The practice began in 2011, and Wells Fargo has fired more than 5,000 employees the bank says were involved in the scandal. He is scheduled to testify Thursday before the House Financial Services Committee.
Last week, Stumpf spent three hours in front of the Senate Banking Committee.
Wells Fargo stock dropped six points between September 1 and September 29. Several called for his resignation.
“Do you appreciate the kind of courage it takes to be a whistleblower?”
As lawmakers pointed out at congressional hearings Thursday and last week, many Wells Fargo customers are blocked from suing the company because of arbitration clauses, little-known contracts that often ban customers from taking part in class-action law suits. The two pension funds have a total of $2.3 billion invested with Wells Fargo. The House committee continues to gather thousands of pages of documents and plans to interview Wells Fargo executives. He said he “will not hesitate” to issue subpoenas.
Stumpf, who was seen preparing in the chamber more than 30 minutes before the scheduled start of the hearing, said during his opening remarks that he was “deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public”.
California suspended its financial relationship with Wells Fargo effective immediately, Chiang said, and will not do business with the company for at least a year.
Capuano then launched into a series of accusations about the implications of the fake accounts, saying that Wells Fargo “screwed” student loan borrowers, mortgage borrowers, credit card holders, and others. Regulators said they issued and activated debit cards, and signed people up for online banking without permission.
Rep. Mick Mulvaney, a South Carolina Republican, said, “The damage you have done to the market and your industry far exceeds the damage you have done to your business”.
Some Democrats on the committee questioned the timeline that’s emerged.
“Let’s call it really what it is: some of the most egregious fraud we’ve seen since the foreclosure crisis”, said Rep. Maxine Waters (Calif.), the top Democrat on the panel.
Whether the unusual takeback from his compensation will be enough to save Stumpf’s job is hard to say.
Stumpf insