your 

commitment of helping your customers who were defrauded, with 

clear evidence, back to 2007? 

Mr. STUMPF. We will go back, and if we find any evidence of any 

customer who was harmed in 2007 through our review, through 

2009, we will take care of each customer. 

Chairman HENSARLING. The time of the gentlelady has expired. 

The Chair now recognizes the gentleman from North Carolina, 

Mr. McHenry, vice chairman of our committee. 

Mr. MCHENRY. Thank you, Mr. Chairman. 

So I have the honor of representing the suburbs of Charlotte, 

North Carolina. North Carolina had an incredible banking culture 

over decades. Yet, in Charlotte, First Union, a homegrown bank 

with a great reputation, went through challenging times in the economic crisis, as you well know. But, before that time, they teamed 

up with a bank based in Winston-Salem: Wachovia. 

And, as you know, in acquiring what was then called Wachovia, 

which is really First Union and Wachovia, the pitch was that your 

culture from California was very similar to this North Carolina culture, this banking culture. And as you well know, John Grimes 

Medlin, who was a great chairman of Wachovia, sort of imbued in 

Wachovia this culture that a banker is a civil servant as well. 

There’s this obligation to society they have and their community. 

You eulogized him. 

Mr. STUMPF. Yes. 

Mr. MCHENRY. Paid tribute to that culture. 

Mr. STUMPF. Yes. 

Mr. MCHENRY. So I want you to think about that culture. Because what is so sad to me is that pitch of culture doesn’t conform 

with my experience with my constituents in North Carolina. It 

13 

doesn’t conform to what I know about First Union, what I know 

about Wachovia, and this cultural pitch that you had in acquiring 

them in the financial crisis. I know you have a huge head count 

in North Carolina; we’re grateful for it. But what’s sad to me is the 

impact of this on them and those employees you have in North 

Carolina. 

I wanted to look at your code of conduct that you tout. So let’s 

look at your code of ethics and business conduct. You said in your 

message as CEO, ‘‘We are all responsible for maintaining the highest possible ethical standards in how we conduct our business and 

serve our customers.’’ 

The code of ethics, in fact, says, ‘‘Our code applies to all team 

members, including officers, as well as directors of Wells Fargo and 

Company and its subsidiaries.’’ It also says, ‘‘We are all accountable for complying with the code as well as all company policies 

and applicable laws.’’ And, finally, ‘‘It’s critical that all team members have a solid understanding of our company’s code of ethics and 

business conduct and understanding that noncompliance with the 

policy may result in disciplinary action up to and including termination of employment.’’ 

You clearly have failed. You’ve clearly failed in your own ethical 

standards internally. You have broken, and your company has broken, longstanding law. You’ve broken longstanding ethical standards that you have within your company. This has nothing to do 

with this debate about Dodd-Frank or anything else. You’ve broken 

a longstanding law, and you’ve defrauded your customers. 

How can you rebuild trust? And how can you get through this 

thing? What standards are you holding yourself to that sends the 

message to the rest of these folks in your organization who look to 

you for leadership and guidance? What are you doing to restore 

that? 

Mr. STUMPF. Well, thank you, Congressman. 

The culture of the company is strong. And I don’t—I know— 

Mr. MCHENRY. It’s really hard to say that when you’re before 

Congress for the second time, and behind you was all the settlements you’ve had for problematic relationships you’ve had with 

your customers by taking their money—right?—counter to the law, 

counter to your ethical standards. 

So it’s great that you say you have a strong culture, but why are 

we here today? How are you addressing that? 

Mr. STUMPF. Yes, we are addressing it. 

First of all, with respect to culture, we have 268,000 people who 

have made their life’s work and careers out of helping customers. 

There are people today who aren’t— 

Mr. MCHENRY. That’s why I raised this in the way that I do, by 

severe disappointment, severe disappointment. That’s all. You 

broke the law. We make the law in Congress. This is not new stuff, 

that all of a sudden Congress changed some rules and you can’t 

have your employees create fake accounts and take fees from customers unknowingly, unwittingly. There has never been a time in 

human history when that has been ethical, right? 

Mr. STUMPF. Congressman— 

Mr. MCHENRY. So for you to say the culture’s okay, it seems to 

me that you’re just tone deaf to this. 

14 

The final thing you need to think about and your board of directors need to think about is this: The impact you have is not simply 

on your institution but the wider conversation on how my consumers can access credit. And the implications on what you’ve done 

and your leadership has done has this broader societal impact that 

is very negative. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentlelady from New York, Ms. 

Velazquez. 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. 

Mr. Stumpf, now that you were on the Senate side and you testified and the Senators asked you, of the 5,300 Wells Fargo employees who were fired for their misconduct, how many of them were 

fired because they failed to meet sales quotas? At that time, you 

stated that you didn’t know. 

Now that a week has passed and you have had a chance to consult your records and speak to your staff, are you prepared to tell 

us how many employees were fired for failing to meet their sales 

goals? 

Mr. STUMPF. Thank you, Congresswoman. 

Of the 5,300, which is about 1,000 people per year out of our 

team—and I don’t want to minimize it; it was 1 percent, because 

we have about 100,000 people in our bank branches at any one 

time—all of those people, through our investigation, were terminated because of their unethical behaviors. We found them, we decided that we don’t—we can’t have them here, they are not consistent with our culture and our ethics. 

Ms. VELAZQUEZ. Out of that 5,300 employees— 

Mr. STUMPF. Yes. 

Ms. VELAZQUEZ. —were there any employees who were fired because they didn’t meet their sales quota? 

Mr. STUMPF. They were—from my understanding— 

Ms. VELAZQUEZ. I’m not talking about the 5,300. Outside of that. 

Mr. STUMPF. Oh, outside. Outside of that, my understanding is 

that people should not be fired, terminated, for missing sales goals. 

I’m not saying it didn’t happen in some cases— 

Ms. VELAZQUEZ. Why should I trust that was the case? 

Mr. STUMPF. And we’re doing a review of employees who come 

forward who might have been terminated for that. 

Ms. VELAZQUEZ. Okay. So my next question is, if your review 

shows that there were employees who were fired because they 

didn’t meet their sales quota, would you be rehiring those individuals? 

Mr. STUMPF. Yes, well, first of all, we don’t have sales quotas; we 

have goals. And there are other goals that our people also have as 

part of their performance management. We’re reviewing that, and 

we’re going to try to make it right for every team member. 

Ms. VELAZQUEZ. Mr. Stumpf, I’m sure you are aware that Wells 

Fargo is the most active SBA 7(a) lender in the country. 

Mr. STUMPF. Correct. 

Ms. VELAZQUEZ. As ranking member of the House Small Business Committee, I am very concerned that the illegal practices uncovered by the CFPB on the consumer side may have spread to the 

15 

small-business side. Were your frontline employees under similar 

pressure to cross-sell products to the bank’s SBA 7(a) clients? 

Mr. STUMPF. First of all—thank you, Congresswoman—we are 

the Nation’s largest small-business lender. I am very proud that we 

do a lot of work helping men and women across this country start 

businesses and so forth. 

That’s a very different business, and I don’t know of any product 

sales goals—which, again, we’ve eliminated in our retail bank—in 

that business. It’s a very different business. 

Ms. VELAZQUEZ. So the 7(a) program is just a fraction of your 

overall small-business lending portfolio. Can you provide us today 

with assurances that these illegal practices did not affect any of 

your small-business clients at Wells Fargo? 

Mr. STUMPF. Yes, I don’t have that information in front of me. 

I’m happy to work with my staff or team and get back to your staff 

and cooperate on that as best I can. 

Ms. VELAZQUEZ. Given the fact that you lack the leadership to 

give us assurances that this was not the case, I’ll be writing to the 

SBA Administrator so that they can review all of the 7(a) portfolio 

to make sure that we protected small businesses as well as taxpayers. 

My next question to you is, now that you have decided to end 

product sales goals and financial rewards, have you considered 

raising the salaries of your retail banking employees in order to 

make up for this loss in compensation? 

Mr. STUMPF. Yes. We are working on a new incentive program. 

It’ll be out by the first of the year. And we want to make sure that 

our team members are totally aligned with our customers. And we 

want to make sure that compensation for our team members— 

again, the vast majority do it right—are not hurt in this process. 

Ms. VELAZQUEZ. I know that you’re not aware, but it’s very dif- ficult for any person in this country to live on a $25,000 salary. 

Chairman HENSARLING. The time of the gentlelady has expired. 

The Chair now recognizes the gentleman from New Jersey, Mr. 

Garrett, chairman of our Capital Markets Subcommittee. 

Mr. GARRETT. Thank you, Mr. Chairman. 

So, Mr. Stumpf, let me start by making a few observations, and 

then I’ll end with a couple of questions. 

First and foremost, I find it, as we all do, extraordinarily troubling that as I look through the history, the timeline of the scandal, 

a timeline that stretches over years, we see, as has already been 

testified to, 5,000 Wells Fargo employees were dismissed for their 

involvement in opening unauthorized accounts. 

What’s also interesting and troubling is the firings did not happen all at one time. My understanding, as we’ve heard already 

today, is that roughly 1,000 employees per year, in 2011, 2012, 

2013, 2014, and 2015. 

It’s extraordinary. How Wells Fargo management did not actively 

and decisively move to stop those activities after the first 100 or 

500, 750, or 1,000 employees were fired is beyond me. The fact that 

it was allowed to go on and on and on for years is apparently a 

failure of corporate governance, and a failure, quite candidly, of 

your management to do what is foremost, and that is to protect the 

customers who have trust in you. 

16 

What concerns me even more, however, is that it appears that 

most of the 5,000 employees who were fired were low-level or midlevel employees. I think the chairman just found out the highest 

level was a branch manager. And it doesn’t even include those who 

resigned due to the culture at Wells Fargo. As I say, meanwhile, 

to the best of my knowledge, no senior executives have been held 

accountable in the same manner that the lower-level employees 

were. I would not be surprised if a number of those people ended 

up losing their homes or going into massive debt after they were 

dismissed. 

No, I’m not defending their actions, just making a point that we 

have a problem in this country, where it would seem, as we’ve seen 

previously, that the well-connected here in Washington, the elite, 

if you will, and the well-connected on Wall Street, seem to play by 

one set of rules, while everyone else has to play by another. 

Yes, I know you just lost, reportedly, I hear, $41 million of your 

salary, but if I understand that correctly, that’s only a quarter of 

your pay over the last decade or so. And so you will forgive all of 

us if we don’t really feel that sorry. 

The second point I’d like to make is that, under Dodd-Frank, 

Wells Fargo remains fully eligible for taxpayer bailout going forward under Title II of the law should you run into trouble going 

forward. Taxpayers have already spent a lot of money bailing out 

poorly run Wall Street firms over the last decade. Mr. Stumpf, I 

hope you’re aware that the anger now directed at you by my constituents and others around the country isn’t just over the actions 

of the employees; it’s the fact that they seem to be forever on the 

hook to underwrite whatever kind of risky or, in this case, fraudulent activity Wells or other large banks engage in. 

Fortunately, earlier this month—I’ll just make a sidenote—we 

passed out a bill out of this committee, the CHOICE Act, which 

will ensure that if Wells Fargo does run into trouble again, it’s only 

its shareholders and its management that would pay the consequences and the taxpayers will no longer be on the hook. 

The third and final point I’ll make—and I know they’re not here, 

but, once again, the financial regulators apparently were—more 

than ‘‘apparently’’—completely asleep at the wheel as this massive 

fraud was occurring. 

If you look at one of those, the CFPB, the CFPB has only one 

job in a regulatory framework, and they completely blew it. It took 

a reporter from the L.A. Times to uncover what was going on at 

Wells Fargo. And so I hope my friends on the other side of the aisle 

will keep that in mind as they may pat the CFPB on the back for 

a job well done. 

In the time remaining, let’s get to the securities questions. The 

Securities Exchange Act requires a public company to keep its disclosure in place—that’s under SOX—requires the CEO and the 

CFO to attest to financial statements. You referred to some of that. 

Are you saying that all of those quarterly reports you were filing, 

that the information you had in 2011 and 2012 and 2013 and 2014, 

none of that information was material? 

Mr. STUMPF. At the time, given the facts and the circumstances, 

we filed accurate reports, and we did not believe it was material. 

17 

Mr. GARRETT. And when you got the PricewaterhouseCoopers 

analysis—when was that, by the way? 

Mr. STUMPF. That was late in 2015, early 2016. 

Mr. GARRETT. And, as soon as you had, has that been filed as a 

material statement? 

Mr. STUMPF. We considered the facts and circumstances, and we 

believed that not to be material. 

Mr. GARRETT. It’s not material. Why not? 

Mr. STUMPF. Remember—or at least—the PwC material looked 

at 93 million accounts that were opened over 4 years. They could 

not rule out, through large data analytics, about 11⁄2 percent of 

those accounts. That’s still a lot because of the size of the organization. 

Mr. GARRETT. Well, that, to me, Mr. Chairman, if that’s not material, this occurring over a 5-year period of time, a systemic problem in the organization, I don’t know what is. 

I yield back. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from California, Mr. 

Sherman. 

Mr. SHERMAN. Mr. Chairman, the American people need an assurance that this cross-selling mania that has afflicted Wells Fargo 

is not to be found at the other big banks. And I would urge you 

to have hearings where we hear from the CEOs of Bank of America, Citigroup, and others. 

And, until then, I hope that you would join with me in a letter 

of inquiry to ask what new account-opening quotas they had for 

their bank tellers, how many people they fired for not meeting 

their quotas, or how many people they fired for opening phony accounts. 

We have Wells Fargo before me, but I don’t think, Mr. Stumpf, 

that you should be alone in this joyous experience. Your colleagues 

should at least come forward with some assurance. 

We are 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. 

Mr. Stumpf, welcome to Washington. What plane did you fly in 

on? What airline? 

Mr. STUMPF. Virgin American. 

Mr. SHERMAN. And when you came to the Senate? 

Mr. STUMPF. I think it was United, but it was one of the two. 

Mr. SHERMAN. Okay. It shows Wall Street has learned something. Thank you. 

Mr. STUMPF. Thank you. 

Mr. SHERMAN. Now, you have these forced arbitration clauses in 

your agreement with your customers. You said, oh, they can have 

mediation too. Some of them want their day in court. 

Are you going to hold them to these forced arbitration clauses 

and screw them again out of their day in court, or are you willing 

to waive those clauses and say, if you were caught up in this, you 

get your choice, whether you have arbitration or not? 

Mr. STUMPF. Thank you, Congressman. I believe in arbitration. 

I think it’s a fair way to resolve disputes. 

18 

Mr. SHERMAN. Well, but your customers may want something 

else. Are you going to deprive them of that? 

Mr. STUMPF. No, we’re not. We’re going to have them—we’re 

going to pay for a mediator, and we— 

Mr. SHERMAN. They want their day in court. Are you going to 

screw them out of that? 

Mr. STUMPF. We’re taking this very seriously. I told— 

Mr. SHERMAN. Will you let them go to court if they want to go 

to court? Yes or no? 

Mr. STUMPF. No, but with an explanation. 

Mr. SHERMAN. ‘‘No, but.’’ Okay, thank you. That is a no. 

This sham was not an attempt to steal a few million dollars in 

fees from your customers, although that’s important, because you 

could say that a few million dollars wasn’t material. What was material is the price of your stock. You opened 2 million phony accounts and then went and told—and it had to be material, because 

you were bragging about it to the people investing in your stock 

that you had higher penetration rates, more accounts per customer, 

that the number of banking customers that had credit cards had 

grown from the mid-20 percent up to 42 percent. So it had to be 

material. You were talking about it. 

The peak firings, according to your own documents, was in 2013. 

So you knew you had a problem then. 

Mr. STUMPF. Correct. 

Mr. SHERMAN. Why didn’t you tell shareholders, our penetration 

rates are phony, our new accounts are phony accounts, and when 

we tell you we’re deepening our relationship with our customers, 

we’re doing so by putting them through the wringer? What internal 

audit system did you have that assured you that you didn’t have 

a material problem? 

Mr. STUMPF. Congressman, I have to push back here. This is the 

behavior of people that we found, that we did not want. And the 

vast majority of everything we do is right by our team members 

and customers. 

Mr. SHERMAN. Mr. Stumpf, you were firing, according to your 

own documents, the highest number of people in 2013, but bragging about your penetration rates, the number of accounts opening, 

in 2014. So you knew it was material to shareholders and you 

knew it was a phony number that you’d fired people for falsifying. 

Mr. STUMPF. Congressman, may I just have a second? Because 

we have gone back and looked. The 2 million accounts could not be 

ruled out. We don’t know if those are good accounts or not good accounts, and we have already looked at 20,000 credit cards. 

Mr. SHERMAN. Reclaiming my time, sir, you fired 5,300 people. 

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 by bragging about your levels of new accounts. 

Mr. STUMPF. Congressman, I have to disagree with that. 

Mr. SHERMAN. I’m not surprised. We have institutions that are 

too-big-to-fail. In 2008, we found that they were too-big-not-to-bailout. Attorney General Eric Holder has told us that they are too-bigto-jail, saying that he fears bringing a criminal indictment. We now 

learn that they’re too-big-to-manage, and too-big-to-regulate. It’s 

time to break them up. 

19 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Missouri, Mr. 

Luetkemeyer, chairman of our Housing and Insurance Subcommittee. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Today we are here to confront, in my judgment, a total travesty 

in the financial market. The consumers in this case were failed on 

all accounts. Their financial institution with whom they entrusted 

their families’ finances failed them. The Federal regulators who 

were charged with overseeing their protection failed them. The 

Federal regulators in charge of Wells Fargo failed to stop the ripping off of consumers, and the consumers lost. And slapping a bank 

with a fine isn’t going to make that go away. Only 5 percent of that 

fine is going to go back to the consumers who were harmed. 

Mr. Stumpf, giving back your bonus isn’t going to make that go 

away. More rules and regulations aren’t going to make this go 

away. The fact is regulators sat in that bank for years and did 

nothing. Meanwhile, thousands of employees were being fired for 

these bad practices, yet nothing was changed to address the issues. 

The regulators need to be doing their job as well from day one. Instead, the institution pushed forward with a whatever-it-takes approach to meet sales targets, and regulators sat idly by, either oblivious or uncaring of these bad practices, even after reported in 

the news. And to top it off, regulators neglected to fulfill their enforcement obligations after the fact. Instead, they opted for a quick 

settlement and waived their right to pursue additional action for 

other violations so they wouldn’t be viewed as late to the game. 

Wall Street needs to be held accountable, but so does Washington. 

That’s what we’re here today for. 

So my question to you, Mr. Stumpf, first is, how many regulators 

do you have in your bank on a daily basis? 

Mr. STUMPF. I don’t have a precise count of that. 

Mr. LUETKEMEYER. Just roughly. 

Mr. STUMPF. I think there is—maybe the OCC, our prudential 

regulator, I’d pick 80, for example. 

Mr. LUETKEMEYER. Okay. The CFPB has some folks in there 

pretty regularly as well, do they not? 

Mr. STUMPF. I don’t know the number on that. 

Mr. LUETKEMEYER. Okay. I’m just kind of curious. As a former 

bank regulator, as well as a banker, this is a really, really disappointing situation for me— 

Mr. STUMPF. I couldn’t agree more. 

Mr. LUETKEMEYER. —from the standpoint that I tell people I’m 

shocked and dismayed. I’m dismayed that the bank allowed this to 

happen, because you did have a culture in place that allowed this 

to happen. And I’m shocked that regulators sat on their thumbs 

this long and did nothing. And while you’re being fined, which I 

think is appropriate, the regulators ought to be fined as well. For 

them to take the fine and keep it is a travesty. They need to be 

fined as well and let that money go back to consumers, because 

they were asleep at the switch as well. There is so much blame to 

go around on this, it’s unbelievable. 

A while ago, you made the comment that you have a good culture 

in your institution, that this shouldn’t be happening. Well, Mr. 

20 

Stumpf, your own testimony says that you’re firing a thousand people a year, a thousand people a year. There is only one way that 

can happen, in that there is a culture there that allows that to happen year after year after year. There is a laissez-faire approach to 

what you’re doing in your bank. Somewhere along the line somebody just ought to call a timeout and say, enough is enough, this 

can’t continue. And yet year after year, you’re firing people, trying 

to hope this thing goes away, and the regulators are watching it 

and still sitting on their thumbs. These actions must have consequences, and for not only you, but they need to have consequences for the regulators as well. 

Mr. STUMPF. Congressman, thank you for that question, because 

I want to tell you that we did do things. In 2011, within the business, they moved the compliance—or the concern for this issue into 

a compliance area. By 2012, they were reducing goals and doing 

more ethics training. By 2013, corporate resources were brought in. 

And we worked with the OCC. In 2014, more reductions in goals. 

In 2015—and the OCC also was in 2013—we did our study. This 

does not represent the culture. In fact, we do an outside company— 

Mr. LUETKEMEYER. I respectfully disagree with you, Mr. Stumpf. 

I’ve been in business like this all my life. You can’t tell me that 

when you have to fire people year after year after year after year 

that there isn’t a problem. Now, for a year or two, that’s one thing, 

but for 4 or 5 years? Your own testimony says this. 

I have another question. I need to go on. In my examining days, 

I examined a bank one time and found a teller skimming money 

out of her cash drawer. I took it to the president and he said, well, 

you know, she is a good employee, as long as she keeps it to a minimum, I think we’re going to be okay. My jaw hit the floor. This 

reminds me of that situation. As long as they keep it to a minimum, I think we’re going to be okay. My comment back to him at 

that point was, have you reported this to your blanket bond insurance company that has a dishonesty clause on it? 

Do you have a blanket bond or do you self-insure? 

Mr. STUMPF. We have a fidelity bond, and that’s why we draw 

a very bright line. When people do the wrong thing, they cannot 

be here. 

Mr. LUETKEMEYER. Okay. My question is, when did you report 

this action of your employees to your blanket bond company? 

Mr. STUMPF. I don’t—we have a group that does that, our corporate relations with our legal team. And I can assure you that— 

we can have our people get that to you. But there is a very bright 

line. 

Mr. LUETKEMEYER. This is a really, really big question, because 

if you didn’t report that immediately when you found this going on, 

and you allowed for year after year to have a thousand people— 

Mr. STUMPF. We do that. 

Mr. LUETKEMEYER. —your blanket bond company is going to be 

going bonkers over this. We will have a request for that and I hope 

you will answer that. 

Mr. STUMPF. We’ll work with your team. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Chairman HENSARLING. The time of the gentleman has expired. 

21 

The Chair now recognizes the gentleman from New York, Mr. 

Meeks. 

Mr. MEEKS. I can’t believe some of what I’m hearing here. So let 

me understand, you’ve been the CEO since 2007. You’ve been the 

chairman of the board and the CEO since 2010, is that correct? 

Mr. STUMPF. That is correct, Congressman. 

Mr. MEEKS. And in the time that you have been the chairman, 

I have a chart here that shows you’ve been penalized almost systematically every year since you have been in charge. Every year: 

$1.2 billion in April of 2016; $53 million in October of 2015; $4 million in June of 2015; another $24 million in January of 2015; $5 

million in September of 2014. And I could go on and on: $869 million in September 2013, while you were the CEO, right? 

And you’re going to tell me that there is not a culture of something wrong at Wells Fargo, when you are the head—you get credit, you get credit as CEO when you bring in all this money, because 

that’s how you get your bonuses. Is that not correct? You get a 

bonus from your board because ‘‘X’’ amount of dollars come in. But 

yet you are telling me that you don’t have the responsibility of losing your position when you have a culture of being fined and costing the bank year after year, month after month? There is no responsibility? You can just stay to be the chairman and the CEO? 

Is that what you want us to believe? 

Mr. STUMPF. Congressman, that is not the case. I serve at the 

pleasure of the board. I am willing, I’ve told you— 

Mr. MEEKS. Then the whole board needs to go, if they are going 

to allow someone to be in charge when time after time—you just 

talked about firing 5,300 employees. When you found out that they 

were doing something wrong, they were fired— 

Mr. STUMPF. Correct. 

Mr. MEEKS. —because they were doing something wrong. Well, 

something is going wrong at this bank, and you are the head of it. 

So shouldn’t the board then turn—from your own admission, if the 

buck stops with you, as you came out here and said, I apologize, 

the buck stops with me, 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. 

Mr. STUMPF. Again, Congressman, the board has that power. 

And my energy right now is to lead this company forward. I also 

want to remind— 

Mr. MEEKS. But you came here and you started out by saying, 

I apologize, et cetera. If somebody walked into Wells Fargo tomorrow and robbed your bank or defrauded your bank and then after 

they are caught they say, well, I’m sorry, I’m going to take full responsibility for robbing this bank and I am sorry that I robbed this 

bank, so please don’t prosecute me because I am sorry now that I 

robbed this bank, would you allow the person just to walk out after 

robbing your bank because he is now sorry that he robbed this 

bank after he took the money already? 

Mr. STUMPF. Congressman, I see something very different between being honest and breaking our code of ethics and taking advantage of customers. 

Mr. MEEKS. You didn’t break the code of ethics? Do you realize 

that you have not only given—will you admit that not only does 

22 

your bank have a black eye, but that your bank, Wells Fargo, has 

given the entire financial services industry a black eye? Your responsibility. 

You heard Mr. Sherman say—and I agree with him—that he 

wants everybody to come in here. Why? There’s only one reason 

why. Your bank, you, CEO, chairman, basically for me, was on top 

of what basically has been a criminal enterprise. Because when I 

look at consistency, time after time after time and time again, you 

have to get fines. Now, it must mean that you’re making a lot of 

money, because it’s easier to pay the fine because you know that 

nothing else is going to happen to you. So you pay the fine, you 

get away, you make a lot of money. 

Now, I’m upset. I’m from New York. I believe in financial institutions. That’s why I’m so mad. I believe that they make our country 

better, until they rip us off. And they ripped us off tremendously, 

taking advantage of customers and consumers when we had the financial crisis. I’ve got individuals right now who are on the street, 

on the street. They are not back in their homes. They had these 

fraudulent mortgages. Nobody has said, oh, I’m sorry that we gave 

you these fraudulent mortgages, we’re going to put you back in 

your home and we’re going to make sure that everything is okay. 

No one has done that for them. You haven’t volunteered to do that. 

Will Wells Fargo put people back in their homes? 

Mr. STUMPF. Congressman, if I could just respond for a second, 

please. There is no question we didn’t do everything right and 

we’ve made mistakes. We’re upping our game. 

Mr. MEEKS. So who should pay for it? If you didn’t do anything 

right, who is accountable for it? 

Mr. STUMPF. We’re going to make it right for every one of our 

customers. 

Mr. MEEKS. Your VP made a $125 million bonus package. Your institution is making over $22 billion a year. Who is paying for it? 

Who is taking responsibility for it? Don’t come tell me you’re sorry. 

Mr. STUMPF. We’re taking care of every one of our customers who 

was impacted. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Wisconsin, Mr. 

Duffy, chairman of our Oversight and Investigations Subcommittee. 

Mr. DUFFY. Good morning, Mr. Stumpf. I want to tell you that 

I’m a 20-year customer of Wells Fargo. I actually started at 

Norwest. 

Mr. STUMPF. Oh, thank you. 

Mr. DUFFY. My wife was with Wells Fargo. We got married and 

it made it easy to join our accounts. I’ve had a pretty good experience with your bank, that’s why I’ve been there for 20 years. The 

people I’ve dealt with have treated me incredibly well and that’s 

why I’m there. 

But what I’m hearing today is incredibly disturbing. And so I 

just want to make sure you and I are on the same page. How do 

you classify what Wells Fargo did with this potentially 2 million account holders? 

Mr. STUMPF. Well, the 2 million account holders were—accounts 

were about—the PwC looked at 93 million accounts. The 2 million 

are— 

23 

Mr. DUFFY. No. 

Mr. STUMPF. I’m sorry? 

Mr. DUFFY. Was this fraud? Was this just an HR problem? Was 

this theft? How do you see this? 

Mr. STUMPF. The 2 million accounts could not be ruled out as— 

Mr. DUFFY. I’m asking about, well, how do you classify, when you took $22 to $25 from whatever the number is, maybe it’s $1 million, maybe it’s $2 million, how do you classify that? 

Mr. STUMPF. Well, I think it was dishonest, it broke our code of 

ethics, and the people who are responsible— 

Mr. DUFFY. Was it theft? 

Mr. STUMPF. Pardon me? 

Mr. DUFFY. Was it theft? Did you steal? 

Mr. STUMPF. Our people did not do what was right. 

Mr. DUFFY. That’s not my question. Did you steal? I want to 

know if you and I are on the same page. Did Wells Fargo employees steal from 1 million to 2 million of their customers? Yes or no? 

Mr. STUMPF. In some cases, they did. 

Mr. DUFFY. They did? 

Mr. STUMPF. Yes. 

Mr. DUFFY. And so as Wells Fargo, back to 2011, is stealing from 

their customers—and by the way, banking is based on trust. 

Mr. STUMPF. Correct. 

Mr. DUFFY. Right? So I don’t care if it’s 10 percent or 1 percent 

or 1/2 percent of the people that you do business with, if you’re 

stealing from them in 2011, a thousand people are fired for stealing, and what do you do? You don’t fix the problem. And a thousand people are fired in 2012, and you don’t fix the problem. And 

in 2013, 1,200 people are fired, and we still have a problem, and 

you’re stealing from people. So how do you—I guarantee you that 

any bank in my community, if they were stealing from someone at 

the lower level, fired and fix the problem on day one. 

Mr. STUMPF. That’s what we’re trying to do. In fact— 

Mr. DUFFY. No, no, no, no. Don’t tell me, ‘‘trying to do.’’ We’re 

5 years on. 

Mr. STUMPF. Let me just say something about how we understood this problem. We didn’t—when somebody would open an unauthorized account, a savings account or a checking account, it was 

not until—and when an account gets opened and not funded—it’s 

really important, please. When it’s opened and not funded, it gets 

auto-closed. We didn’t believe, as we looked at that, until sometime 

in 2015, that there could be the possibility of a zero account that 

could affect a customer. 

Mr. DUFFY. You have got to be kidding me. 

Mr. STUMPF. No, that was absolutely our analysis. 

Mr. DUFFY. You told us earlier the board members—you were not 

saying that you knew, but board members knew in 2011. They 

were looking at this. And if they’re looking at 1,000 people fired, 

that they don’t know why they’re being fired, that they don’t look 

in to say, what were these people doing that caused them to be 

canned? And they look, they just pull the curtain back a little bit 

and they go, man, whether you want to call it defrauding our customers or stealing from our customers, Wells Fargo has a big problem. 

24 

So that you tell me that it took 1 year, 2 years, 3 years, to 2015? 

I don’t buy it. What I think is Wells Fargo was making a lot of 

money off what you were doing, and I think that you were hoping 

that you wouldn’t get caught. And so it’s a risk of doing business. 

You know what? We’re willing to fire a few people so I can come 

in here and say, weren’t we great? We fired a couple of people, we 

were trying to make it right, but we kept the practice in play because we were making big profits. 

Did you end the practice? Is this over? 

Mr. STUMPF. Yes. We’re stopping all of our sales goals, but let 

me just— 

Mr. DUFFY. How did you stop it? How could you stop it now, but 

not in 2011 or 2012 or 2013 or 2014 or 2015? 

Mr. STUMPF. Well, we should have done more earlier. We should 

have done more earlier, but it’s really important I make this point, 

please. The $2.6 million of fees that were on accounts, these 2 million accounts that we could not rule out, 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 customers use products. 

Mr. DUFFY. Oh, it’s a loser for you, I guarantee that. 

Mr. STUMPF. It only helps when customers—I’d rather have a 

customer have two products they use than four they don’t. We’re 

totally aligned with customer— 

Mr. DUFFY. The concern that we have, Mr. Stumpf—and I told 

you, I like Wells Fargo, I’ve been there 20 years—is that you were 

turning a blind eye to your customers who were being stolen from, 

people who couldn’t afford $22, people who couldn’t afford $25, and 

that you didn’t fix that problem. In an institution that is based on 

trust with your customer, that you didn’t take this seriously, that 

you didn’t remedy it, that it has taken this long. Shame on Wells 

Fargo. 

And I didn’t get to my question, but I will hopefully at one point 

hear you testify to how many CFPB employees were embedded at 

Wells Fargo. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Massachusetts, 

Mr. Capuano. 

Mr. CAPUANO. Thank you, Mr. Chairman. 

Thank you, Mr. Stumpf. I want to thank you particularly for 

doing something here today that no other person has been able to 

do in the last 4 years. You have brought true bipartisanship to 

Congress. We’re all together on this. We are not happy. 

The last—oh, they already started. But the last few minutes, 

they’ve been running a graphic in the back, and my colleague had 

went through some of them. And I think it’s important to know 

what some of the other things you have done, what they were. 

They weren’t just fines. You screwed student loan holders, credit 

unions, Fannie Mae, Freddie Mac, mortgage holders, African-Americans, Hispanics, healthcare workers, on and on and on. 

And by the way, I understand this isn’t material. Just 5 months 

ago you paid $1.2 billion in a fine. This is only 15 percent of that. 

Ah, who cares. We’ll pretend to be sorry, we’ll fire some workers, 

and we’ll get through this. You know where I heard that before? 

25 

The guys who ran Enron and the guys who ran Arthur Andersen 

thought the same thing. 

We’re not your problem. We can’t criminally prosecute you. You 

can keep—hell, you’re your own boss. You are the CEO and the 

chairman. Hold yourself to accountability. Oh, my God, you’ve been 

bad. Oh, no, you haven’t. That’s ridiculous. Your problem is coming. 

It’s not today. You think today is tough? It’s coming. When the 

prosecutors get ahold of you, you’re going to have a lot of fun. So 

I want to thank you for that. 

I want to ask you—you have the graphic up here—do you know 

this guy? See, I’m not a real good researcher. I’m not a prosecutor. 

This is simple Internet research. That’s all I’m capable of doing. 

Google it. Wells Fargo. Boom, a whole bunch of stuff shows up. 

This is Mr. Robert Holmes, who apparently robbed your bank in 

Lancaster, Pennsylvania. He did not use a weapon. He got caught. 

They got all the money back. He is in jail as we speak on a 

$750,000 bail. 

You, on the other hand, have run an enterprise that has a culture of corruption. You encouraged subordinates to abuse existing 

customers by opening fake bank accounts. You charged those victims illegal fees, interest, and late charges, and then you sent some 

of them to collection agencies because they didn’t pay them. Then 

you fired 5,300 workers, as if you care, to cover everybody’s tracks. 

In my opinion, you and your entire leadership team are clearly and 

unequivocally guilty of at least conspiracy to commit fraud, conspiracy to commit identity theft, clearly racketeering, which is 

something a lot of my friends know something about, and probably 

a dozen other crimes. 

One simple question: What the heck is the difference between 

you and Mr. Holmes? Why shouldn’t you be in jail? He didn’t use 

a gun. You got the money back. I understand that at his arraignment, he said he was sorry. What’s the difference? Why shouldn’t 

you be in jail right along with Mr. Holmes? 

Mr. STUMPF. Congressman, I think that when you do something 

unethical or dishonest, which I’ve tried to exercise my duties as a 

leader in our senior leadership team to stop— 

Mr. CAPUANO. You haven’t done a very good job. You’ve had 16 

violations in 5 years. That’s a good job? This is a minor fine. You’ve 

had a lot of—this is only the seventh largest fine you’ve had. 

You’ve had six others that are a lot bigger. That’s a good job? I 

guess I forgot. You’re the one judging yourself, because you’re also 

the chairman of the board. I actually think I’m the greatest Congressman in the history of the world. I should be Speaker, President, and maybe emperor of the world. That’s my judgment of myself. Sound good to you? 

Mr. STUMPF. There is no question that we’ve done things that we 

need to improve on and we’ve paid fines. And we’re trying to get 

better in every one of our businesses. 

Mr. CAPUANO. So if Mr. Holmes pays a little fine, a few bucks, 

based on the amount of money he stole and the victims he had, you 

think he should be let out and have no criminal record? 

Mr. STUMPF. Again, being dishonest and breaking the law is 

something very different. 

26 

Mr. CAPUANO. Oh, so it’s not breaking the law stealing my identity and opening an account that I didn’t ask for. 

Mr. STUMPF. And our culture is about not doing that. We train 

for that not to happen. 

Mr. CAPUANO. I don’t know what kind of a culture. You have 16 

violations and 5,300 employees that you say did it— 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from California, Mr. 

Royce, chairman of the House Foreign Affairs Committee. 

Mr. ROYCE. Thank you, Mr. Chairman. 

Mr. Stumpf, the idea of a cross-selling target of at least eight 

products clearly is part of a long-term practice at Wells Fargo, 

going back at least to your predecessor, because in 1998, Fortune 

Magazine quotes doubling the average product purchase to eight as 

your predecessor’s ‘‘current obsession.’’ 

Morphing the goal to a mandate here seems to be a big part of 

the problem. And I say mandate, because if people are fired for not 

hitting that goal, it’s a mandate. And that seems to be at the center of a toxic sales culture that you’ve overseen. 

But I’d ask you, was the goal of eight cross-sold products something understood and embraced by management and by your sales 

force? 

Mr. STUMPF. It was a rallying cry to help work together. The average consumer household has about 14 financial products. 

Mr. ROYCE. Okay. I understand, but I’m going to ask you a question. In retrospect, do you think that target contributed in some 

way to the negative change in your sales culture? 

Mr. STUMPF. We never had a target of eight. Again, it was aspirational. We had team members who would work with customers 

on need-based selling. And when they did that right, the customer 

won and it was good for us. 

Mr. ROYCE. Did you read the L.A. Times article when it came out 

in 2013? 

Mr. STUMPF. I’m sure I did. I can’t recall it right now. 

Mr. ROYCE. Was it something discussed at the board level? 

Mr. STUMPF. We did discuss the L.A. Times article. 

Mr. ROYCE. Well, here’s my question: Did the information in that 

article give you pause about reporting cross-selling metrics or ratios in your annual reports, in your quarterly reports, in the analyst conference calls that were clearly inflated here by fake accounts generated by your sales force? 

Mr. STUMPF. We love cross-selling because it helps define— 

Mr. ROYCE. Look, I understand your argument about that. Here’s 

the question: If you know fake accounts are going into that ratio, 

why would you keep reporting that ratio? Because I’ve got a copy 

here of your Investor Day. I’ve got a copy of what is in your 

quarterlies. And, you turned to Mr. Duffy here when he was asking 

the question, and you were saying, well, it isn’t that material in 

terms of our bottom line, in terms of the fee income from these fake 

accounts. 

But what you’re reporting on your products per household is a 

constant upswing quarter by quarter by quarter. It certainly is material, in terms of the stock price. What you were doing in constantly reporting these ever-increasing numbers was driving your 

27 

stock price up. And the point I’m making is, you have this story 

in 2013 that shows how much of that was based upon fraudulent 

behavior. That becomes material, right? 

Mr. STUMPF. Well, let me just talk about that specifically. The 

cross-sell ratio, even if you include all 2 million accounts in that— 

and we know we can’t because we’re already finding out in credit 

card that 75 percent—or less than 25 percent either did not order 

it or do not remember. We’ve looked back for all the quarters going 

back. I can’t remember, it was 2010 or 2011, and it has a, I think, 

1/200 of one product impact. And it’s absolutely immaterial. 

Mr. ROYCE. Look, Mr. Stumpf, this is a California company. 

You’ve got a lot of California customers. You’ve got people all over 

the world dependent upon this company. You’ve got your employees, and from what I understand, a thousand of them being fired 

a year connected to this. I believe rebuilding the trust and righting 

the wrongs is going to take a course of action here that I’ve yet to 

see you set. 

And through opening unauthorized accounts or playing the shell 

game with a person’s money, your employees and your company 

negatively impacted the credit of many people in this country. And 

I just want you to think for a minute about what that meant, in 

terms of their ability maybe to qualify to get that home or maybe 

to qualify to get that car or maybe, in terms of the student loan, 

to send that son or daughter to university. Not to mention, again, 

working Americans wrongfully terminated by your company. For 

what? Refusing to break financial laws. Refusing to break ethical 

laws. That’s what we have to come to grips with here. And this is, 

at the very least, the result of actions over the last 5 years. That 

didn’t happen by accident. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Massachusetts, 

Mr. Lynch. 

Mr. LYNCH. Thank you, Mr. Chairman. 

I have a unanimous consent request to enter into the record a 

letter sent by Ranking Member Cummings, the gentleman from 

Maryland, ranking member of the Oversight and Government Reform Committee, to Mr. Stumpf requesting related documents by 

October 13th. 

Chairman HENSARLING. Without objection, it is so ordered. 

Mr. LYNCH. Thank you, Mr. Chairman. 

I would also like to ask the chairman to consider doing a hearing 

at a later time with a number of the employees, both whistleblowers who were fired and others who were fired for retaliatory 

attempts to provide information on the fraudulent conduct being 

conducted at Wells Fargo. I’m aware of at least three U.S. Attorneys who have also issued subpoenas in this case, so I’m hopeful 

that we may eventually get to the bottom of this. And while the 

City of L.A., the City attorney there and the CFPB and the OCC 

have done good work in this case, the fines thus far are pathetic, 

really, totally inadequate to try to bring Wells Fargo into compliance with the law. 

And that is certainly reinforced by the way, Mr. Stumpf, you 

have diminished the offenses that have gone on at your bank. It 

is really proof positive that whatever the OCC has done is not adeVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
28 

quate to make you realize the level of your offenses here. Again, 

5,300 employees were fired. Up to 2 million fraudulent accounts. 

And this has gone on for at least 5 years. 

I want to point out here—and Mr. Duffy has hit on this—this is 

the banking industry. Actually, it exists based on trust. And what 

your employees did, at least—well, as many as 565,000 fraudulent 

credit cards were secretly opened by your employees using the Social Security numbers of your customers. So they opened fake credit cards so they could charge them for that. They assigned fictitious 

PIN numbers when the customer didn’t even know that was going 

on. They put PIN numbers. And then they assigned email addresses so they could comply with it and get the bonus so that the account was open. And these are your customers. 

Now, we’ve had credit card companies up here who have sent 

credit cards to noncreditworthy borrowers and seniors who didn’t 

understand what they were getting, but in this case, these are your 

customers. These are the people who became victims because they 

did business with your bank. That is unbelievable. 

And I know that Mr. Meeks and Mr. Capuano before me have 

made comparisons to criminal activity, but I do want to note that 

under the Racketeer Influenced and Corrupt Organizations Act 

(RICO), you’ve satisfied that. You’ve satisfied all the elements of 

that. Two of the predicate offenses under RICO: Number one is 

fraud, and there is no question about that. Mail fraud, securities 

fraud. You’ve done it all. You’ve covered basically every aspect of 

fraud in your bank over the last 5 years. 

And secondly, in many cases, these employees, these whistleblowers were intimidated or fired. You have an HR employee here 

who says you had a system to retaliate in your bank against whistleblowers. And that’s another predicate offense under RICO. 

So let me ask you, as the CEO and chairman of the board, you 

had a responsibility to file suspicious activity reports (SARs). 

Mr. STUMPF. Correct. 

Mr. LYNCH. Right. You have up to 2 million separate accounts 

being opened, up to 565,000 bogus credit cards being opened by 

your employees in secret against your customers. And yet when we 

asked FinCEN, when we asked the Treasury Department for the 

suspicious activity reports that you filed, they don’t match up. 

You’re not in compliance. 

Mr. STUMPF. Let me just say a couple of things. We filed—we did 

everything that was necessary to abide by every regulator and regulation issue— 

Mr. LYNCH. Are you saying you filed suspicious activity reports 

on— 

Mr. STUMPF. I can’t say on that, because that’s— 

Mr. LYNCH. Well, it’s your responsibility. Let me read you the 

law. I will close with this. 

Mr. STUMPF. It’s a responsibility, but that there is actually a prohibition—I have to do what’s right according to the law. 

Mr. LYNCH. Let me just explain. All right. This is my time. I’m 

claiming it back. 

This is under the Bank Secrecy Act and Anti-Money Laundering 

statute: ‘‘The board of directors, acting through senior management, is ultimately responsible for ensuring that the bank mainVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
29 

tains an effective Bank Secrecy Act/AML internal control structure, 

including suspicious activity reporting and monitoring.’’ 

Mr. STUMPF. And we do that. 

Mr. LYNCH. That’s your responsibility. 

Mr. STUMPF. And we do that. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Oklahoma, Mr. 

Lucas. 

Mr. LUCAS. Thank you, Mr. Chairman. 

Mr. Stumpf, while my day job is that of a Congressman, I am a 

farmer by trade and my university degree is in agricultural economics. And looking at your resume, about the time you were entering into the banking industry 30-some years ago, I can remember taking a class on money and banking at Oklahoma State. We 

had a professor who was very enthusiastic about the market economy. And we discussed how the banking model we use now went 

back essentially 500 years to Italy, and the concept that under a 

market economy, bankers were the individuals who determined 

what savings were worth and pooled those and, by the same token, 

made risk determinations, figured out what the cost of money 

should be, and allocated that out through loans. A glowing example. And he would compare Western Europe at the time, North 

America, much of the rest of the world, how effective that was compared to the demand economy model of the old communist countries at the time, China, Russia, all of those sort of places. A very 

glowing discussion. 

I don’t know that I have a particular question for you about 

what’s gone on. I think between the other committee and my colleagues here, that they’ve done an exceptional job of getting the 

facts. And I suspect, as a number of my colleagues have discussed 

quite straightforwardly, that this has legal implications far and beyond the activities of this committee or the other committee and 

the other body. 

But I’d say, Mr. Chairman, the most challenging thing you’ve 

done is, by the actions of your company, by your management of 

the company, you’ve made it really hard for those of us who are 

defenders of the market economy to continue to maintain the system that has helped drive this successful enterprise called the 

United States of America and the free market system. That’s probably the most tragic thing about this. 

Now, in those econ classes, he used to lecture us about the concepts of enlightened self-interest. That’s the nature of any consumer. That’s the nature of any businessperson. But then there are 

the responsibilities that we used to talk about of good corporate 

citizenship, about self-restraint, about not pursuing greed. 

I guess I’d just simply note to you, sir, whatever ultimately legally comes out of this process—and clearly, a number of my colleagues think something will—or whatever your stockholders determine or your fellow board members, you’ve just made it really hard 

for those of us who want to maintain that concept of a market 

economy, who want to continue to make sure that bankers, not 

some bureaucrat somewhere or the arbitragers of capital, to effectively make this country move forward. 

30 

I don’t know how you correct this, but I suspect, sir, when you 

interact with your peers within the industry, you’re going to have 

some challenges for a long time to come, because the brush with 

which you will be painted will stroke all of them too. And I suspect 

that’s blatantly unfair and it’s unfortunate. But then, I’m just a 

farmer by trade, a multigeneration debtor, working hard to service 

my debts every year. But you have to think about that. You have 

to think about that, what this episode has done to your industry 

and ultimately to me and all of my fellow consumers out there. It’s 

just very unfortunate. 

Mr. STUMPF. May I make a comment? 

Mr. LUCAS. Please. 

Mr. STUMPF. Thank you. And we take this very seriously. And 

I also come from a farm. I understand what it’s like to be on a 

small farm—or at least ours was small with a large family. I know 

right from wrong. I know we have a lot of wrongs to right here. 

But I also want to tell you that Wells Fargo is a great corporate 

citizen. We employ 268,000 wonderful team members across the 

country. We have a culture based on ethics and doing what’s right. 

Not everyone does that. We’ve made mistakes. We’re one of the Nation’s largest taxpayers. We’re one of the largest philanthropic organizations. We’re involved in our communities. And we have a lot 

of work to do. There is no question about that. 

But I stand with our—the people who are doing the right thing, 

who honor our culture and our ethics. They are terrific people and 

they are out there with our customers every day. And we have 

work to do, I understand that. 

Mr. LUCAS. A disservice has been done to them. 

With that, Mr. Chairman, I yield back. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Georgia, Mr. 

Scott. 

Mr. SCOTT. Yes, Mr. Stumpf, this is one of the most outrageous 

acts that any banking executive has done in my lifetime that I 

know of. How in the world could you in good conscience set up 

these fraudulent accounts? What was going through your mind 

when you were doing this? 

Mr. STUMPF. Congressman, I didn’t set up any of these accounts. 

I—our team worked together at the business level, then at the corporate level to find these— 

Mr. SCOTT. Wait a minute, Mr. Stumpf. 

Mr. STUMPF. We found these accounts and we found these people 

and we said, that behavior is not acceptable. 

Mr. SCOTT. Mr. Stumpf, you took advantage of unsuspecting 

loyal customers. People in almost every single district that’s represented on this Financial Services Committee. You did that. And 

you are the chief executive officer. You set the tone. And you 

should be downright ashamed of yourself. And you should apologize 

right now if you have any strain of respect for the people of the 

United States, for the customers that you have defrauded with this, 

for the rancid example that you are setting. And not only that, for 

the damage that you yourself with your action is being done to the 

entire banking industry. Because you know what, all this crossVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
31 

selling, now you have caused an extraordinary spotlight to be focused on every bank in this country. You have done that. 

Mr. STUMPF. Congressman— 

Mr. SCOTT. And you should apologize. 

Mr. STUMPF. I have said in my opening testimony I am sorry. I 

am accountable for this. I’m very sorry that we broke trust with 

our customers, our communities, the American people. I am deeply 

sorry for that. I’m going to do everything I can to repair that. 

Mr. SCOTT. And you know what hurts me so much? I’m one of 

your customers. I have an account in Wells Fargo in the bank in 

Atlanta, Georgia. I was on the phone with my district director 

about this. And she has told me that in our constituent services, 

when it comes to the mortgage assistance, particularly with the bill 

that we passed here, the Hardest Hit bill, and which we’re offering 

and helping those people with mortgages, to be able to pay up to 

24 months of free mortgages, and she says, we have no better cooperation from the staff of banks than we have from Wells Fargo. 

Mr. STUMPF. Thank you. 

Mr. SCOTT. I’m your customer. And what’s it doing? 

Mr. STUMPF. Thank you. 

Mr. SCOTT. But the example that you set is just absolutely terrible. 

Now, what I want to ask you is—because my number one concern is my constituents in Georgia. Let me ask you, could you tell 

us exactly how many customers of yours in my home State of Georgia had fraudulent accounts set up in their name without their consent? How many in Georgia? 

Mr. STUMPF. I can get that for you if I have the right—sorry. I 

know I’m using up your time here. 

Mr. SCOTT. Well, maybe the chairman will give me a little extra 

here. But it’s important for us to know how many in— 

Mr. STUMPF. In Georgia— 

Mr. SCOTT. Yes, sir. 

Mr. STUMPF. —we had 55,579 accounts that we could not rule 

out as possible. Again, now, I just— 

Mr. SCOTT. 55,000? 

Mr. STUMPF. I need to—if you may let me, we’re finding out that 

on the credit card side, less than 25 percent did not want those or 

did not remember. 

But here’s my commitment to you, Congressman: We’re going to 

work with every one of these accounts and make it right for every 

customer. That is our commitment. I’m interested in results, not in 

process here. Each account, we’re going to take care of it. 

And I don’t care whether there was—the biggest thing here is 

secondary harm. I want to make sure that—I think it was asked 

by another Congressman or Congresswoman about that issue. We 

take this very seriously. 

Mr. SCOTT. My time is scratching down. Here’s the fundamental 

question I want to ask you: Do you think what you did was criminal? 

Mr. STUMPF. I’m not a criminal attorney. 

Mr. SCOTT. No, but do you think that? 

Mr. STUMPF. I led the company with courage and with— 

32 

Mr. SCOTT. If another bank president had done this, or chief executive officer, would not you say it’s criminal? 

Mr. STUMPF. I didn’t break our code of ethics and I didn’t do anything dishonest. 

Mr. SCOTT. Thank you, Mr. Chairman. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from New Mexico, Mr. 

Pearce. 

Mr. PEARCE. Thank you, Mr. Chairman. 

Thank you, sir. I appreciate you being here. I suspect it’s not all 

fun. 

So you’ve talked about the 5,300 who were terminated. How big 

a percent of the people in the company who were terminated—surely out of 268,000 people, you’d get more than 5,300 terminated. So 

what percent of the terminations did that actually represent? 

Mr. STUMPF. I don’t have that. I can work with our team and 

see— 

Mr. PEARCE. Don’t worry about it. That’s okay. 

Mr. STUMPF. I don’t have that. 

Mr. PEARCE. So just looking at this from a 30,000-foot viewpoint, 

and keep in mind I’m like Mr. Lucas, I grew up on a small 5-acre 

farm. Dad was a sharecropper before he went to work as a roustabout. We had a blue-collar company, just working there in the oil 

fields of southeast New Mexico. So all the numbers that get thrown 

around here are a little bit big. 

But I can’t fathom somewhere in the process that you had 5,300 

people terminated and that doesn’t come to your attention as a 

CEO. You get calls on the ethics line saying, hey, we’re doing unethical stuff, in 2008, according to one of the other people. According to your comments, people inside your company are breaking the 

law, they’re creating criminal acts, and that doesn’t come to your 

attention. You get $10.8 billion in settlements, and that doesn’t 

come to your attention. 

So, if I’m sitting here thinking about this stuff just coming in a 

clear just quiet room, board, seeing these things, at some point 

somebody’s going to say, Houston, we have a problem. But it 

doesn’t appear that anybody ever said, Houston, we have a problem. The L.A. city attorney brings charges and nobody on the board 

says, Houston, we got a problem. In your assessment, looking back, 

what was it that would cause all those things to go under the radar 

and not be recognized, not be seen? 

Mr. STUMPF. Thank you for that question. As we learned more 

about this issue, we made investments. We made investments in 

training, we reduced sales goals, we brought in a regulator. 

Mr. PEARCE. I understand. You’ve already—you’ve been through 

that. 

Mr. STUMPF. Okay. 

Mr. PEARCE. What kept you from seeing? What kept this from 

rising to the—I’m sure that today, that you probably consider the 

problem somewhat different than you did in 2011, 2012, 2013, 

2014, 2015. Why did not you see the importance that you would attribute to it today at any stage of the process? 

Mr. STUMPF. Congressman, it’s a good question. I’ve said in my 

testimony. I’ve said— 

33 

Mr. PEARCE. I read your testimony. I did not see the answer. So 

since you appear not to want to see it, I’m sitting here—and a balance scale, as a business manager, is always there. Do we want to 

take that job cleaning out that well and we can’t clean it out and 

we get a bad reputation? Well, it’s worth a lot, maybe we will or 

maybe we won’t. 

Are we going to overlook the numbers of terminations? We’re getting the calls. Don’t we really want to investigate? Stock price is 

doing okay. My compensation is okay. You get the balances there. 

Your compensation in that period of time is approximately $200 

million. That would cause one to say, I think things are running 

okay. Yes, maybe we got that little problem over there. 

But another thing on the side of the scale that says I don’t want 

to look at this or I can’t see $10 billion in settlements, that it just 

doesn’t come to my attention, 5,300 terminations doesn’t come to 

my attention, because we have 260,000 employees. Obviously, we’re 

doing things 99 percent right. Forget the 2 million people that 

we’ve defrauded. Mostly we’re doing okay. 

And so I see size and complexity being a great problem. When 

you can’t see 5,300 people being terminated, when you can’t see 

$10.8 billion in settlements, then you’ve got a problem in size and 

complexity. And I would say that there is no community banker in 

this country that would not have seen people doing illegal acts. 

And so maybe it was your stock compensation. Maybe it was the 

size and complexity. But, sir, I think today, listening to things that 

everyone has said, you have proved that you did not offer leadership in this. You have kind of shirked around and said the board 

can do anything it wants at any time. I, sir, think you ought to 

submit a resignation, and your board cannot hold off action on 

that. 

Thank you. I yield back. 

Mr. STUMPF. Mr. Chairman, may I just make a comment about 

that? 

Chairman HENSARLING. The witness may comment. 

Mr. STUMPF. We did take accountability. We did invest in things 

to help reduce this, and we saw the numbers coming down. 

Mr. PEARCE. The problems continued, sir. The problems continued right on through your actions. In 2011, you did this; in 2013, 

you did that; and the problems continued. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Texas, Mr. Green, 

ranking member of our Oversight and Investigations Subcommittee. 

Mr. GREEN. Thank you, Mr. Chairman. I thank the ranking 

member as well. I’m grateful that you have given us a very positive 

response and we are holding this hearing. 

Mr. Chairman, with $5.6 billion in earnings in the second quarter, Wells Fargo is not in this because of need. This is about greed. 

It’s about the same kind of greed that created credit default swaps, 

that created negative amortization, that created no-doc loans, that 

created prepayment penalties that coincided with teaser rates, the 

same kind of greed called exotic products that created the housing 

bubble. This greed has caused this cross-selling to become the 

34 

equivalent of an exotic product, a product that has now created a 

cross-selling bubble for Wells Fargo. 

The cross-selling bubble exists because you were marketing yourself as a company in a growth mode by virtue of the new products 

you were having with your customers. You had customers who 

were coming in and you were growing. This enticed investors. It 

enticed consumers to buy your stocks. When your stocks were 

bought, it benefited you and top-level executives, to the detriment 

of lower-level entry employees. They got fired, top-level executives 

get golden parachutes, and it’s business as usual. 

Well, Mr. Chairman, this will not end by simply having some 

lower-level employees go to jail. If top-level executives go free and 

lower-level employees go to jail, it doesn’t end it, because there is 

no reason for this to cease and for top-level employees to be more 

mindful of what’s going on. 

So we’ve reached a point now where the public expects to see 

more than lower-level people punished: 5,300 working people who, 

by what I seem to read, were encouraged to the point of having 

themselves coerced to engage in this activity. These were people 

who were trying to make a living, not trying to make a big bonus 

and a big payday. These people deserve a fair day, not just an exit 

from your company. 

And what do I mean by a fair day? I think they deserve an opportunity to be heard in terms of what happened at Wells Fargo 

to cause them to do what they’ve done. I think that they ought to 

be given an opportunity to come before Congress. They ought to be 

able to explain. 

And I would also add this: We have to find out how pervasive 

this bubble is. We have to. We do have to bring before the Oversight and Investigations Subcommittee other CEOs, top-level executives, and let them tell us. And I think that we have to start 

with you. 

So tell me, please, sir, how commonplace is this cross-selling in 

the banking industry? 

Mr. STUMPF. Thank you, Congressman. For our company, crosssell is a good thing because it represents the depths of— 

Mr. GREEN. If you would, I’m going to have to intercede. I have 

to intercede, because I’m asking you about the industry now. 

Mr. STUMPF. I have no idea. 

Mr. GREEN. You have no idea as to how pervasive the product 

is? 

Mr. STUMPF. I don’t know what other companies use. 

Mr. GREEN. Well, are they using cross-selling? Are you saying 

you have no belief or no idea that other companies are cross-selling? 

Mr. STUMPF. I do not have that. 

Mr. GREEN. I must tell you, I cannot believe your answer. You’re 

telling me that you have no idea as to whether or not they even 

engage in cross-selling? 

Mr. STUMPF. I don’t know their performance management. 

Mr. GREEN. Well, do you know that they engage in it? 

Mr. STUMPF. Every bank, every retailer out there has some motivation, some way to make sure they recognize their people. 

Mr. GREEN. Do they engage in cross-selling? 

35 

Mr. STUMPF. Well, I don’t know. I don’t know their situations. 

I’m honestly— 

Mr. GREEN. You don’t talk to your colleagues? You don’t talk to 

other bankers? You have no idea as to whether they engage in 

cross-selling? 

Mr. STUMPF. I don’t know what they use. 

Mr. GREEN. Well, listen, I thank you for your answer—let me finish. 

Because, Mr. Chairman, this is the evidence that we need to 

bring the others in. We have to ask them what they’re doing, given 

that this gentleman refuses to give us what I believe to be a correct 

answer. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Florida, Mr. 

Posey. 

Mr. POSEY. Thank you, Mr. Chairman. 

Mr. Stumpf, members of this committee have already expressed 

the outrage that we all feel, that this atrocity was able to happen. 

It’s absolutely deplorable that your customers were subject to this 

practice. And I’m sure the fine that Wells Fargo will pay will be 

insufficient to comfort the customers or adequately compensate 

them. 

At best, at the very best, you and our Federal regulators were 

asleep at the switch. At worst, it’s almost, if not, a criminal enterprise. My biggest concern—and I think it’s the biggest concern of 

every Member on both sides of the aisle here—is that we need to 

ensure that it doesn’t ever happen again. That means we have a 

shared interest in understanding what caused and what perpetrated the unprecedented level of fraud. And I have just a couple 

of questions that I think will help drive us in that direction to understand it. 

First, Mr. Stumpf, I understand that Wells Fargo sets goals for 

new banking products each employee was expected to sell daily. Is 

that correct? 

Mr. STUMPF. I don’t believe that’s the case. I know, as part of our 

reward system and our performance management, that products 

were part of their performance management, along with customer 

service, customer loyalty, doing things right. But, again, as of this 

Friday, we’re getting rid of those goals. 

Mr. POSEY. Okay. I’ve read a range of reports that put the sales 

goals somewhere between eight to five new sales each day, compared to the reported industry standard of three to five per day. 

Briefly, I was going to ask you if you could give us an idea of 

how the goals were determined? 

Mr. STUMPF. Within our business. I wasn’t part of that process. 

And I don’t know if that’s an—you made reference to an industry 

standard and what ours is. I wouldn’t have specific— 

Mr. POSEY. Okay. 

Mr. STUMPF. I can try to get back to you on that. 

Mr. POSEY. Are you aware if the expected targets vary between 

bank branches of different size, location, or constituencies? 

Mr. STUMPF. I believe that is the case, yes. 

Mr. POSEY. You think they did. 

36 

Mr. STUMPF. I believe that was—I don’t know when that was introduced, but I believe in the past, at locations that would have 

more activity, we’d either have more bankers or more— 

Mr. POSEY. Thank you—thank you for the straight answer. 

Mr. STUMPF. Okay. 

Mr. POSEY. As a followup, did the bonuses associated with those 

goals vary between those branches or did Wells Fargo use a single, 

uniform system? 

Mr. STUMPF. Again, that’s a level of detail I don’t know. I can 

try to get back to you on that. 

Mr. POSEY. Okay. 

Now, so far in the investigation of bad actors, have you found 

any correlation between the likelihood of employees committing 

fraud and the demographic or socioeconomic characteristics of the 

people being served? 

Mr. STUMPF. Yes, first of all, I am—and I don’t know—I’m not 

trying to be careful on words here. I don’t know what ‘‘fraud’’ exactly—I know what’s right and I know what’s wrong, and I don’t 

know what the intent of all these people were. 

But, to answer your question specifically, there was no, that I 

understand, racial or ethnicity difference other than what the communities are, because we try to have— 

Mr. POSEY. All right. Okay. 

Mr. STUMPF. —people in our banks who represent the communities. 

Mr. POSEY. All right. So we’ll take racial and ethnicity off the 

table here. 

As someone who also represents a district heavily populated by 

seniors, I’m worried that Wells Fargo may have intentionally 

preyed upon those they saw as vulnerable. Do you believe seniors 

were purposefully targeted as a result of employees stretching to 

meet their sales goals? 

Mr. STUMPF. In fact, we’ve looked at—because we actually capture date of birth, so we could tell that. And for deposit accounts, 

no, there was no disproportionate—it did not—in fact, it was 

younger people, not seniors, if there was any emphasis at all or 

any— 

Mr. POSEY. Okay. 

Mr. STUMPF. Yes. 

Mr. POSEY. To be clear, I don’t think sales goals are inherently 

evil. Anyone who has owned a business understands the need to 

incentivize employees to succeed and reward their successes. Unfortunately, your company forgot the most important part of any 

business, more important than sky-high stock prices, year-end bonuses, or fat retirements: It’s the people that you serve. 

I’m increasingly concerned that this misguided idea of success 

that puts actual customers in the category of least concern is perpetrated by more than just Wells Fargo, by the way. To the best 

of your knowledge, was this practice of creating fake accounts exclusive to Wells Fargo? 

Mr. STUMPF. Again, I don’t know. And I only know what I know 

about our company. 

But I’d also like to make—if I just, in your few seconds left. The 

investment—the reason people buy Wells Fargo and invest in us is 

37 

our—is a whole lot more. It’s about our broad product model. It’s 

about our— 

Mr. POSEY. Let me ask just one quick— 

Mr. STUMPF. —distribution in the United States, about our— 

Mr. POSEY. —question with my time. Can you tell me any action 

the CFPB has taken that would stop something like this from happening again? 

Chairman HENSARLING. Brief answer from the witness. 

Mr. STUMPF. We’ve worked with the CFPB. We have made an 

agreement with them, and we’re going to continue to work with 

them on this issue. 

Mr. POSEY. But any action that they’ve taken that would stop it 

from happening again? 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Missouri, Mr. 

Cleaver, ranking member of our Housing and Insurance Subcommittee. 

Mr. CLEAVER. Thank you, Mr. Chairman. 

Mr. Stumpf, thank you for being here. I know you’re not—this 

is not one of your better days, but hopefully you understand—I 

have a plane to catch. I may not finish my time. And I dare not 

get on a plane and go back to Kansas City and conduct myself in 

a way that everything is fine and we’ll all join hands and sing 

‘‘Kumbaya’’ and fix the problem. 

One of the reasons that everybody in this place is upset is that 

each of us represents about 840,000 people, and probably every one 

of them is angry, especially those who had problems getting loans 

and people who were ripped off during the crisis from 2008 and 

2009. And so I think many of them think that they had a preview 

of this—Gordon Gekko: Greed is good, greed is right, greed works— 

from the movie, ‘‘Wall Street.’’ And I think that’s one of the problems we have here. 

Now, you’ve already been ‘‘Warren’d’’ before I had my opportunity, so I’m not going to ‘‘Warren’’ you, but I do need to ask you 

a couple of questions, maybe just one. 

There were $2.6 million in overdraft charges that incurred on 

linked accounts and late fees. There were thousands of consumers 

on fire, figuratively, and your bank had tubs of water, but the people there decided to drink it and let the people burn, including the 

people who had gotten fired. 

My question is, how far up the chain have you been able to determine that this scheme, this fraud occurred? 

Mr. STUMPF. We know that 5,300 people broke our trust, were 

not honest. And we know that we are going to do a complete review 

of anybody who would have been part of this. And if they were dishonest and broke our code of ethics and took advantage of our customers, they will be held accountable. And we’ve returned that 

money with interest with an apology. 

Mr. CLEAVER. Yes, I know, but I’m trying to find out how far up 

the chain have you determined, thus far, that the scheme went. 

Mr. STUMPF. Well, first of all, it was—most of our people do it 

right, and this was just the opposite of what we train for, just the 

opposite of what we talked about. So when— 

Mr. CLEAVER. I think— 

38 

Mr. STUMPF. —they say it’s a scheme,—again, it’s 1 percent of 

our people. And I know that’s a lot of people, given the size of our 

company, but—and we’ll do a full review, and we’re going to do a 

review of that. 

Mr. CLEAVER. God bless you, but what I’m trying to find out is 

how far up the chain. 

Mr. STUMPF. We’re not going to let the chain impede. The board’s 

going to do a review of the company and make sure everybody is 

held accountable. 

Mr. CLEAVER. Okay, so—okay. Thank you. I appreciate that. 

Mr. STUMPF. Thank you. 

Mr. CLEAVER. Now, how far up the chain? 

Mr. STUMPF. So far, of the people that we have found, it is 

branch managers, their manager in some cases, and a manager of 

a manager. So that’s the work we’ve done so far. 

Mr. CLEAVER. So the manager of a manager would be what, a 

vice president? 

Mr. STUMPF. Yes, I don’t know exactly the title, but I think it 

was called an area president. 

Mr. CLEAVER. Area? 

Mr. STUMPF. Yes, I think it was area president. 

Mr. CLEAVER. Okay. So have any of those folks been fired? 

Mr. STUMPF. Pardon me? 

Mr. CLEAVER. Have any of them been fired? 

Mr. STUMPF. Yes 

Mr. CLEAVER. All the vice presidents? 

Mr. STUMPF. Well, I don’t know—again, I don’t know if this person was a vice president. I don’t know what the title was. But I 

know it was banker, then branch manager, manager of the branch 

managers—I think they’re called district—and then an area manager. 

Mr. CLEAVER. So, no matter how high it goes, they’re going to be 

fired. 

Mr. STUMPF. They’re going to be held accountable. I can’t say 

what— 

Mr. CLEAVER. Okay. 

Mr. STUMPF. I don’t want to prejudge the— 

Mr. CLEAVER. No, I understand. I understand. So, no matter how 

far it goes up, though, they’re going to be fired. 

Mr. STUMPF. As far as they go up, they’re going to be held accountable, whatever that means. 

Chairman HENSARLING. The time of the gentleman has expired. 

Mr. CLEAVER. That’s why everybody’s beating you up. 

Mr. STUMPF. Pardon me? 

Chairman HENSARLING. The Chair now recognizes the gentleman 

from Pennsylvania, Mr. Fitzpatrick. 

Mr. FITZPATRICK. I thank the chairman. 

Mr. Stumpf, I want to follow up on Mr. Cleaver’s questions. 

First of all, I represent a district outside of Philadelphia, Pennsylvania. And I, like probably most of my colleagues here, have received letters from your customers, from our constituents, from 

former employees of the bank. And they have a lot of questions of 

their own, which we have to help them try to answer. 

39 

First, I want to ask sort of a foundational question. This is a 

question that you’ve been asked many times already today, and 

last week in the Senate, about when you first heard of this situation, this so-called situation with your customer accounts. And 

you’ve given us approximate dates, which we appreciate. 

But, first and foundationally, if you could tell the committee, tell 

the American people, when you first heard about the problem, 

where were you? Who told you? What did they say to you? What 

did you do about it? The first moment. 

Mr. STUMPF. Okay. So I’ll answer your question, and thank you 

for that. 

I’ve always known, as I think most Americans know, that not everybody will do everything right every day. And we have 100,000 

different people in this retail banking business. So we knew and I 

knew that this had to be managed, and it was being managed in 

the business. 

Sometime later in 2013, before the L.A. Times story came out— 

because that did not surprise me, because I had heard that we 

were seeing an acceleration of this activity in a certain marketplace. And I can’t recall if my chief legal counsel told me. I can’t 

remember if it was in a meeting with the business leader at the 

time or compliance. And that’s when I first knew that this was becoming a bigger issue. 

So resources were brought in, to bring corporate resources in, to 

assist the business line. And then we spent—or the business and 

the corporate group, called CORE, spent time working on that 

issue, and we saw the issue come down. 

It was not until 2015—and we should’ve learned earlier. We 

should have—we did— 

Mr. FITZPATRICK. Mr. Stumpf, you’re not answering the question. 

Mr. STUMPF. I’m trying— 

Mr. FITZPATRICK. When you first heard, where were you, who 

told you, and what did you do about it? When you first heard. 

Mr. STUMPF. Again, I don’t remember where I was sitting, what 

I was doing, where I—but I recall hearing it sometime in the summer/fall timeframe of 2013. I can’t—I don’t remember the exact 

minute or the person. 

Mr. FITZPATRICK. Mr. Stumpf, there have been so many people 

who’ve been hurt by what we know right now, not just your customers you’re going to lose— 

Mr. STUMPF. Correct. 

Mr. FITZPATRICK. —many customers. You’ll never get them back. 

There have been lower-level and mid-level employees who’ve been 

injured. You mentioned earlier in your testimony, 268,000 people 

went to work today— 

Mr. STUMPF. Correct. 

Mr. FITZPATRICK. —in Wells Fargo to do the right thing, and, for 

the most part, we all believe that. You also mentioned there were 

some 5,000 employees who lost their positions. 

As employers, we’re responsible, when you bring somebody young 

into an organization, somebody perhaps right out of high school or 

right out of college— 

Mr. STUMPF. Correct. 

40 

Mr. FITZPATRICK. —we have special responsibility to that employee to train them, to make sure that they’re being trained in the 

ways of ethics in banking. How many of those lower-level employees who were part of the 5,500 who lost their jobs? 

Mr. STUMPF. Yes, the vast majority—and I don’t have exact numbers, but I believe about 7 percent or so would’ve been at the teller 

population, and the remainder, the other 93 percent were someplace—and that’s my understanding—were banker, senior banker, 

branch manager, and so forth. 

And, incidentally, we do give 2 weeks of training for all of our 

team members before they go out into the—because you’re right, 

we have a special responsibility to help them understand our culture. They sign a code of ethics, and we— 

Mr. FITZPATRICK. Are they being told in those employee trainings 

about the so-called goals, quotas? 

Mr. STUMPF. They’re told about all the responsibility of their job, 

including—I’ve done townhalls, which I do every quarter. I did one 

in Philadelphia just a couple of months ago. And I’ve been talking 

in every one of those—generally, I talk about doing the right thing, 

putting customers first, ethics. 

Mr. FITZPATRICK. Mr. Stumpf, there have been reports from multiple whistleblowers from the bank that they provided information 

up the chain of command and were ignored. As a matter of fact, 

some of them were fired. Are you familiar with those cases? 

Mr. STUMPF. I have heard about those. Those are regrettable. We 

have a nonretaliation policy on whistleblowers. 

Mr. FITZPATRICK. Being fired in the Federal Government for 

being a whistleblower is a very serious matter. Hopefully, you’re 

taking it as seriously as anybody else would? 

Mr. STUMPF. We’re taking that very seriously. We have a nonretaliation policy. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentlelady from Wisconsin, Ms. 

Moore, ranking member of our Monetary Policy and Trade Subcommittee. 

Ms. MOORE. Thank you so much, Mr. Chairman. 

And I want to welcome our witness here today. I’ve learned so 

much here. And I know when you go to the Wells Fargo website, 

there your picture is, John G. Stumpf, the vision and values of 

Wells Fargo. And it features you. 

You said that you started in Wells Fargo in 1981? 

Mr. STUMPF. 1982. 

Ms. MOORE. In 1982. Okay. My math is not that good. And you 

succeeded Mr. Kovacevich. And they had already started a—so you 

were trained, and you knew what the culture of this Norwest company—I guess there was a merger of Wells Fargo and Norwest. 

And so did you receive training or do you know if the employees 

received training on this Going for Great program that we’ve talked 

about here today, where most of your customers only had five accounts in your bank and that there was an effort to get at least 

eight, sort of, accounts for the customers? Was that part of the culture? 

Mr. STUMPF. Yes, thank you for the question. 

41 

As I mentioned before, that was an aspirational goal. Most of our 

customers have—most households have 14— 

Ms. MOORE. All right. Okay. Because I don’t have much time. 

Mr. STUMPF. Okay. 

Ms. MOORE. And so, as your predecessor noted, there is just 

abundant growth potential in the Wells Fargo customer base and 

that one of the sayings around that place was, ‘‘Hey, we inspect 

what we expect.’’ Were there constant monitorings to see if people 

were meeting these goals? That was—it said, ‘‘We inspect what we 

expect.’’ What does that statement mean? 

Mr. STUMPF. Yes, that statement means that we expect our people to live according to our vision and our values, our ethics, and 

our culture. And if they don’t— 

Ms. MOORE. Well, good. I am so happy. I’m going to congratulate 

you on draining the swamp of these 5,300 low-level employees because they almost brought down one of the greatest companies that 

our country has ever known. I remember Wells Fargo in the old 

wagon train days. So I’m happy that you got rid of those employees. And I am sorry for your loss of your $41 million, and I’m sorry 

for the loss of the investors whose stock dropped. 

But I am wondering what the relief is for one of my constituents. 

I have her letter, and I ask unanimous consent to enter it into the 

record. She worked at Wells Fargo— 

Mr. FITZPATRICK [presiding]. Without objection, it is so ordered. 

Ms. MOORE. Okay. Thank you. She started making $13 an hour, and she ended making $15 an 

hour. And she was one of those whistleblowers who complained to 

the manager, and then they changed her performance numbers and 

pushed her out. And so she’s a person who kind of lost her job and 

other stuff that happens to you when you make $13 an hour—$15 

an hour, I’m sorry, and you’re pushed out by people because you 

don’t want to—because you don’t fit in with the expectations and 

the culture. 

What is the remedy? Is there a fund for these employees, the 

good ones, not these 5,300, what was it, $12-an-hour, $13-an-hour 

employees? What is the remedy for my constituent at Wells Fargo? 

I know— 

Mr. STUMPF. We want to know about everyone, and we’re going 

to review their files for anyone who had anything to do—if they 

were— 

Ms. MOORE. It says she has a case with the Wisconsin Equal 

Rights Division. How come she couldn’t just come to you and tell 

you— 

Mr. STUMPF. And we have people that she can talk to. 

Ms. MOORE. No. The people she talked to fired her. 

Mr. STUMPF. We have corporate resources here. If you could give 

me that name, Congresswoman, I’ll let our people know— 

Ms. MOORE. Okay. I want to ask a question. I have 49 seconds. 

I was very disturbed to hear about—you said that the numbers 

were just not large enough to rise to the level of being material for 

security law purposes. I guess I don’t really understand that. 

Would you, as an investor, invest in, sort of, the Bernie Madofftype enterprise, it just seems like it was, these huge dividends? 

Would you make this kind of investment yourself? 

42 

Mr. STUMPF. This is not any—this is a quality company that 

made some mistakes, but our investment thesis is all about our 

capital, our growth, our— 

Ms. MOORE. I have 9 seconds left, and I just want to ask this one 

question. 

You have stated previously that you think the Dodd-Frank Act 

overregulates. Do you still believe that? 

Mr. STUMPF. I have never said that. 

Ms. MOORE. Oh, really? 

Mr. STUMPF. I don’t recall saying that 

Chairman HENSARLING. The time of the gentlelady has expired. 

Ms. MOORE. Thank you so much, Mr. Chairman. 

Chairman HENSARLING. The Chair now recognizes the gentleman 

from Indiana, Mr. Stutzman. 

Mr. STUTZMAN. Thank you, Mr. Chairman. 

And, Mr. Stumpf, I got my first loan from Norwest bank for a 

motorcycle when I was 20 years old, and I’ve been a happy customer of Wells Fargo for over 20 years. 

Mr. STUMPF. Thank you. 

Mr. STUTZMAN. And I have been frustrated with Wells Fargo as 

of late because of the new website. And I’ve voiced that. And I 

think part of this—I think you need to do something about it, because the transparency in the website right now, I can’t find some 

of my accounts. 

And I think that there needs to be, at this point, a time where 

you can give customers confidence, through the website, to make 

sure that every account can be seen. Because I got notices all of 

a sudden of accounts that I didn’t recognize because I didn’t see 

them on a daily basis. I found them after I called Wells Fargo and 

talked to them. 

But what my question is to you—you know, and I—your story is 

remarkable. You came from a dairy farm, I believe, in Minnesota. 

Mr. STUMPF. Correct. 

Mr. STUTZMAN. And if you’d have taken a different choice—I 

grew up on a dairy farm, still part of our family farming operation. 

I’m curious to know what you would do today if you’d have taken 

a different path, a dairy farmer in Minnesota, and you have been 

trying to buy land and you were trying to buy some more cows. 

And you realize that your credit score, something is wrong with it, 

and you have not been able to get your credit score. But all of a 

sudden you find out that maybe your credit score was dinged because your bank was opening accounts. 

When accounts are opened, it dings your credit score, correct? 

Mr. STUMPF. That is correct. 

Mr. STUTZMAN. That’s right. So 2 million people potentially had 

their credit score dinged because someone else was opening accounts in their name. Is that correct? 

Mr. STUMPF. That is not correct. There were about 565,000 consumer credit cards, which we already now have contacted 20,000 

of those, and less than 25 percent saying—and I don’t want to minimize the numbers. These are still big numbers. Even one is too 

many. But we’re going to go back, and my instruction is make it 

right for every one of those customers. 

43 

Mr. STUTZMAN. Here’s what I was surprised to just watch a little 

bit ago. When Mr. Cleaver was asking you what was the highestlevel officer at Wells Fargo to be fired and you didn’t really know. 

You kind of said area manager— 

Mr. STUMPF. I know that—excuse me. I know the title, I know 

the functional title. I don’t know if that person is a vice president, 

a senior vice president. I just don’t know that. I do know that it’s 

a branch manager’s manager’s manager. And we’re also not done 

with our investigation. 

Mr. STUTZMAN. I understand. But this broke for the public within 

the past month. You apparently knew about it, what, in 2012? In 

2013? 

Mr. STUMPF. We knew that not everyone does it right. It was 

sometime in 2015 we did our PwC study, and those results came 

in early in 2016. 

Mr. STUTZMAN. But you’re the CEO. When 939 employees are 

fired for improper sales in 2011, in 2012 another 1,000, all you 

have to do is stand up in front of your company—and I know it’s 

a large company—and say, ‘‘This is going to stop,’’ and it should 

have—it should be stopping. 

I’m curious to hear from employees who were fired what their experience was, and I hope we do a hearing with some of those. 

But let me ask you this. Wells Fargo is a huge company. Is it 

too big to manage? 

Mr. STUMPF. No, it is not. This was a focus problem. And we do 

a lot of areas really, really well, like model risk and market risk 

and capital liquidity. We know we have work to do in operational 

and compliance risk. We should have invested more. 

Today I’ve told our folks, no stone unturned, no dollar unspent, 

get this right. And we’re getting rid of sales goals. 

Mr. STUTZMAN. I know you said that today, but where was the 

outrage from you a couple of years ago when you first heard about 

it? 

Mr. STUMPF. We were— 

Mr. STUTZMAN. There’s outrage on this committee, and rightly so. 

I’m outraged about it. But I don’t sense the same outrage from you, 

when you have—when we’re seeing your—the lady here, her name 

is Ms. Tolstedt, I believe, she’s walking away with millions of dollars. The American people and your customers are going to be very 

upset when they see exactly what happens here. 

Final question. And I hope that you will—I didn’t hear the question from this committee, but will you get the number to this committee of CFPB regulators who were embedded at Wells Fargo 

bank? 

Mr. STUMPF. I can talk to our team, and we’ll be as cooperative 

as we can. I don’t know whether that’s covered under confidential 

supervisory information, but I’ll be as helpful as I can be on that 

issue. 

Mr. STUTZMAN. Please do that. I think that, not only have you 

and Wells Fargo let customers down, but so has the CFPB, and 

people across this country are mad at both. 

Mr. STUMPF. Thank you. 

Mr. STUTZMAN. Thank you, Mr. Chairman. I yield back. 

Chairman HENSARLING. The time of the gentleman has expired. 

44 

The Chair now recognizes the gentleman from Minnesota, Mr. 

Ellison. 

Mr. ELLISON. Mr. Chairman, I ask for unanimous consent to 

enter into the record a report entitled, ‘‘Banking on the Hard Sell: 

Low Wages and Aggressive Sales Metrics Put Bank Workers and 

Customers at Risk.’’ 

Chairman HENSARLING. Without objection, it is so ordered. 

Mr. ELLISON. I would also like to enter into the record an op-ed 

I wrote in The Daily Beast just the other day entitled, ‘‘John 

Stumpf’s Wells Fargo Racket Shows Why Bank Workers Need a 

Union.’’ 

Chairman HENSARLING. Without objection, it is so ordered. 

Mr. ELLISON. And I would also just like to note for my colleagues, the Progressive Caucus held a June 10th briefing, listening to the workers that we’ve been talking about today. We’d be 

happy to do another one. But on June 10th, we had workers come 

in and testify to the very thing that we’ve been talking about 

today, which is these high-pressure sales techniques. 

Mr. Stumpf, if you’re a worker at Wells Fargo, you are expected 

to seek out and reach sales goals. You mentioned that, right? 

Mr. STUMPF. We had sales goals and— 

Mr. ELLISON. That’s a yes or no, sir. 

Mr. STUMPF. Yes— 

Mr. ELLISON. Yes or no, sir, because I don’t have a lot of time. 

I’m not trying to be unkind to you, but I’m not going to let you 

waste my time. Okay, so yes or no? 

Mr. STUMPF. Yes, we had sales goals. 

Mr. ELLISON. Okay. Thank you. 

So could you tell me, do you all have something known as 

prospecting calls that were expected for bankers to make? 

Mr. STUMPF. I don’t know that level of detail. 

Mr. ELLISON. Okay, so you don’t know whether there were 

prospecting calls? 

Mr. STUMPF. I don’t know. 

Mr. ELLISON. Would you be surprised—do you deny that there 

were prospecting calls? 

Mr. STUMPF. I do not know that level of detail in our retail bank. 

Mr. ELLISON. Were you aware that each banker was expected to 

make at least 100 prospecting calls a day? Are you aware of that? 

Mr. STUMPF. That—I’d had—that’s the first time I’ve ever heard 

that. 

Mr. ELLISON. Mr. CEO/Chairman, are you aware that there were 

weekly meetings held by—no, morning huddles to talk about these 

sales goals? Are you aware of that? 

Mr. STUMPF. I realize—I know that some— 

Mr. ELLISON. You’ve got to answer yes or no, sir. 

Mr. STUMPF. But it’s yes with an explanation. 

Mr. ELLISON. Well, okay. So morning huddles or not, yes or no, 

did they occur? 

Mr. STUMPF. Yes, with an explanation. 

Mr. ELLISON. All right. At these morning huddles, were there 

questions asked of workers, how are they going to sell more credit 

cards, and were they given goals for specifically selling a number 

of credit cards? 

45 

Mr. STUMPF. I don’t know that everyone holds—I have to give 

you an explanation, sir. 

Mr. ELLISON. Home equity loans, were they given goals in— 

Mr. STUMPF. I don’t know that. I don’t know that every branch 

held a morning huddle. I know our team works together. 

Mr. ELLISON. Was there publishing of charts on who sold how 

many products in your bank? 

Mr. STUMPF. That’s a level I do not know that detail. 

Mr. ELLISON. Was there publishing of charts on who did not 

make their sales goals? 

Mr. STUMPF. Again, I don’t have that level of detail. 

Mr. ELLISON. Workers say that there were. 

Mr. STUMPF. Okay. 

Mr. ELLISON. Now, if a worker did not reach their sales goals, 

were they put on initial written warnings? 

Mr. STUMPF. I don’t know the process— 

Mr. ELLISON. If they did not— 

Mr. STUMPF. And we got rid of sales goals now. 

Mr. ELLISON. Excuse me. If they did not—if workers did not meet 

second sales goals again, were they given second warnings? 

Mr. STUMPF. I don’t know that level of detail. 

Mr. ELLISON. Okay. If they were not given second warnings, were 

they written up, given written admonishments for not making sales 

goals? 

Mr. STUMPF. Congressman, you’re asking a question I can’t answer. 

Mr. ELLISON. Okay. So, yes, you’re the CEO and you don’t know 

this. 

And were they given performance improvement plans if they did 

not make sales goals? 

Mr. STUMPF. Congressman, I don’t know that level of detail. 

Mr. ELLISON. All right. 

And how do you generate these lists for workers to have to make 

calls? How were the lists generated? 

Mr. STUMPF. Congressman, I don’t know if there were lists. I just 

don’t know that level of detail. 

Mr. ELLISON. Okay. So you’re the CEO, and you don’t know if 

there were sales—if there were prospecting lists that each worker 

was made to make cold calls on. 

Mr. STUMPF. I don’t know that level of detail, Congressman. 

Mr. ELLISON. Okay. 

And if sales weren’t important, why were workers given credit 

card and home equity loan goals to meet? 

Mr. STUMPF. Yes, I don’t know what their goals were. We want 

to deepen— 

Mr. ELLISON. Why did you— 

Mr. STUMPF. —relationships. 

Mr. ELLISON. Why were workers encouraged to open numerous 

accounts for customers? 

Mr. STUMPF. Our team members are encouraged to sit down with 

a customer, talk about their financial dreams, and help provide the 

right products and services. 

Mr. ELLISON. So if a worker got a person to open up an account, 

isn’t it true that account—let’s say a debit account—that there has 

46 

to be a certain minimum balance in that account and there is a fee 

to hold that account if there’s not the minimum balance met? Am 

I right about that? 

Mr. STUMPF. I don’t believe you are right about that, Congressman. 

Mr. ELLISON. If there’s an account— 

Mr. STUMPF. I don’t believe that’s correct. 

Mr. ELLISON. If there’s an account, does there have to be a certain number of uses of that debit account per month? 

Mr. STUMPF. I believe that’s one way to avoid—to not have a fee. 

Mr. ELLISON. And if it’s not met, is there a fee associated with 

that? 

Mr. STUMPF. I believe there’s a minimum balance— 

Mr. ELLISON. What is that fee? What is the minimum balance 

fee? 

Mr. STUMPF. I don’t know what those numbers are. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from South Carolina, 

Mr. Mulvaney. 

Mr. MULVANEY. Thank you, Mr. Chairman. 

I can’t tell you how disappointed I am to even have to be here 

today. As one of the many members of this committee who spends 

every single day in here defending the banking system, defending 

capitalism, and defending free markets, to have to sit here and 

watch you essentially validate everything that the other side has 

said about you and your business and your industry, I don’t know, 

for the last three or four generations is extraordinarily disappointing to me. The damage that you have done to the market, 

to your industry, far exceed the damage that you’ve done to your 

own business. But, again, there’s nothing I can do about that. 

I want to ask you, I think, just one question. I know a little bit 

about business, not nearly as much as you do. What little I do 

know I didn’t learn from college or business school, I learned from 

my dad, who was actually raised very similar to you. He was from 

Minnesota, born to a lower-middle-class family, went to Winona 

University. 

He was a little bit older than you, but not much. And I remember him telling me one time when I was first getting into business, 

he said, you know what, you can learn a lot about an enterprise, 

about an organization by looking at the leader, and that the organization will take on the personality of the leader or the owner or the 

person in charge. 

And if you walk into somebody’s—you walk into a lobby and 

you’re received nicely by the young man who’s sitting there answering phones, it’s probably a really good indication that the lady who 

owns the place is a really good person. Conversely, if you walk in 

and you get treated like crap and with disdain, it probably says a 

lot about the people at the top of the chain. 

I happen to think that the folks who work with me in my office 

reflect that. You come into my office, you get treated well, because 

that’s important to me. The place that you ran, Mr. Stumpf—and 

I don’t know that much about Wells. I knew a little bit about 

Wachovia and Wells—First Union because of where I grew up. You 

all were rotten. 

47 

We’ve heard some stories today that everybody’s heard about. I’m 

sitting here looking at the story from 2009 about the lawsuit that 

got filed. It says: Wells Fargo, Ms. Jacobson said in an interview— 

this is The New York Times—saw the Black community as fertile 

ground for subprime mortgages, as working-class Blacks were hungry to be part of the Nation’s home-owning mania. Loan officers, 

she said in an affidavit, stated that employees referred to Blacks 

as ‘‘mud people’’ and to subprime lending as ‘‘ghetto loans’’—I can’t 

tell you how hard it is for me to even say that—that you all targeted Black churches. I’m not going to defend that. That doesn’t 

even deserve a defense. 

I’m going to ask you one question. Does this organization reflect 

you? 

Mr. STUMPF. Well, I— 

Mr. MULVANEY. You’re in charge. 

Mr. STUMPF. I am deeply sorry, and I’ve read that article you 

just said, and that has no place in our culture, no place in what 

we’ve done. And we are today the largest lender to low- and moderate-income people on housing. We make more loans to AfricanAmericans, Latinos, persons of color, and we’re proud of that. 

And that place—and that kind of language and that kind of behavior is not who I am. I’ve learned my life lessons, also, from my 

parents. My dad is 94, and he’s still a wonderful guy and is still 

a big influence on our life, and so is my mother. And I try to lead 

with courage and conviction. 

Our company is based on those values of ethics, of doing what’s 

right. And the company, of course we’ve made mistakes. Not everybody lives up to our vision and values. But the vision and values 

our 268,000 people aspire to and do every day is consistent with 

what I want to live my life and what our culture is of our company. 

Mr. MULVANEY. Thank you, Mr. Stumpf. I appreciate that. 

For the minute I have left, I want to say something to my Democrat colleague, who I know will see this and, believe me, if the roles 

were reversed, I might see this as an opportunity to try to push 

a political initiative, a political agenda, to bang the drums for more 

heavy regulation. Everything that we’re talking about here today, 

including what I just read, which I won’t read again, happened 

since the CFPB and Dodd-Frank. It happened after we supposedly 

fixed all of this with regulation. 

And maybe, I would suggest this, you can’t fully regulate bad actors. I’m not here in a position to say if Mr. Stumpf is a bad person 

or not. That’s not up to me. I’m trying not to be in the position of 

judging other people. That’s for his board. I know how I would vote 

if I were on the board. In fact, he wouldn’t even be here if I were 

on the board of that company. But you’re never going to be able 

to fully regulate bad actors. And I hope we look at this with a certain level-headedness as we move forward. 

Thank you. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Colorado, Mr. 

Perlmutter. 

Mr. PERLMUTTER. First, Mr. Chairman, I ask unanimous consent 

to introduce into the record the community banking reports from 

May 24, 2016, from Wells Fargo— 

48 

Chairman HENSARLING. Without objection, it is so ordered. 

Mr. PERLMUTTER. —and the report from May 20, 2014. 

Chairman HENSARLING. Without objection, it is so ordered. 

Mr. PERLMUTTER. Mr. Stumpf, about 8 years ago, you were before this committee, and I was so proud of you and proud of Wells 

Fargo and the fact that I thought you guys operated as a bank and 

really looked after me, a customer, somebody who has been with 

the bank. Look at these young guys—I’ve been with one of the 

predecessor banks for 40 years. 

Mr. STUMPF. Thank you. 

Mr. PERLMUTTER. And I represented some of the predecessors— 

First Interstate, Security Pacific, United. 

The culture is what I want to talk about, because that really is 

you, and it is your board of directors. 

Mr. STUMPF. Right. 

Mr. PERLMUTTER. And I’ve heard terms today that I don’t really 

align with the banking business, if you will. I look at banks as 

something different. We came in with $800 billion to save the 

banking system when it was collapsing because it’s something different. 

But I hear you use words today—and this is where I think the 

root of this problem is—‘‘sales organization,’’ ‘‘retail sales,’’ ‘‘stores.’’ 

I’ve never, ever in my life referred to my branch bank in 

Applewood, Colorado, as a store. You don’t sell Veg-O-Matics. You 

don’t sell grapefruit. You take people’s money, you safeguard it, 

and you lend it out to people who may need it for interest, maybe 

me. 

And to get into—this is where Mr. Green was going with the 

products. I don’t know how many products you have. I looked at 

my account. I do like the online banking, by the way, because I can 

look at all my accounts. I turn out, as Mr. Royce says, I have eight 

accounts, personal accounts, with you. How I have eight, the great 

eight— 

Mr. STUMPF. Thank you. 

Mr. PERLMUTTER. —I don’t know, but I do. 

So talk to me about why you’re calling these things ‘‘stores,’’ why 

you use words like ‘‘retail sales’’ and ‘‘cross-selling.’’ You’re a bank. 

Mr. STUMPF. We are a bank, and the idea here is that we want 

to make sure our team members, when you come into a bank or 

any one of our customers do, that we treat them with respect and 

that we provide products and services that help them. When they 

do more with us, we give them a better deal. They get more value. 

It helps them, and it helps us. 

And whether we call them a store or a branch or a location, it’s 

what—it is the hearts and minds of our people who are inside 

there. And— 

Mr. PERLMUTTER. And I’ll accept that. But I still think you’re a 

bank. And we treat— 

Mr. STUMPF. We are a bank. 

Mr. PERLMUTTER. —banks differently than we treat grocery 

stores, because you’re the heart of the financial system. 

Mr. STUMPF. And— 

Mr. PERLMUTTER. But here’s where I want to go. So I go into my 

bank, and there has been some turnover there. They always treat 

49 

me well. They’re always very nice young people. Sometimes they’re 

saying, do you need this, do you need that. I generally am saying 

no. 

When you talk about these goals that are established, why are 

you even setting goals? The goal should be, if your customer needs 

something, try to help them. 

Mr. STUMPF. Correct. We’re getting rid of product sales goals and 

the goal— 

Mr. PERLMUTTER. But why did you have the goals in the first 

place? 

Mr. STUMPF. Well, it was an idea that—for people to make sure 

that they use the right way of sitting down so they have a conversation with a customer. I don’t want to have people in our 

branches or our banks to be apathetic and just not care when people came in. I want them to sit down and have a conversation 

about where that customer is on their financial journey so they can 

meet a need with a product. And when it works well and it deepens 

relationships, everyone wins. 

No one should ever, whatever the goals are, be forcing a product 

or saying why don’t you do this or why didn’t you buy this. That’s 

not the way we train. That’s not the way we incent for. But even 

today, we have taken that off the table, because we’re learning that 

customers grow with us when they’re happy, when they’re satisfied. 

And our satisfaction scores and our loyalty scores have never been 

higher. That’s a better way of doing business. 

Mr. PERLMUTTER. All right. And I—look, I’m just up here as a 

Member of Congress who has worked with banks before, but I’m 

just telling you, you have to stop saying, ‘‘Our stores generate more 

deposits than our competitors.’’ You have Denver up here on your 

chart. That creates the wrong culture. 

Mr. STUMPF. Okay. 

Mr. PERLMUTTER. And I yield back. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from North Carolina, 

Mr. Pittenger. 

Mr. PITTENGER. Thank you, Mr. Chairman. 

Mr. Stumpf, good afternoon. 

Mr. STUMPF. Good afternoon. 

Mr. PITTENGER. Mr. Stumpf, I’m from Charlotte. 

Mr. STUMPF. Okay, great. We love Charlotte. 

Mr. PITTENGER. Well, you have a very major presence in our 

community. I think there are some 23,600 employees who work 

there. 

Mr. STUMPF. Correct. 

Mr. PITTENGER. They are my constituents. I do have deep respect 

and appreciation for the corporate citizenship that you all have 

been in Charlotte. You have been exemplary in terms of what 

you’ve done in our community. You take active roles, your employees do, in many nonprofit organizations. And that leadership is 

commended. And, of course, we cherish the Wells Fargo golf tournament. 

So you have a major presence in our community. And that’s why 

today is such a sad day. I know it is for you. I am sure, as you 

look back on these 35 years and where you are today, you think, 

50 

‘‘what if?’’ What if I’d have done this, what differences could I have 

made? Where was I blindsided, what mistakes? Where did I err? 

And so I think—I’m asking you to look at it as if you were sitting 

in our seat. We represent these people, as was said earlier, some 

750,000 to 800,000-plus people. And you heard a lot of outrage, a 

lot of righteous indignation because we haven’t seen what we’ve all 

expected. 

In the South Park Wells Fargo facility that you have, there is 

written behind the teller station, the counter, a statement by Mr. 

Wells. It came from, I believe, 1864. Do you recall that statement? 

I think it’s very prominent and perhaps it is in other Wells Fargos. 

It seems to be the motto of your bank. 

Mr. STUMPF. Are you asking me a question? 

Mr. PITTENGER. Yes, sir. 

Mr. STUMPF. Yes, I don’t—he’s made a lot of statements, but 

‘‘treat every customer with respect,’’ and I can’t recall— 

Mr. PITTENGER. Well, what we have there at the South Park, it 

says, ‘‘We have one very powerful business rule. It is concentrated 

in one word: courtesy.’’ 

So I think, as you look at all of—there’s a lot embedded in that 

word, ‘‘courtesy,’’ but I think that’s the challenge we have today. 

What could have been done differently? Certainly, the regulators 

were there, yet this was reported by a news agency. 

What would you have done differently today? As you look back 

on the changes and the mistakes that were made, as the CEO, 

what happened in that corporate culture that did not allow that information to come to you in a more timely fashion that would have 

caused you to take even greater direction and leadership? 

Mr. STUMPF. Yes, I think it’s a good question. I’ve probably asked 

myself that a thousand times, a million times. And while I want 

to defend our culture and our people, I recognize that we could’ve 

done more earlier. And I don’t know that there’s any one point, but 

surely we should have realized earlier that product sales goals 

could elicit behavior that’s inconsistent with our culture. Even if it 

happened, like this case, with 1 percent of our team, it’s way too 

much. It’s simply not worth it. And, frankly, it’s not even consistent 

with where we’re going, given the business today. 

So, I don’t know if I can be clearer than that. And there’s a lot 

of people doing a lot of introspection within the company today to 

make sure that we never, ever put a customer or a team member 

at—we want, always, customers to be the foremost of what we do. 

And if ‘‘courtesy’’ is the right word—we think of ‘‘relationship.’’ 

We love long-term, mutually beneficial relationships with our owners, our team members, and, most importantly, our customers 

Mr. PITTENGER. Yes, sir. 

I think those of us who understand free markets—I was on a 

bank board of a small bank, but we understood the customer, we 

understood the importance of the financial industry and what it 

does to facilitate economic growth. And that’s why we’re so challenged today, because we see there has been a strangling of regulations on the financial industry. 

And yet, with that, we’re having to deal with you and with this 

bank and with this problem that’s going to have ripple effects. And 

51 

the messaging is going to be there that there needs to be even more 

oppressive regulations. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Connecticut, Mr. 

Himes. 

Mr. HIMES. Thank you, Mr. Chairman. 

Mr. Stumpf, we focused a lot today on accountability. I want to 

go back to something that, like Congressman Lucas’ concerns, troubles me, which is kind of the focus on culture and the materiality 

of what happened here. 

We’re hearing that there’s not a problem with the culture, and 

you’re hearing an awful lot of disagreement up here. And we’re 

hearing, certainly in the Senate hearing, that this wasn’t material. 

And I guess if you, sort of, exquisitely, finely define materiality 

by the way maybe the FCC defines it, maybe $185 million in fines 

is not material, but this is about much more than a legal definition 

of materiality. And we need to hear you say that you understand 

the magnitude of what has occurred here. 

It’s more than $185 million; it’s about the trust and the faith and 

the belief in the system. It’s not about the ups and downs of one 

company. It’s about people’s faith in the banking system. It’s about 

their faith in the market economy. It’s about whether competition 

is perceived as a good thing by the American public or a bad thing. 

This is really about people’s faith in organizations like yours and 

like the one that you’re testifying in front of today. 

But let me start with the numbers quickly here. What matters 

to an investor, of course, is the value of the company they own. And 

your shareholders have already paid out $185 million, including, by 

the way, the State of Connecticut’s pension fund. 

Mr. Stumpf, do you know what the market cap, the value of your 

company is today? 

Mr. STUMPF. I didn’t look this morning, but I think it’s $220 billion or $230 billion— 

Mr. HIMES. $228 billion. 

Mr. STUMPF. I was— 

Mr. HIMES. On September 7th, when this all started, it was $253 

billion. And there has been no other material impact, so just this 

event has cut $25 billion off of the value of Wells Fargo. That’s a 

big number. 

Do you know what the value of Ford Motor Company is, Mr. 

Stumpf? 

Mr. STUMPF. I do not follow Ford. 

Mr. HIMES. $50 billion. So just since the 7th, you have and your 

organization and the culture have obliterated a full half of a Ford 

Motor Company. That has to be material, doesn’t it? 

Mr. STUMPF. Congressman, I take this as much more than $185 

million in fines. I don’t want to diminish this. I am deeply sorry 

that we didn’t do the right thing. And I understand that re-earning 

the trust of our customers and the American people is going to be 

our biggest challenge. 

Mr. HIMES. I appreciate that. And I do want to get away from 

the numbers, because, again, I’m troubled by this whole culture 

thing. 

52 

Do you think that you can fully measure Wells Fargo’s value 

with the hard assets, the dollars and cents, the number of accounts? 

Let me ask it another way. Are intangible things, like Wells Fargo’s reputation and brand, an important part of the company’s 

value? 

Mr. STUMPF. There’s no question. I think the most important— 

Mr. HIMES. So, yes. The answer is yes. Do you believe that Wells 

Fargo— 

Mr. STUMPF. With an explanation, though, if I may. 

Mr. HIMES. Yes, okay. Go ahead. 

Mr. STUMPF. I think, frankly, what is in the hearts and minds 

of our people and the trust with our customer is by far the most 

important thing, because they make all the rest happen. 

Mr. HIMES. Do you think that Wells Fargo’s reputation has been 

damaged in a material way by this? 

Mr. STUMPF. I think there has been damage, yes. 

Mr. HIMES. Okay. What I worry about is bigger than Wells 

Fargo. It’s the fact that the system comes apart if people don’t have 

faith and trust. 

Mr. Stumpf, can you see what I’m holding up right here? 

Mr. STUMPF. I’m sorry, but I think it’s— 

Mr. HIMES. It’s a $1 bill. It’s the almighty dollar. 

Mr. STUMPF. Yes. 

Mr. HIMES. It’s a piece of paper with some green ink on it. 

Mr. STUMPF. Yes. 

Mr. HIMES. Does this thing have any intrinsic value? Can I eat 

it if I’m hungry? Can I use it to cut wood if I— 

Mr. STUMPF. No. 

Mr. HIMES. Does it have any intrinsic value at all? 

Mr. STUMPF. It represents a promise. 

Mr. HIMES. It’s a promise. 

Mr. STUMPF. Yes. 

Mr. HIMES. So it relies on the faith and the belief in the American people that this has some value. Otherwise, it’s a piece of 

paper with green ink on it. Is that not correct? 

Mr. STUMPF. I totally agree with you, Congressman. 

Mr. HIMES. And can I not expand that point to the banking system? If Americans really started getting anxious about the fact 

that you don’t have enough money in your banks on any given day 

to cover their deposits, we’d have a problem, wouldn’t we? 

Mr. STUMPF. There’s no question about that. 

Mr. HIMES. And the only thing standing between us and this 

meaning being meaningless and between them believing that the 

banking system doesn’t work is trust and faith in the fact that it 

does. 

Mr. STUMPF. Congressman, you are absolutely right. Trust is the 

absolute critical element here, and we have a lot of work to do to 

work on that. 

Mr. HIMES. So your investors are equity investors. They accept 

risk, including the possibility that something like this could happen. If you don’t want this kind of risk, you buy bonds or treasuries 

or whatever it is. 

53 

I would implore you, as somebody who I think understands that 

the market economy is important and that the financial services industry is important, I would implore you to please don’t continue 

to focus on this idea that this is not material. I think we’re now 

agreeing it is material. 

Mr. STUMPF. I’ve never said—oh, go ahead. 

Mr. HIMES. And please work with your colleagues to repair some 

of the damage that has been done to the faith and the trust that 

we both here today have acknowledged is the only underpinning of 

the system that has done so well by you, sir. 

Mr. STUMPF. Thank you for your comments. And I couldn’t agree more. This is bigger than the $185 miilion in fines—in fact, I don’t 

even think in those terms—regaining trust. 

Mr. HIMES. Thank you. 

I yield back, Mr. Chairman 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentlelady from Missouri, Mrs. 

Wagner. 

Mrs. WAGNER. Thank you, Mr. Chairman. 

Mr. Stumpf, you’ve come before this committee today to answer 

for the appalling actions taken by your company, Wells Fargo. I 

have a number of questions, but I want to start by expressing my 

outrage that your company was taking advantage of your customers, our constituents, for years and years and years. I don’t understand how your employees could create millions of unauthorized 

accounts without someone raising a red flag and, if that happened, 

how you failed to act on that knowledge. 

You had a responsibility to your customers, and you failed bigtime. Placing one’s money and wealth in the custody of an organization like Wells Fargo is one of the biggest displays of—what are 

we talking about?—public trust. And you, sir, and your company 

have betrayed that trust and taken advantage of consumers in 

order to meet sales performance goals and fraudulently improve 

earnings and share prices. This is wrong, this is immoral, and this 

may even be criminal. And as you stated, sir, the buck stops with 

you. 

Not only did Wells Fargo and your employees fail these customers, but our regulators failed as well. They neither identified 

nor prevented this malpractice from occurring in the first place. It 

wasn’t the OCC or the CFPB that first uncovered these deceptive 

sales practices that were taking place, but it was, in fact, the L.A. 

Times, the media, that first brought your company’s shameful practices to light. 

And while it is the regulators’ job to prosecute the banking institutions that break the law, it is our job, as Members of Congress, 

to prosecute the regulators who were, in fact, asleep at the wheel. 

From what we know—and there is a lot that we don’t know, sir— 

this widespread abuse was occurring as long ago as 2011, some 

have said maybe back as far as 2007, with 1,000 employees being 

terminated every year for creating fraudulent accounts. Yet this behavior persisted for years without management intervening. 

And even when regulators began to investigate, Wells Fargo did 

nothing to notify customers and shareholders. Your company 

abused its customers. While you have apologized, that apology carVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
54 

ries no weight with me, sir. You still have a lot to explain to this 

committee and, frankly, to my constituents. 

Mr. Stumpf, how many of your customers have been impacted by 

your fraudulent activities? 

Mr. STUMPF. Well, I don’t know—I know what the PwC numbers 

showed. It was— 

Mrs. WAGNER. What is that number? 

Mr. STUMPF. It’s—there were 2 million accounts that they could 

not rule out, and now we’re going back and contacting those customers. Within our credit card business, as I mentioned, we’ve already talked to 20,000 of them and— 

Mrs. WAGNER. How many in Missouri, Mr. Stumpf? 

Mr. STUMPF. I can get you that. 

Mrs. WAGNER. As quickly as you can, please. How many customers have been abused in my home State of Missouri? 

Mr. STUMPF. There were 1,191 accounts. 

Mrs. WAGNER. What portion of these customers were defrauded 

after you became aware of the fraudulent activities? 

Mr. STUMPF. I don’t know what—I don’t have a timeline on that. 

I just know it was broken out by credit card versus— 

Mrs. WAGNER. So 2 million customers, you’re going back, you’re 

going to find out if there were more, and you don’t have a timeline? 

You have a timeline for the employees that you fired year after 

year after year, but you have no timeline of the number of fraudulent accounts by year? 

Mr. STUMPF. I don’t—I can work on that and get that to you. I 

don’t happen to have it in my book right now here for you. 

Mrs. WAGNER. You keep saying, sir, that you’re going to make it 

right. 

Mr. STUMPF. Correct 

Mrs. WAGNER. Those are your words. You’re going to make it 

right. I’d like to know when. When will these customers be made 

whole, Mr. Stumpf? When will we know and when will they know 

whether their credit scores have been affected? When? 

Mr. STUMPF. Yes. Well, we’re starting to work on that right now, 

and we’ve already talked to 20,000 of our customers, and we’re 

hearing that 75 percent—or, less than 25 percent either didn’t 

want the card or didn’t know they had the card. And then we’re 

going to— 

Mrs. WAGNER. 20,000 out of 2-million-plus customers? You’re just 

getting started now? 

Mr. STUMPF. No. The— 

Mrs. WAGNER. It took 5 years, sir, just to identify and begin rectifying the problem, and Wells Fargo only just announced their 

sales incentives will eliminate in October. 

Mr. STUMPF. Ma’am, it just— 

Mrs. WAGNER. When will customers—will they have to wait 5 

years, sir, or longer in order to get relief? 

Mr. STUMPF. The 20,000 we’ve talked so far is out of the 565,000 

consumer credit cards. Other ones did not have, from my understanding, a bureau involved. But we’re going to talk to all of our 

customers. We’re going to contact them all. 

Chairman HENSARLING. The time of the gentlelady has expired. 

Mrs. WAGNER. Thank you, Mr. Chairman. 

55 

Chairman HENSARLING. The Chair now recognizes the gentleman 

from Delaware, Mr. Carney. 

Mr. CARNEY. Mr. Stumpf, I represent the whole State of Delaware. It’s over 900,000 people, one of the bigger districts here in 

the Congress. We are a banking center, as you may know. We don’t 

have a huge Wells Fargo presence, but could you look in your book, 

please, and find out how many fraudulent accounts were attributed 

to people who live in the State of Delaware— 

Mr. STUMPF. Okay. 

Mr. CARNEY. —so I know what we’re talking about? 

Mr. STUMPF. I can tell you how many accounts that the PwC 

analysis could not rule out. These aren’t, again— 

Mr. CARNEY. And your commitment is to make it right for each 

of these accounts in some way? 

Mr. STUMPF. That’s exactly right. And in Delaware—let me see 

if I have this number right. 

Mr. CARNEY. So while you’re looking at it— 

Mr. STUMPF. Yes, one hundred and—excuse me—4,255 accounts. 

Mr. CARNEY. So my responsibility is to make sure and your commitment is to make sure that each of those accounts will be—you 

will make right by those people. 

Mr. STUMPF. We’re going to contact every deposit account. We’re 

going to talk to every credit card customer that we can make contact with. We’ll try to contact all—in your district, or in your State, 

there looks like there’s 1,793 cards. And, again, I don’t know how 

many of those won’t be wanted versus wanted. And we’re going to 

look for the secondary harm. 

Mr. CARNEY. Thank you very much. 

So part of our responsibility as Members of Congress in this 

hearing is to figure out what went wrong, whether people are being 

held accountable, and, most importantly, what we should be doing 

going forward. 

And the thing that I’m struggling with is how long this went on 

before you were able to stop it. You’ve heard that question on and 

on again. 

Mr. STUMPF. Correct. 

Mr. CARNEY. And it does for me, as Mr. Stutzman asked from the 

other side of the aisle—and, by the way, I agree with Mr. Capuano. 

There are very few issues in the 6 years that I’ve been there where 

both sides of the aisle are on the same page. When Mr. Meeks and 

Mr. Capuano and Mr. Posey and Mr. Duffy are outraged on the 

same subject, you know that something really is going on here. 

So what about that question about whether this is an institution 

that’s too big to manage? 

Mr. STUMPF. Again, as I mentioned to another— 

Mr. CARNEY. Mr. Stutzman asked the question. 

Mr. STUMPF. Yes. And I think this is a focused problem. We can 

get our arms around this, and we will. We have— 

Mr. CARNEY. So how can you manage such a large organization 

with 260-whatever thousand employees, and not be able to answer 

the questions that Mr. Ellison posed to you about things that were 

happening on the frontlines? How do you control that activity, 

which was, really, what was going on here? 

56 

Mr. STUMPF. Again, we have leaders in those businesses that 

could answer those questions. I don’t have that level of detail. I can 

surely get that. 

Mr. CARNEY. I would appreciate it if you would. One of the 

things that I’ve worked on here—and I’m not going to be here after 

this next election—since coming is on mortgage finance reform. 

And entered into the record by Mr. Meeks was a list of Wells Fargo 

settlements by State and Federal regulators, and there’s a whole 

list of these $5 billion-plus related to mortgage fraud, if you will. 

Could you explain to me how your chain of control got out of 

hand with respect to these violations? 

Mr. STUMPF. Let me—regarding the mortgage— 

Mr. CARNEY. Much more impactful on the economy, frankly, than 

these fraudulent accounts, although the fraudulent accounts are 

really important. 

Mr. STUMPF. I don’t want to minimize any of our mortgage settlements, but we are, by far, the largest mortgage originator. In fact— 

Mr. CARNEY. Which is why I asked the question, right? If you 

have the level of fraud that was going on with Fannie Mae and 

Freddie Mac. 

Mr. STUMPF. We’ve made settlements with a number of agencies, 

as other companies in our industry have. Our settlements have 

been—we’ve had far fewer issues, even though we’re the largest 

mortgage originator—and I’d like to make this point— 

Mr. CARNEY. The settlements were over warranties and representations made to Fannie and Freddie, which basically indicated 

the mortgages were what you said they were, correct? 

Mr. STUMPF. I believe what you are referring to is an FHA issue 

that we settled in the last 6 months about— 

Mr. CARNEY. That was $1.2 billion. The Fannie and Freddie settlements were $869 million to Freddie and $591 million to Fannie 

Mae. And essentially, as I understand these settlements, they’re 

over information that was misrepresented to the GSEs. 

Mr. STUMPF. I don’t have that level of detail right now, but I 

know this: Since 2009, we’ve made 11 million mortgages in America to help people get lower rates or buy homes, and that has been 

very important to our customers. 

Mr. CARNEY. With an institution that large and that difficult to 

manage, how do you make sure that these kinds of things don’t 

happen on the mortgage side as well? 

Mr. STUMPF. We have a terrific team on the mortgage side. We’ve 

done a lot of work to improve there, and we have great leaders in 

those businesses, and we’re trying every day to get better. 

Mr. CARNEY. Well, I’d like to have some additional information 

if you could provide it—my time has run out—on the basis of these 

settlements. 

Mr. STUMPF. I will do whatever I can with our team to get back 

to you. Thank you. 

Mr. CARNEY. Thank you. 

Mr. NEUGEBAUER. [presiding]. The time of the gentleman has expired. 

The gentlemen from Kentucky, Mr. Barr, is recognized for 5 minutes. 

Mr. BARR. Thank you. 

57 

I share in my colleagues’ outrage over the unethical and illegal 

sales practices at Wells Fargo, which opened up over 1.5 million 

fake bank credit card and Web services accounts in the names of 

real customers, costing those consumers millions of dollars in 

fraudulent overdraft and inactivity fees, and potentially hurting 

their credit scores, through no fault of their own. 

And while Wells Fargo does not have a major retail presence in 

Kentucky, it’s likely, it’s very likely that many of my constituents 

in the 6th Congressional District in Central Kentucky were defrauded through Wells Fargo’s credit card programs. And if you 

could reference your materials again, and identify the number of 

my constituents who may have been impacted. 

Mr. STUMPF. Okay. Let me get that. And while I’m getting that, 

I’d like to make it clear that of the 1.5 million deposit accounts, 

very few, if any, had any credit impact. We didn’t report that to 

the credit bureau. So we’re really talking about credit cards here. 

Mr. BARR. Potentially the accounts in Kentucky. 

Mr. STUMPF. There were 629 accounts that could not be ruled 

out. We didn’t know— 

Mr. BARR. For those 600 of my potential constituents, you’ve testified today that what happened at your institution over the last 

several years was not consistent with your culture and ethics. 

Mr. STUMPF. Correct. 

Mr. BARR. But I have to think about those 600 Kentuckians. 

Mr. STUMPF. No question. 

Mr. BARR. And my constituents, who may have had an account 

opened without their knowledge, without their consent, middle-income, hardworking Kentuckians. And that may have resulted in 

overdraft fees, inactivity fees, and it could very well have damaged 

their credit score, and, again, through no fault of theirs. So you’ve 

said that you want to make this right, but I would say that my constituents, who have been damaged by your conduct, would say that 

culture that allowed that to happen, that’s a rotten culture. 

So, let’s not lose focus on these victims. Let’s not lose focus on 

those defrauded Wells Fargo customers. And you said your bank 

will make this right for your customers, and this committee’s job 

is to hold you accountable to make this right. So will you commit 

to me—and we all have caseworkers and it won’t surprise me at 

all if we get a call from a customer who has been wronged. 

Will you commit to me, and your government relations team commit to me, on the record, that you will work with us and our constituents to make this fully right for them? 

Mr. STUMPF. Yes. So let me just—the answer is yes with an explanation. We are committed to making it right for every single one 

of our customers. In fact, we are working with—we’re going to have 

a consultant that the CFPB has to approve. We’re going to have 

mediation. We’re going to go back—and I’m interested in results. 

I’m not interested in—I’ll have our team work with your team. 

Mr. BARR. I appreciate that, because clearly, there was a lot that 

went on wrong with your bank. No one did enough. No one did 

enough fast enough to fix it. 

Secondly, I want to tell you who I also think about in addition 

to those constituents who have been harmed. I think about the 

community banks and credit unions in my district. And I’ve talked 

58 

to many people who worked for small institutions in rural Kentucky who are your competitors. And the fact that this scandal has 

painted a bad picture for the entire banking sector. And frankly, 

the institutions in my district that are those community banks and 

credit unions, they don’t have your culture, but now they have a 

tarnished reputation because they’ve been swept into this with you. 

And we’ve been fighting for regulatory relief for these small community banks, and these credit unions, that, frankly, represent 

competition to big banks like you. And so what I worry about are 

these small community banks and credit unions that are now going 

to have to deal with the ramifications of the bad acts of your institution. 

Can you comment on your colleagues in the banking sector that 

now are going to have to live with the regulatory onslaught that 

is likely going to sweep them into this when they are not at fault? 

And, frankly, they don’t have a culture like yours? 

Mr. STUMPF. Again, I am sorry for what we did. I’m sorry that 

we didn’t move fast enough. Again, the vast majority of our people, 

even in our regional bank, especially in our regional bank, did exactly what was right. They followed our culture. This is about people who did not do the right thing, or at least about behavior that 

was not right, and I accept responsibility for that, and I’m sorry 

about what happened. 

Mr. BARR. And one final question is, you testified today that you 

should have known sooner that product sales goals would have elicited bad behavior. Was it your policy at the time that all of this 

was going on to notify customers when an account was opened? 

Mr. STUMPF. When an account was opened that was not funded, 

we had it automatically, within 60 or 90 days, removed from the 

account file. It was not until 2015 that we finally put it together, 

that there could be a fee doing this. So that’s when we did the fullblown study back to 2011. 

Mr. BARR. I would think that best practices going forward, at 

least, and in the past, should have been to notify a customer when 

you open an account. 

I yield back. 

Mr. STUMPF. In fact, we do that today. Within one hour of an account being opened today, they get a notice that an account has 

been opened. And we won’t even pull a credit bureau unless we 

have a signature. 

Mr. NEUGEBAUER. I now recognize the gentlewoman from Alabama, Ms. Sewell, for 5 minutes. 

Ms. SEWELL. Thank you, Mr. Chairman. 

So it looks as if Wells Fargo has done somewhat of a deep dive 

on the, I guess it’s 1.5 million checking accounts and half a million 

credit cards? 

Mr. STUMPF. Correct. 

Ms. SEWELL. So can you tell me, with any specificity, what demographics was most affected? Was it California? I represent Alabama. 

Mr. STUMPF. Yes. 

Ms. SEWELL. So could you tell me how many folks in the State 

of Alabama were affected by this? 

59 

Mr. STUMPF. I can tell you, it does not—it was more in the West 

and the Southwest, but let me get to my numbers here. 

Ms. SEWELL. And while you’re looking, I also want to know 

whether or not you have identified any commonality between those 

folks who were affected, either geographical, demographics, race, 

ethnicity, etc. 

Mr. STUMPF. It’s a good question. 

Ms. SEWELL. —income level. Have you sort of isolated as to who 

was most affected by the fraudulent actions? 

Mr. STUMPF. That’s a good question. Of the 2 million accounts 

that we could not identify, we couldn’t rule them out, there was 

no—in fact, the deposit side skewed to younger people, not older 

people. And we don’t take—we don’t use race or ethnicity, we don’t 

capture any of that information. Only age is what we capture. But 

I do have a number for— 

Ms. SEWELL. What about income? Obviously, when people are 

opening up credit cards, they have to say what range of income. 

Any of those identifiable commonalities between those? 

Mr. STUMPF. I should have mentioned that. On the deposit side, 

I don’t think we do that. On the credit card side, I don’t have that 

information, but I can surely get back to you on that. 

Ms. SEWELL. I’d like to— 

Mr. STUMPF. Or at least have our team talk to you about that. 

Ms. SEWELL. And you were looking up Alabama to see in the 

State of Alabama how many customers were affected? 

Mr. STUMPF. And Alabama had 22,795 accounts—accounts, not 

necessarily customer accounts—that they could not rule out. I don’t 

know how many of those are going to be— 

Ms. SEWELL. So 22,700? 

Mr. STUMPF. And 95. 

Ms. SEWELL. And 95. And I can assume from all your testimony 

repeatedly here today that the customers in my State will be made 

whole or made right, as you like to say. 

Mr. STUMPF. That is our goal for every customer, and I can— 

Ms. SEWELL. Now, my real question is this: Being made right includes more than just being made whole for the damage that was 

done personally to the customer. The reality is that you’ve violated 

the public trust. It seems to me being made whole also should go 

to all of the bonuses that were received off of fraudulent information over the time period that has been identified. 

Now, how much money have you made over the 5 years of 2009 

to 2015 in just bonuses? I’m not talking about your compensation, 

just bonuses? 

Mr. STUMPF. I don’t recall exactly, but let’s say— 

Ms. SEWELL. Would it surprise you to know that you were paid 

$12 million in bonuses for at least the last 3 years? 

Mr. STUMPF. Let’s say it’s $18 million or $20 million. I don’t recall the exact number. 

Ms. SEWELL. So I guess my frustration is that being made right 

is not just about the personal damage that was done to the customer base. It really is about the public trust, and— 

Mr. STUMPF. It is. 

Ms. SEWELL. —that to me goes to every level of your company 

being unjustly enriched by a fraudulent scheme such as this. And 

60 

I’d like to know what your thoughts are about how Wells Fargo 

plans to make right to the public on such a magnitude? 

Mr. STUMPF. Yes. Thank you for that. First of all, I think it’s important to note that fraudulent or unused accounts hurt customers 

and they hurt us. In fact, the $2.6 million of fees that we found 

for this 4 years cost us $10 million to produce. That’s a losing operation. There was—people invest in our company for a whole lot of 

reasons, and one is about deep relationships of customers who use 

products. So an unwanted product, an unused product is just— 

Ms. SEWELL. With all due respect, sir, I understand that it hurts 

you, but I’m here to tell you that the customer base and the 22,000 

folks in Alabama are much more egregiously hurt than you. 

Mr. STUMPF. There is no question, and I agree with you. 

Ms. SEWELL. And I just want to go back to the comments of my 

colleague, Mr. Ellison, who was really trying to capture the bad 

business practices of your sales force. Now, do you still have that 

line of business? Is that line of business still a part of the portfolio 

of Wells Fargo? 

Mr. STUMPF. We have a great retail banking business. We love 

it. And we’re getting rid of sales goals. In fact, our customer— 

Ms. SEWELL. What else are you doing to make sure that this does 

not happen again? 

Mr. STUMPF. If I can just quickly answer that. For any credit 

card opened or, any deposit account opened, there has to be a signature today. If there’s not a signature of a customer, it can’t get 

opened. We’re also doing mystery shopping, to make sure our people are doing the right thing. 

Ms. SEWELL. What’s to stop a fraudulent signature? 

Mr. STUMPF. Because you have to put in your PIN. Only the customer knows that. 

Chairman HENSARLING. The time of the gentlelady has expired. 

The Chair now recognizes the gentleman from Pennsylvania, Mr. 

Rothfus. 

Mr. ROTHFUS. Thank you, Mr. Chairman. 

Mr. Stumpf, these charges against Wells Fargo violate any legal 

or ethical standard. We know that Wells Fargo employees, over 

years, opened 2 million accounts for customers without authorization. To hit sales targets and draw additional fees, bank employees 

falsified accounts and engaged in egregious deceptive practices. 

This was theft, plain and simple. That the offending Wells Fargo 

employees did what they did, in a systematic way, represents a 

gross violation of trust. 

When I first heard about these activities, my first thought was 

this falls into the, ‘‘You’ve got to be kidding me’’ category. One is 

left asking, how does this happen? 

Over the course of the last 5 years, Wells Fargo was firing 1,000 

lower-level employees each year. We learned in last week’s testimony that it was not until 2014 that various committees on Wells 

Fargo’s board were informed. It’s incredible that this did not rise 

to the attention of the board immediately, and it’s incredible that 

it did not end sooner. 

By any standard, these actions were wrong: 5,000 people, perhaps more, lied, cheated and stole from customers whom they 

61 

thought would trust them. How many people in Pennsylvania were 

affected by this? 

Mr. STUMPF. I’ll take a look at that. As I am doing that, I just 

want to make a couple of comments. Many of these people, over 10 

or 15 percent, were bankers or bank managers. These weren’t all 

lower-level people. They were in the mid-30’s to 60’s. 

Mr. ROTHFUS. How many levels in the organization chart at 

Wells Fargo are there? 

Mr. STUMPF. It depends on the operating business, so there could 

be— 

Mr. ROTHFUS. Are there 10 layers? 

Mr. STUMPF. It could be 8 or 9 or 10 layers. 

Mr. ROTHFUS. Eight or nine or 10. So a third-level employee 

wouldn’t be considered a lower-level employee? 

Mr. STUMPF. The fact that these were— 

Mr. ROTHFUS. How many people in Pennsylvania? 

Mr. STUMPF. In Pennsylvania, 79,918 accounts we could not exclude. Again, that’s about the 2 million. There’s—you know, we’re 

looking at—also understanding, right, on credit card, only 20—only 

25 percent could not remember or did not order— 

Mr. ROTHFUS. How many branches does Wells Fargo have? 

Mr. STUMPF. In our total company? 

Mr. ROTHFUS. Across the country. 

Mr. STUMPF. 6,200. 

Mr. ROTHFUS. How many branches are identified as being involved in this scandal? 

Mr. STUMPF. I don’t have that number. I don’t know if there was 

a team member— 

Mr. ROTHFUS. Is this a coast-to-coast scandal? 

Mr. STUMPF. Well, first of all, it’s exception—it’s behavior that 

we did not want, and I don’t know if it affected every State or 

every region. I just don’t happen to have that information. 

Mr. ROTHFUS. In the last 5 years, how many branches have you 

visited personally? 

Mr. STUMPF. I don’t keep a count of that, but I’m—pick a number, maybe 1,000. 

Mr. ROTHFUS. Do you make it a practice to go behind the 

counter— 

Mr. STUMPF. Absolutely. 

Mr. ROTHFUS. —and work as a teller or as a representative? 

Mr. STUMPF. To work as one? 

Mr. ROTHFUS. Yes. Have you ever seen the show like Undercover 

Boss, where the CEO comes in and does the frontline work? 

Mr. STUMPF. Yes. I’m not trained or allowed to do that, but I 

walk behind the teller line and I meet our people. I talk out in 

front with our bankers. There’s— 

Mr. ROTHFUS. You wouldn’t have waited on a customer and 

maybe stood in the shoes of one of those frontline employees, 

maybe tried the cross-selling practice? 

Mr. STUMPF. I’ve talked with them. And the vast majority of our 

people are excited. Our culture and our—in fact, we have engagement scores. Every year, we do—about 93 or 94 percent of our people participate in the regional bank in a Gallup survey that brings 

into account are you happy in your job? Do you get rewarded? 

62 

Whatever. And our people are 14-to-1, 15-to-1 engaged, some of the 

highest scores in the industry. 

Mr. ROTHFUS. Some of those employees had an issue. How many 

whistleblowers are there, do you know? 

Mr. STUMPF. I do not have that number. 

Mr. ROTHFUS. Do you appreciate the kind of courage that it takes 

to be a whistleblower? 

Mr. STUMPF. Well, absolutely. Our people can call an ethics line, 

and they can do it— 

Mr. ROTHFUS. You have no idea how many whistleblowers there 

are? 

Mr. STUMPF. I don’t have— 

Mr. ROTHFUS. CNN is reporting dozens. Do you think that’s accurate? 

Mr. STUMPF. I don’t know. And we’re going to work on—every 

name that we get, we’re going to work on. 

Mr. ROTHFUS. Do you have any idea of how many of these people 

are no longer employed at Wells Fargo? 

Mr. STUMPF. I don’t have that number for you. 

Mr. ROTHFUS. Any idea how many would have been demoted? 

Mr. STUMPF. I didn’t get— 

Mr. ROTHFUS. Any idea how many may have been demoted, if 

any? 

Mr. STUMPF. I don’t have that number for you, sir. 

Mr. ROTHFUS. I would suggest that, again, given the courage it 

takes for somebody who spots something like this to speak, and the 

historic protections that should be attributable to whistleblowers, 

that this would be a top priority. 

Mr. STUMPF. And we have an anti-retaliation program. 

Mr. ROTHFUS. How many people at Wells Fargo are now working 

on the whistleblower issue? 

Mr. STUMPF. I don’t know that issue. I could have my team work 

with your staff and tell you. 

Mr. ROTHFUS. Do you have any idea how many honest Wells 

Fargo employees may have lost out in a race with some of the 

fraudsters? 

Mr. STUMPF. I don’t have that answer for you. But we’ve got 

268,000 terrific team members. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Illinois, Mr. Foster. 

Mr. FOSTER. Thank you, Mr. Chairman, for holding this hearing 

so we can examine the abusive and fraudulent practices that were 

so pervasive at Wells Fargo. I’d like to start by reiterating what 

many of my colleagues have said, that this corporate malfeasance 

is exactly why we need a strong and independently funded CFPB. 

As Director Cordray testified in the Senate last week, the CFPB 

learned about the fraud at Wells Fargo through its whistleblower 

line. It’s my understanding that he offered to be here today, but it 

appears that his testimony was not needed to understand the role 

that his agency played in bringing the fraud to light. And I suppose 

that we don’t need his testimony because the CFPB has returned 

more than $12 billion to 27 million Americans, and this case adds 

to that record. 

63 

The CFPB did not learn about the fraud because Wells Fargo 

self-reported. In fact, the record suggests that you, Mr. Stumpf, 

were informed about the fraudulent accounts anywhere between 2 

and 4 years before self-reporting by Wells. In the wake of this incredibly egregious institutionalized conduct, you have now come to 

Washington to say you’re sorry. Well, of course, your apology is appropriate, as is foregoing a portion of your compensation, but that 

does not address the core problems in the culture of the institution 

and the governance rules that allowed it to develop. 

As someone who started a manufacturing business and served on 

its board, I understand that corporate culture starts at the top and 

eventually permeates the entire organization; but your response to 

the gross misconduct that drove results that you prided yourself 

and the bank on has been underwhelming, to say the least, because 

it’s clear that the simple motivations of keeping the trust of customers, of shareholders, and the jobs of 5,300 frontline employees 

has not been enough incentive to drive a culture of compliance 

among management. 

So my first question to you, Mr. Stumpf, given this situation, 

which actually should be a case study for corporate mismanagement in every business school and law school in the country, is 

what specific governance rules should have been in place that 

would have prevented these abusive practices? 

Mr. STUMPF. Thank you for your question. I acknowledged before 

that we should have done more earlier. We should have brought 

our corporate resources in earlier, and we should have obviously 

gotten rid of sales goals earlier, because they were misunderstood 

or misrepresented by some of our team members. I think that 

would have been good governance. 

Mr. FOSTER. Okay. I think I’d like to actually focus on specific 

proposals. I think we’ve all been impressed by this list of settlements and penalties that have been imposed on Wells since the financial crisis that has been scrolling on the monitors here. And, 

without objection, I’d like to enter that into the record. 

Chairman HENSARLING. Without objection, it is so ordered. 

Mr. FOSTER. And one specific proposal that has been made is 

that regulators’ penalties for illegal practices should be paid first 

out of the bonus pool for top executives, so that you and every one 

of your top executives would have your bonuses at risk for any malfeasance in any corner of the organization, rather than having the 

regulatory fines being taken largely out of the hides of shareholders. 

So my question to you is, if everyone knew that the regulatory 

fines were to be paid out of the bonus pool, would that have helped 

change the corporate culture that led to these abuses? 

Mr. STUMPF. I can’t speculate on that. I know that in my case, 

the board is independent, and the board actually took my recommendation and passed that. We filed an 8-K on that yesterday. 

And I’m going to do all I can to lead this company going forward. 

Mr. FOSTER. And we all can speculate on what fraction of that 

compensation clawback would have happened without the attention 

in the press and by Congress on this. For example, if you knew 

that the bonus pool would take a hit for any regulatory fines, 

64 

wouldn’t that actually create an incentive not to develop a bank 

which was effectively too big to manage? 

Mr. STUMPF. First of all, I disagree that we’re too big to manage. 

We need to focus more on this issue, on operational issues and on 

compliance issues. But, again, we do many, many areas really well. 

And I’m sorry that we didn’t get everything right along the way. 

And we’ve made settlements, we’ve tried to make it right for customers. 

But recognize also, we do a lot of really good things. We’re a 

great corporate citizen, and 268,000 team members really try to get 

it right every day for all of our customers. 

Mr. FOSTER. As we look for bipartisan solutions to try to prevent 

this sort of thing from happening again, I find that a very interesting suggestion. 

And just a last quick question. Many of the actions that were 

taken here hurt the credit scores of customers, which made it difficult for them to buy mortgages. And are you specifically looking 

to find out if any of your customers have been denied mortgages 

because of action you’ve taken? 

Mr. STUMPF. We’re going to dig into that and make it right. We 

will. 

Mr. FOSTER. Thank you. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from New Hampshire, 

Mr. Guinta. 

Mr. GUINTA. Thank you, Mr. Chairman. 

Thank you, Mr. Stumpf, for being here. I share in the frustration 

and the anger and the displeasure of my colleagues on both sides 

of the aisle relative to this particular issue. And I have listened 

over the course of your testimony, and there are a number of what 

I would consider inconsistencies, either based on what you’ve said 

today, what was in your oral testimony, or what you had stated in 

the Senate hearing last week. 

So I want to clarify a few things. In your oral statement, you 

said that you made a recommendation to the board that it take certain actions regarding your salary and other pay. 

Mr. STUMPF. That is my testimony and that’s accurate. 

Mr. GUINTA. When did you make that recommendation? 

Mr. STUMPF. It was—today is Thursday. It was sometime before 

the independent board met without me. I don’t recall. It might 

have been—it was before or during the board meeting. But I referred—I made comments about that to our lead director that I 

wanted to do that. 

Mr. GUINTA. Are we talking about last week or this month? 

Mr. STUMPF. Last week. 

Mr. GUINTA. Last week. Before or after the 20th? 

Mr. STUMPF. What day is today? 

Mr. GUINTA. The 20th was Tuesday. Today is the 29th. 

Mr. STUMPF. It was sometime after—it was sometime on the 

weekend, I believe, to the best of my recollection. 

Mr. GUINTA. So it was after the Senate hearing? 

Mr. STUMPF. It was after the Senate hearing. 

65 

Mr. GUINTA. So before, you had said to the Senate Banking Committee that you didn’t want to prejudice the compensation committee or the board process. 

Mr. STUMPF. Correct. 

Mr. GUINTA. And since the 20th, you did exactly that. So what 

has changed from the 20th to today, the 29th? 

Mr. STUMPF. I felt that it would not prejudice them. I didn’t want 

to prejudice them, but I thought it was—and they can do more if 

they want to. They have all the rights and responsibilities. 

Mr. GUINTA. No, I understand that. What I don’t understand is 

on the 20th, you said to the Senate you did not want to prejudice 

them, and then 4 days later, the 24th, which is the Saturday over 

the weekend, you did a reverse course. So what happened between 

the 20th and the 24th for you to change your mind on that issue? 

Mr. STUMPF. I decided that this was a good way to show, at least 

a step, a start to show my level of commitment. 

Mr. GUINTA. Why wasn’t that important then before the 20th? 

Mr. STUMPF. I was preparing for other things and it didn’t cross 

my mind at that time. I developed that thinking sometime over the 

weekend. 

Mr. GUINTA. That’s a pretty big compensation hit, right? 

Mr. STUMPF. Again, it’s what I thought was right for me to recommend to the board at that time. And they can do more. They 

have all the independence. And I didn’t believe that—I thought 

that was the right thing for me to do. 

Mr. GUINTA. What about the clawback of Ms. Tolstedt’s pay? 

When did you make that recommendation? 

Mr. STUMPF. That recommendation—she does not report to me. 

That recommendation was made by her boss. 

Mr. GUINTA. When were you aware of that recommendation? 

Mr. STUMPF. I was aware of that sometime— 

Mr. GUINTA. Before the 20th? 

Mr. STUMPF. It was sometime over the weekend also, I believe. 

I don’t recall the exact days. Maybe— 

Mr. GUINTA. Both were after the 20th? 

Mr. STUMPF. Yes. 

Mr. GUINTA. I want to go to a different issue. Do you currently 

have sales goals at Wells Fargo today? 

Mr. STUMPF. They end in our regional bank tomorrow, because— 

and the reason we didn’t take them out before, we have—the vast 

majority of our people do the exact right thing. We don’t want to 

hurt them from a compensation perspective. And we thought we 

could do this, and do it right, and put other goals like customer loyalty and other things that our customers really appreciate by January 1st. We now know that we can do it by October 1. So we don’t 

want to hurt them, and we also want to make sure our customers 

get treated well. 

Mr. GUINTA. Let me move on to the CFPB. You’ve been asked 

several times how many employees of the CFPB were embedded at 

Wells Fargo. And I think what you said is something to the effect 

that you will do your best to work with us, but you didn’t say clearly whether you would actually provide us that number. So I’m curious, would you provide us with that number when you get it? 

66 

Mr. STUMPF. Again, I don’t know that answer. I’ll work with our 

team. The best I can do is promise you that I’ll work—I’ll consult 

my team— 

Mr. GUINTA. I understand you don’t know the number today. I’m 

saying, when you work with your team to identify the number, will 

you then share it with Congress? 

Mr. STUMPF. Again, I don’t know if that’s a—if that’s a confidential supervisory matter or information. 

Mr. GUINTA. CFPB employees are public employees, aren’t they? 

Mr. STUMPF. I don’t want to make a promise to you that I can’t 

keep. So I will promise that I’ll take a look at it. 

Mr. GUINTA. Would you speak with your leadership and try to 

get us something in writing as to whether you can provide us that 

answer? 

Mr. STUMPF. I will work with them as soon as one of these things 

get done. 

Mr. GUINTA. Thank you, sir. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Maryland, Mr. 

Delaney. 

Mr. DELANEY. Thank you, Mr. Chairman. 

Thank you, sir, for being here. A lot of focus has been on your 

cross-sales or your cross-sell culture at the institution. It’s something that the institution has been very proud of. When you acquired Wachovia back in 2008, your former chairman, Dick 

Kovacevich, who I think was probably the architect of your crosssell program, said, we are combining the industry’s number one 

ranked customer service culture of Wachovia—and I was a very 

substantial Wachovia customer in my prior life in business and I 

had nothing but a terrific experience— 

Mr. STUMPF. Thank you. 

Mr. DELANEY. —with the industry’s number one sales and crossselling culture of Wells Fargo. This is 2008. Analyst reports across 

the last decade would talk about the cross-sell culture of Wells 

Fargo. But several analysts also pointed out that there was risk inherent in this and, in fact, that this culture might be undermining 

the customer experience, including a well-known banking analyst 

who said, ‘‘Wells Fargo suggests that a successful bank is one that 

keeps seeking new customers and selling as aggressively as possible more products to them and not getting bogged down in customer service.’’ 

So the question I have is, your board of directors—because when 

you have a very large enterprise like you do, the governance process is incredibly important. Did the board of directors ever discuss, 

at the board level, whether the cross-sell culture had gotten out of 

control at the bank? Because you were clearly outperforming your 

peers, and you were proud of that, and you bragged about it and 

you had a swagger about it. And the law of large numbers just 

leads us all to believe that it is very hard to significantly outperform your peers, particularly when they are very big and they 

are also sophisticated operators like your competitors are. 

Did your board ever talk about this issue? Did they ever actually 

sit around and examine whether this culture had gotten out of conVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00072 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
67 

trol, particularly after 4 or 5 years of having to let go so many people? 

Mr. STUMPF. Congressman, I don’t know all of the things that 

our board talks about, because I’m not in all the meetings, but I 

will say this: Cross-sell is our shorthand for depth of relationship. 

We love that. When customers do more, they get more value, it 

helps everyone. 

Mr. DELANEY. But you also make more money when you crosssell. There are two ways of looking at cross-sell. It’s either really 

good for you or it’s really good for the customer, depending upon 

whether they needed the product or not. I’m really getting at the 

board’s responsibility, because your board is responsible to make 

sure that you’re setting the right tone at the top. 

Mr. STUMPF. Correct. 

Mr. DELANEY. You’re also responsible for that. I’ll come back to 

that in a second. But the board is responsible for actually examining the business practices of the bank. So did your board—you’re 

the chairman of your board. 

Mr. STUMPF. Correct. 

Mr. DELANEY. So you may not be there. They have executive sessions where they may ask you to leave. You’re certainly not there 

when they discuss your compensation. But for most of the meetings, you’re there. You set the agenda. You probably sit in on most 

of the committee meetings. I chaired a public company board for 

many years. 

Did you ever—did the board ever talk about whether the culture 

in the retail banking business, and all of the accolades you were 

receiving for your cross-sell success, and the fact that several analysts had focused on the fact that you were overly aggressive with 

respect to this, did they ever actually ask the question, should we 

look into this? Did they ever exercise their fiduciary responsibilities 

around this issue, in other words, ensuring that your customers 

were getting an appropriate service, which they obviously weren’t? 

Mr. STUMPF. Yes. And yes, the answer is yes. They— 

Mr. DELANEY. So you can get us evidence that the board actually 

has examined this issue across the last several years? 

Mr. STUMPF. Yes, I can do that. 

Mr. DELANEY. Did you ever give speeches where you said it is as 

important to make sure we’re putting our customers’ interests first 

as it is to achieve our cross-sell objectives? 

Mr. STUMPF. I don’t recall; I give lots of speeches. But I always 

talk—when I am with team members or out in the public, I try to 

talk about the fact that what’s good for customers is good for us. 

And I think it’s really important, because you’re asking some really 

good questions here, that the idea that somehow having a customer 

have more products that they don’t use helps us is absolutely 

wrong. It only helps if they use them. 

Mr. DELANEY. Well, if they pay for them, it helps you. 

Mr. STUMPF. Virtually all of them are free. 

Mr. DELANEY. Getting back to the tone at the top, can you find 

any evidence and share with us where you actually said, it is as 

important to make sure we put our customers’ interests first as it 

is to achieve the sales goals we’ve set for this institution? 

68 

Mr. STUMPF. In fact, I don’t know, I can’t recall all my words, 

but I do know this: Every talk I talk about, it’s about customers 

and putting them first. 

Mr. DELANEY. Now, your largest shareholder has a famous expression where he says: It takes your whole life to build your reputation and you can lose it in 5 minutes. Do you think you and 

your institution have permanently lost its reputation? 

Mr. STUMPF. We have a lot of work to do to build it back, and 

I’m committed to do all I can to make that happen. 

Mr. DELANEY. Thank you. 

Chairman HENSARLING. The time of the gentleman has expired. 

The Chair now recognizes the gentleman from Texas, Mr. Williams. 

Mr. WILLIAMS. Thank you, Mr. Chairman. 

Mr. Stumpf, just like many hardworking Americans and members of this committee, I am really angry. And I also am a customer of your bank. But I’m amazed at what you do not know 

about your business. I am really amazed. And I’ve heard more, ‘‘I 

don’t know’s’’ from a CEO than I think I’ve ever heard in my life. 

I came to Congress to deregulate, and because of your actions, 

it’s really making it extremely difficult for me to advocate for Main 

Street or community banks. So I have one simple question for you: 

When are you going to resign? 

Mr. STUMPF. I serve at the pleasure of the board. I am giving all 

my energy now to leading this company through this. 

Mr. WILLIAMS. But you can resign without the board telling you, 

so I just wanted to know that answer. 

I’m also angry because a large number of Wells Fargo employees 

opened accounts for existing customers without their knowledge, 

which is pure wrong, it’s just wrong. And I’m angry because Wells 

Fargo agreed to pay $190 million in collective fines and restitutions, which we talked about today, and you don’t even have to 

admit any wrongdoing. And I have news for you, people don’t care 

about your hurt, they care about their hurt, and I’m tired of hearing about that today. And I’m angry because, under the DoddFrank Act, Wells Fargo would still be eligible for taxpayer-funded 

bailout. And I’m angry because I’m a strong supporter of banks, 

both big and small, but today you really make it hard. What you’ve 

done has really hurt Main Street. 

And finally, Mr. Stumpf, I’m angry because I’m a business owner. 

I own a business right now. I’m a borrower. I’ve been in debt more 

than I’ve been out of debt in my life. For 44 years I’ve owned my 

business, and it sickens me to think that you took advantage of 

customers in the manner that you’ve done. Customers are important. They don’t make that many customers. 

And, Mr. Chairman, I have also learned—if I’ve learned anything 

over the last 44 years, it’s two things: The customer is always 

right. And you’ve tried to teach us your business today; we don’t 

need to hear that. 

And reputation, which we’ve already talked about, is all you have 

when you go to bed at night. And when you lose your reputation, 

you’ve got nothing. And frankly, it’s going to take Wells Fargo a 

long time before they can restore customer confidence in that reputation we’re talking about. 

69 

So let me start off with this: In the past, I’ve been part of a 

banking board like many have in here, big banks, small banks. So 

I understand what that entails. I certainly understand the charge 

that is given to that board to make the bank successful, but ultimately you answer to the shareholders. But as we heard you discuss with the Senate Banking Committee earlier today, top executives knew about the fraud under your watch in 2013. So, again, 

as someone who has sat on a board, I find it troubling that no action would be taken at all. 

So we’ve established that no action was taken by you or your 

board in 2013, but what about your outside auditors which we’ve 

talked about? Can you tell this committee again—and you’ve 

touched on it a little bit—who they were and if you advised them 

of this two-year-old systemic fraud? 

Mr. STUMPF. So I’ll get to your question. And our outside auditor 

is KPMG. They do a wonderful job. And this is on us. We should 

have done more earlier, and there’s no question about that. And I 

don’t, in any way, want to minimize whatever portion of those 2 

million accounts were unauthorized. We take that seriously. And 

they are the ones we put first. 

Mr. WILLIAMS. So let me move on. As CEO and chairman of the 

board of Wells Fargo, how often did you meet with your board of 

directors? 

Mr. STUMPF. We have eight board meetings a year. 

Mr. WILLIAMS. Did anyone on your board tell you to stop the incentive program, that they didn’t like it, they didn’t think it was 

good? 

Mr. STUMPF. There is a committee of the board that is human 

resources and compensation, and that’s not chaired by me. I’m not 

a member of that committee. 

Mr. WILLIAMS. So you don’t know? 

Mr. STUMPF. I do know that we have incentive programs and we 

have controls and we have self-worth, and I don’t—that’s what I 

know about that committee and about our business. 

Mr. WILLIAMS. Did anyone on the board raise any concerns with 

the incentive program? 

Mr. STUMPF. There were people—as we started to understand 

this issue, the board took direct action to make sure that, along 

with management, we understood where the customer harm was, 

and to make sure that the sales process, that we did not have unethical behavior going on. 

Mr. WILLIAMS. I’m running short on time. I’m from Texas. 

Mr. STUMPF. I lived in Texas for 6 years. 

Mr. WILLIAMS. How many people in Texas were affected by your 

mismanagement? 

Mr. STUMPF. There were 149,857 accounts that we could not rule 

out as a possibility of being unauthorized. 

Mr. WILLIAMS. Thank you, Mr. Chairman, I yield back. 

Chairman HENSARLING. The time of the gentleman has expired. 

Pursuant to clause (d)(4) of Committee Rule III, the gentleman 

from Washington, Mr. Heck, will be recognized for an additional 5 

minutes upon the conclusion of the time allotted to him under the 

5-minute rule. The gentleman from Washington is recognized. 

Mr. HECK. Thank you, Mr. Chairman. 

70 

Mr. Stumpf, after sitting here patiently for nearly 4 hours, my 

takeaway, frankly, sir, is that you are in denial. And I say that because I can’t reconcile much of what you have said with the known 

fact pattern. You have said, I didn’t know, in essence. You said, a 

very small percentage of our dedicated workforce was actually engaged in this behavior. You said you’re sorry; in fact, you’re very 

sorry. And you said, we’re going to fix it. 

But the facts are that 5,300 of your employees were fired for inappropriate behavior. And they were fired because they, in effect, 

misappropriated millions of dollars in fees without the agreement 

of your customers, an act which you yourself agreed with Congressman Duffy constituted stealing. And all of this and the publicity 

surrounding it led to a $25 billion reduction in the market capitalization of your company. I cannot reconcile what you said with 

those facts and I can, therefore, only conclude that you are in denial. 

Some here, several, have said you should resign. Frankly, I don’t 

personally see how you survive. I don’t know this. But I too have 

been on a board of directors, and it’s virtually inconceivable to me 

that your board of directors would see fit to claw back $41 million 

in bonus and incentive pay without also concluding you’re no longer 

the correct person to lead this organization. 

But the truth is, it’s not your survival that I am concerned about. 

I am concerned about your company, your bank, your institution, 

the 268,000 people that you employ, and more importantly, the millions and millions of depositors. I’m more concerned about the trust 

level in Wells Fargo and in the financial sector, banks and credit 

unions, because it is, in fact, vital and the heartbeat of a marketbased and capitalist economy. And I’m very concerned about what 

you and the company have done in the way of damage to that. 

I’m not going to suggest that you resign. I don’t think it’d do any 

good, because I think you are in denial. But I am going to remind 

you of some things that you have said. I know right from wrong. 

I tried to lead with courage. I’m going to make it right. You also 

said that you feel privileged to lead Wells Fargo. 

Mr. STUMPF. Right. 

Mr. HECK. And on that, sir, I’m going to take you at your word. 

And so my hope, my request—and this is not a question. In fact, 

I would suggest that it’s beyond a hope, it’s a prayer—that in the 

quiet and solitude of your home and in discussions with your family, you ask yourself what’s in the best interest of Wells Fargo? 

What’s in the best interest of Wells Fargo, sir, not you. 

I do have a quick question. I think some other people have noted 

that it looks like you’re repeating some mistakes in the facts of this 

case, falsified applications, consumers being pushed into products 

they don’t want, and all driven by aggressive sales goals that are 

almost identical to your practices that led to a record fine against 

you in 2011. In fact, in 2012, you paid violations for violating the 

Servicemembers Civil Relief Act (SCRA) for foreclosure of homes in 

violation of Federal law. 

I am privileged beyond measure to represent 20,000 uniformed 

personnel at Joint Base Lewis-McChord. You’re under investigation 

again, sir, for violating the Servicemembers Civil Relief Act for 

71 

foreclosing on cars. Also prohibited. We don’t want men and women 

in uniform— 

Mr. STUMPF. Correct. 

Mr. HECK. —worrying about that when they’re putting their life 

in harm’s way. And I’m going to predict that you’re going to pay 

another fine for violation of SCRA in the millions of dollars. 

So rather than ask a question, I’ll just say, this pattern just 

keeps repeating itself. You pay a fine, you promise to fix it, and 

then lo and behold, a few years later, we’re back at it, the same 

thing again. 

And with that, Mr. Chairman, I would like to yield the balance 

of my time to the ranking member from California. 

Ms. WATERS. Thank you very much, Mr. Heck, for yielding this 

time to me. 

As you know, as the ranking member, I have the responsibility 

for some kind of leadership here, and I’m very pleased that I was 

able to work with the chairman of this committee, Mr. Hensarling, 

today to get this hearing. But as I have sat here, recognizing the 

size of Wells Fargo, $1.9 trillion in assets, with over 6,200 bank 

branches, 268,000 employees, it’s really striking me how huge this 

bank is. 

I’m also concerned about whether or not, as chairman and CEO, 

you can really know what is going on at the bank. I am concerned 

about the length of time it took you to know what’s going on, and 

I’m concerned that maybe you don’t have a handle on your management and what the reporting process is that would make you 

aware of what’s going on. 

You praised Ms. Tolstedt for her management of the division, 

even though she had fired 1,000 employees for this fraud in 2011, 

and yet supposedly it took you 2 years to know about what had 

happened. She didn’t tell you. She withheld the information. And 

you indicated in her glowing retirement that she had done a great 

job. 

I’m really concerned about whether or not—in fact, you understand that we have been sitting here fighting to implement DoddFrank and trying to work out some of the problems that have been 

identified with Dodd-Frank. But you are on the board of directors 

of the Financial Services Roundtable. It’s an advocacy group for the 

banking industry that has worked to defund the CFPB, hobble its 

structure, and remove its ability to curb abusive practices. Now I 

want to know perhaps what you think, now that Wells Fargo has 

been caught by the CFPB for all of this fraud, and I wonder if you 

denounce the Financial Services Roundtable’s actions to get the 

CFPB. 

In addition to that, while we’ve been sitting here, I have learned 

that maybe not only is Wells Fargo too huge to manage, but maybe 

the reason you don’t know some of the detail is because you also 

sit on a number of big boards. You’re sitting on the board of Chevron for $375,000 in total compensation per year, and you’re on the 

board of Target Corporation for $272,000 in total compensation per 

year. You have a responsibility to them. You have a fiduciary responsibility. And in addition to that, during this hearing, 

Bloomberg sent out an alert that you will be facing a $20 million 

penalty for improperly repossessing cars from members of the miliVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00077 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
72 

tary. It appears that the company can’t even make it through this 

congressional hearing without us learning more and more information about what is going on at Wells Fargo. 

I appreciate your apology. I appreciate the clawback and all of 

that. 

But, Mr. Chairman and Members who are left, I have come to 

the conclusion that Wells Fargo should be broken up. It’s too big 

to manage. I served on the conference committee for Dodd-Frank. 

We talked a lot about the living wills and how to learn more about 

how these banks are put together and how they operate. And, of 

course, the five largest banks in this country have failed the living 

wills test, including Wells Fargo. And so I’m looking at living wills 

and the inability to pass the test. I’m looking at stress testing. I’m 

looking at size. I’m looking at this particular fraud that has gone 

on, and I’m worried for the whole banking community that the public cannot and will not continue to trust our banks, which we need 

in this economy in order to do the business to make the economy 

work and run. But they’re looking at us and they’re saying for all 

of you, particularly those of you who serve on the Financial Services Committee, you’re letting us down, you’re not protecting us. 

And so, with that, Mr. Chairman, I’m going to be talking with 

you and the members of this committee who showed their outrage 

here today. I’m moving forward to break up Wells Fargo bank. 

Mr. STUMPF. May I respond to that, please? 

Chairman HENSARLING. We’ll give the witness an opportunity to 

respond. 

Mr. STUMPF. As I said before, I’m sorry that we didn’t get this 

right. I take this very seriously. I’m not in denial. And we will get 

this right. We will fix this. We do a lot of things really great. California is our home State. We’ve been there for 164 years. We are 

a major employer, a major philanthropic institution, and we are 

privileged to serve so many great customers there, and we’ll do 

that the best way possible. 

Chairman HENSARLING. The time of the gentleman from Washington has expired. 

Pursuant to clause (d)(4) of committee rule 3, the gentleman 

from Arkansas, Mr. Hill, will be recognized for an additional 5 minutes upon the conclusion of the time allotted to him under the 5- 

minute rule. 

Mr. HILL. Thank you, Mr. Chairman. I thank the ranking member for holding this hearing. 

Mr. Stumpf, thank you for being willing to appear today. I appreciate your forthright testimony. 

I have been a customer of your company and I’ve admired your 

company and I’ve used your company as an example for my own 

businesses in the past 20 years in developing what I thought were 

best practices and goal-setting for retail bankers across the businesses that I was associated with in the 1990s and the 2000s. And 

during that period of what has happened recently, I’ve recommended your company as a company to do business with and a 

stock to own. 

So that comes with a pretty heavy burden for me. I have the 

same knot in my stomach that you probably have. 

Mr. STUMPF. Yes. 

73 

Mr. HILL. Because, in my view as a former person who has 

worked in finance on and off for 35 years, this just isn’t a one-off 

situation down in the Los Angeles basin that Wells Fargo is struggling with. It really is a systemic compliance failure inside the, I 

assume principally, the retail portion of the bank. 

And I know that it’s a huge frustration for those of us on this 

committee and for your members of your board and your management team, and very hurtful to the customers that have been damaged by it, their reputations, their credit potentially, including the 

933 people in Arkansas who have been affected by this, that resulted in 4 people who apparently worked for you in Arkansas who 

were fired as a part of the sweep across your company. 

So you’ve told us today about line management between you and 

the branch manager, many layers, branch managers, regional managers, area managers that report up, I assume, to Carrie Tolstedt 

who has been discussed today. Is that generally right? 

Mr. STUMPF. Yes. There’s a new leader now in that retail banking business. Her name is Mary Mack. And they have—and she’s 

now in charge of that organization. 

Mr. HILL. And did Carrie report to Tim Sloan or report to you? 

Mr. STUMPF. She reported to me until maybe about a year ago 

or so. I don’t recall the exact date. But then she reported to Mr. 

Sloan after that. 

Mr. HILL. And the credit card issue I assume doesn’t report to 

her. Does that report to the consumer lending executive or to the 

community bank? 

Mr. STUMPF. That’s—that—the—there’s a relationship there, but 

it reports in someplace else. That’s right. 

Mr. HILL. Okay. So it’s a matrix management to the retail side, 

but through the consumer lending channel is where credit cards— 

Mr. STUMPF. I would describe it this way: That the retail bank 

would talk to customers and then they would send the request over 

to the credit card group, which would do the underwriting and fulfillment. 

Mr. HILL. And all those people that I named all sat on your operating committee of management. And how often does that group 

meet and is it by teleconference— 

Mr. STUMPF. No. 

Mr. HILL. —or is it face-to-face? 

Mr. STUMPF. It’s largely face-to-face. It’s every Monday. 

Mr. HILL. Every Monday. And so unrelated to the board, which 

meets just—I think you said in 2015, you had nine meetings of the 

board. 

Mr. STUMPF. I thought it was eight. But it might have been nine. 

Mr. HILL. Yes. And you had 14 meetings of the audit committee 

during 2015, according to your proxy. But that operating committee 

meets every Monday. 

So one question I have is, do you remember this being talked 

about at that operating level when line managers bring their top 

concerns to you, and was it in this same timeframe? It wasn’t until 

maybe 2 years after this was really manifesting itself in Los Angeles? 

Mr. STUMPF. Yes. It was being managed within the business in 

2011. Each business has their own corporate—or their own compliVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00079 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
74 

ance, their own sales efficacy and so forth. So it was brought out 

of the sales part into the line’s control function. And then by 2012, 

they were reducing goals. In 2013, is where we brought the corporate resources in, like corporate human resources, corporate investigations and so forth, because we saw a spike in that behavior. 

Mr. HILL. Right. So now your lead director. Steve Sanger, who’s 

the former CEO of General Mills, is conducting an independent investigation that he’s hired—independent of the corporation, he’s 

hired his own resources, and that’s commenced recently. Is that 

right? 

Mr. STUMPF. As I understand it, Steve Sanger, as our lead director, along with the other independent directors, have hired counsel, 

and they are doing their investigation. 

Mr. HILL. When do you expect they’ll finish their work? 

Mr. STUMPF. I’m not part of that process so I don’t know, but I 

know they’re going to do a full comprehensive review. 

Mr. HILL. I hope that gets released to the public once the board 

has seen it and reviewed it, and that it could be posted out on your 

website. Because I think that sort of independent review renews 

confidence in the corporate governance system, and I would encourage that to be done. 

When I was at the Treasury Department in 1990, 1991, we had 

a little problem in the government securities business. And your 

largest shareholder, Mr. Buffett, became the CEO of Salomon 

Brothers in the midst of that crisis. And Salomon Brothers was 

found guilty of manipulating the U.S. Treasury market at that 

time. 

Have you talked to Mr. Buffett about this or sought his advice 

on this matter you’re facing? 

Mr. STUMPF. I have talked to a lot of our investors, and I have 

had one conversation with Warren Buffett. 

Mr. HILL. Because Warren Buffett, in 2 minutes before the Senate Banking Committee in 1991, probably did the best job, I think, 

on behalf of corporate America. Do you remember what he said at 

that time? 

Mr. STUMPF. I’ve read a lot of his things. I think there was something about, I’d rather make less money, and about integrity and— 

but go ahead and read it to me. I don’t remember that testimony. 

Mr. HILL. Well, I’m going to paraphrase it. He said—first of all, 

he wanted every employee to be their own compliance officer, his 

or her own compliance officer. And he wanted every employee, 

every day when they came to work, to think about the actions they 

took on behalf of customers, that they could read that in their own 

hometown newspaper written by a critical journalist. 

But he summarized it, and what I think you need to summarize, 

if you’re going to be successful in this endeavor, he made this 

quote, which I think people have quoted now for 25 years, ‘‘Lose 

money for the firm, and I will be understanding; lose a shred of 

reputation for the firm, and I will be ruthless.’’ 

Mr. STUMPF. That’s what I was trying to refer to and that’s what 

I remember from that, and I agree with him. 

Mr. HILL. Well, that’s where we are, because I agree with my colleagues, this is hurting the ability of the banking industry to do 

consultative selling. Something that we all pride ourselves on in fiVerDate Nov 24 2008 14:33 Mar 08, 2018 Jkt 026003 PO 00000 Frm 00080 Fmt 6633 Sfmt 6633 K:\DOCS\26003.TXT TERI
75 

nancial services is that we seek to understand the needs of our customers and try to meet them. And this damage by what has happened at Wells Fargo is going to hurt that effort on behalf of community banks all over this country and cause sweep investigations 

of incentive sales programs and cross-selling programs or consultative selling, which is really what we’re talking about. 

But I hope that we will also ask our regulators where they were 

at this time. The OCC clearly needs to improve rating for you in 

compliance and some intensive work you were doing over those 2 

years. But I see no evidence so far that the CFPB, which actually 

has the statutory obligation to be engaged here, was taking action. 

So the last thing I’ll ask you about is, Mr. Himes talked about 

materiality. And in any one quarter, accountants and lawyers and 

bean counters and companies in your finance department tell you 

what’s material and what’s not. But we see sometimes the trees for 

the forest in that situation. And you’ve got the ability and your 

board has that ability to address that. In the chairman’s letter to 

your shareholders—you don’t need a lawyer to tell you what to 

write in your chairman’s letter. And when you spend 50 percent in 

fines and penalties of your net income over a 3-, 4-, 5-year period, 

that’s material. Ten billion compared to 22 billion, it’s a big deal, 

no matter how many small bites at the apple that it comes in. 

And I hope in your 2016 letter to shareholders, that you and 

your lead director, Mr. Sanger, will address what I think is a systemic failure in a few areas of Wells Fargo that’s tarnished this 

beautiful almost 2-century reputation of your company. 

And, with that, I yield the balance of my time to Mr. Guinta 

from New Hampshire. 

Mr. GUINTA. I thank the gentleman from Arkansas. 

Mr. Stumpf, I want to follow up a little bit on the regulators. 

How many regulators did the OCC have on-site at the time? 

Mr. STUMPF. I didn’t hear the question. Please. 

Mr. GUINTA. OCC. How many examiners did they have at Wells 

Fargo at the time? 

Mr. STUMPF. I think I testified earlier, I think it’s around 80. 

Mr. GUINTA. Okay. And how many do they have at Wells Fargo 

today? 

Mr. STUMPF. I don’t have that number, but I think it’s about the 

same number. 

Mr. GUINTA. Same number? How about the Federal Reserve? 

Mr. STUMPF. I don’t know that number. 

Mr. GUINTA. And how about the CFPB today? 

Mr. STUMPF. I don’t know that number. 

Mr. GUINTA. Did anyone at the CFPB instruct you or your team 

or advise you not to share those numbers with Congress? 

Mr. STUMPF. I have not spoken with the CFPB on that. 

Mr. GUINTA. Has anyone on your team, to your knowledge? 

Mr. STUMPF. Nobody on my team has said anything to me about 

not sharing any numbers. 

Mr. GUINTA. I ask that because— 

Mr. STUMPF. On that issue. 

Mr. GUINTA. I ask that because you seem very reluctant to share 

the information with us as to how many examiners from the CFPB 

either were or are currently at Wells Fargo, and that concerns me. 

76 

Mr. STUMPF. I want to make sure I’m very clear on this. I happen to know the OCC number because I was talking with the OCC, 

but I don’t know the other ones. 

Chairman HENSARLING. The time of the gentleman from Arkansas has expired. 

Now the gentleman from Colorado, Mr. Tipton, is recognized. 

Mr. TIPTON. Thank you, Mr. Chairman. 

Mr. Stumpf, I have a letter from someone who has never had an 

account with Wells Fargo, had an account fraudulently opened, and 

was sent back from your compliance department, the Wells Fargo 

financial crimes manager, telling someone who wasn’t your client 

that he needed to be able to provide a complete, signed, notarized 

return affidavit of identify theft, provide documentation, collection 

letters he may have received, request a letter of verification for Social Security number from the Social Security Administration, send 

a copy of the police report stating he was a victim of identify fraud, 

send a copy of his driver’s license, send proof of address, send a 

copy of previous bills, statements, invoices during the time frame 

of fraud. He didn’t even have an account with you. Isn’t that a little bit burdensome? And what are you doing to be able to respond 

to people who have no connection with Wells Fargo but yet are now 

swept up in the net of the challenges that your organization has 

created? 

Mr. STUMPF. Yes. So on that issue, I would like to see it so our 

people could take a look at it. I don’t know that issue specifically, 

but that sounds to me a lot like identify theft by someone else. 

Most of what we saw, and I can’t say exclusively, but of the 2 

million accounts that could not be excluded, those were accounts 

that people already had at the bank and one of our bankers improperly opened a second account that our system closed. So this 

sounds a lot like identify theft to me. But I don’t know that situation in particular. I’d like to look at it. 

Mr. TIPTON. I’d like to be able to get a little personal assessment 

by you of you. Would you label yourself as CEO/chairman of Wells 

Fargo as aware and engaged? 

Mr. STUMPF. Well, I believe I am. I love this company. I’ve been 

here a long time, and I spend most of my waking hours thinking 

about this company. 

Mr. TIPTON. I’d like to be able to follow up a little bit maybe on 

Mr. Neugebauer’s question in regards to the board. You said you 

think about it a lot, all of your waking hours. When did you make 

the board aware of the issues? 

Mr. STUMPF. The board was made aware, generally, of issues 

by—in committees at high levels in the 2011–2012 timeframe. By 

2013, we had talked about maybe in one—I can’t remember which 

committee it was. Surely by 2014. And then when we finally connected the dots on customer harm in 2015, the board was very active on this. 

Mr. TIPTON. So you discovered it in 2013. You were aware, you 

were engaged. We are now in 2016, and now you’re rapidly starting 

to respond. There seems to be a little bit of a disconnect in terms 

of the response mechanism that you’re having there. Mr. Hill had 

just brought up, and you gave a response, saying that you had a 

sense of urgency. Who have you fired? 

77 

Mr. STUMPF. As I mentioned, we fired managers, managers’ managers, and managers of managers. And we’re doing a full review of 

anybody who was responsible for any behavior of any kind that 

would not put customers first. 

Mr. TIPTON. So are you trying to be able to say really that these 

were just kind of lone wolves acting independently? Or were they 

following policies that came from the engaged, urgent manager who 

is the CEO and chairman of Wells Fargo? 

Mr. STUMPF. They were doing exactly the opposite of what a 

CEO wanted them to do. Everything I’ve talked about, everything 

that we train, everything that we publish— 

Mr. TIPTON. So do you have a problem with monitoring from the 

top down? 

Mr. STUMPF. We should have done more. It was our monitoring 

that found this behavior. We should have done more sooner. I give 

you that, Congressman. 

Mr. TIPTON. You have an infrastructure that is set up, a chain 

of command, in terms of your organizational chart. Somebody was 

overseeing the manager of the manager—however you want to be 

able to describe that. 

Mr. STUMPF. Yes. 

Mr. TIPTON. Are there going to be any consequences at that 

level? 

Mr. STUMPF. We’re going to let the facts take us where they are, 

and people will be held accountable. I can guarantee that. 

Mr. TIPTON. Do you have any kind of timeframe for that? 

Mr. STUMPF. I don’t want to foreclose anything that we do to 

make sure we do it right and people are held accountable. 

Mr. TIPTON. There was a report that came out of The Wall Street 

Journal that said that a person in charge of creating the yearly 

sales plan for the community banking unit didn’t know that the 

numbers were exaggerated. Can you identify exactly, though, when 

you’re looking at this, where the breakdown did first start? 

Mr. STUMPF. I don’t—I didn’t read that article. I don’t know what 

that’s referring to. But I know that a lot of us, including myself, 

should have done more earlier. 

Mr. TIPTON. Thank you. 

Mr. Chairman, my time is up. I yield back. 

Chairman HENSARLING. The gentleman yields back. 

The Chair now recognizes the gentleman from Maine, Mr. 

Poliquin. 

Mr. POLIQUIN. Thank you, Mr. Chairman. I appreciate it very 

much. 

Mr. Stumpf, you’re the CEO and the chairman of the board of 

Wells Fargo. Is that correct? 

Mr. STUMPF. That is correct. 

Mr. POLIQUIN. How long have you had that position? 

Mr. STUMPF. I was named CEO in the summer of 2007 and I was 

named— 

Mr. POLIQUIN. Okay. So roughly— 

Mr. STUMPF. —chairman in, okay, beginning of 2010. 

Mr. POLIQUIN. Okay. So 6, 8, 9 years in that—roughly in that position? 

Mr. STUMPF. Yes. 

78 

Mr. POLIQUIN. How long have you been at the bank? 

Mr. STUMPF. I’ve been at the bank—it will be 35 years in— 

Mr. POLIQUIN. Okay. So you’ve been at the bank a long time. And 

one could conclude, and I think you would agree with me, you 

know the bank pretty well. 

Mr. STUMPF. I love this company, yes. 

Mr. POLIQUIN. Yes, okay. You know what really bothers me, Mr. 

Stumpf, along with other things? It’s that I’m looking at this pattern of you folks ripping off your customers, getting caught, paying 

a fine, and doing the damn thing all over again. Now, we just had 

on the board a minute ago, 13 instances of this in the last 6 years. 

And you paid a total of $11 billion in settlement fines. 

Now, you just stood here before us and told us several times you 

know the difference between right and wrong. You’re the head banana over there. I look at you, I look at Wells Fargo. I know it’s 

a big organization. 268,000 employees. 268,000 jobs. Thank you for 

that, sir. But you know something? I don’t think management, 

which means you, knows the difference between right and wrong. 

But I’ll tell you who does. The people I represent in Maine. I represent 650,000 of the most honest, hardworking people you can 

ever find anywhere. They know the difference between right and 

wrong. And one thing I want to just throw out in your lap right 

now, be very clear. I don’t know where this is going. But I will not 

support in any way, shape, or form any kind of bailout using taxpayer money for Wells Fargo. You will have to get through me, and 

through a lot of other people on this committee. 

Now, here’s what I worry about. I don’t worry about Wells Fargo. 

You have 268,000 employees. How many attorneys do you have 

over there? 

Mr. STUMPF. I don’t have that number. 

Mr. POLIQUIN. Okay. Do you have more than 10? 

Mr. STUMPF. Yes. 

Mr. POLIQUIN. Do you have more than 1,000? 

Mr. STUMPF. I don’t—no, I don’t— 

Mr. POLIQUIN. Okay. You have a lot of attorneys, right? 

Mr. STUMPF. Yes. 

Mr. POLIQUIN. I don’t worry about you folks. Somehow, some way 

you’re going to make your way through this. You know who I worry 

about? I worry about our 31 community banks, local banks in the 

district that I represent. Highly rural, Mr. Stumpf. Thirty-one community banks, 500 branches, 9,200 employees. Good paychecks, 

good jobs with good benefits. We also have 58 credit unions with 

196 branches and 2,250 employees. These folks are relied upon in 

their communities. They take their paychecks, and they trust the 

teller, and they trust the bank manager. But do you know what 

happens? When this happens, it flows downhill. 

And that’s exactly what happened in the financial meltdown 7, 

8 years ago, is that all of a sudden because of a small handful of 

big money center banks that took too much risk with the problem 

with the regulators, I understand this, everyone was culpable. But 

all of a sudden, we have this very smothering set of financial regulations that are choking off home loans, mortgages to the folks in 

my district. They can’t get a small business loan to put a new diesel in their lobster boat. 

79 

Now you come along. I don’t know where this is going to go, but 

I will tell you this. The probability will be high that your organization and the actions of you in your organization, this systemic pattern of misbehavior and gross mismanagement, and it looks like 

fraud, is going to find its way to the community banks and the 

folks who rely on them in rural Maine. You ought to be ashamed 

of yourself. 

What do you tell a family? What do you tell a family who is looking to add their fourth child to their family and they need to put 

a put a new bathroom in their house in Ellsworth, Maine, and they 

can’t get a loan because of the regulations? And now it’s going to 

get worse. What do you tell them? 

Mr. STUMPF. Senator, I’m— 

Mr. POLIQUIN. Congressman. 

Mr. STUMPF. Congressman. 

Mr. POLIQUIN. You’re asleep over there. 

Mr. STUMPF. I’m so sorry, Congressman. I’m sorry for what we’ve 

done. Our people also live and work in these neighborhoods, in 

these communities, and we’re trying to do the right thing. I can’t— 

Mr. POLIQUIN. You should have been trying to do the right thing, 

Mr. Stumpf, during these 13 settlements, fines, call them what you 

want, over 6 years totaling $11 billion. That’s the pattern that I 

see. 

Mr. STUMPF. Yes. Well, there’s no question that we’ve had a lot 

of settlements. And every one we’ve learned from and we’re trying 

to do a better job. Thank you much. 

Chairman HENSARLING. The time of the gentleman has expired. 

There are no other Members in the queue. I wish to thank our 

witness for his testimony today. 

The Chair notes that some Members may have additional questions for this witness, which they may wish to submit in writing. 

Without objection, the hearing record will remain open for 5 legislative days for Members to submit written questions to this witness 

and to place his responses in the record. 

Mr. Stumpf, we will expect you and your organization to respond 

promptly and to fully cooperate with our ongoing investigation. 

Also, without objection, Members will have 5 legislative days to 

submit extraneous materials to the Chair for inclusion in the 

record. 

This hearing stands adjourned. 

[Whereupon, at 2:10 p.m., the hearing was adjourned.] 

(81) 

A P P E N D I X 

September 29, 2016 

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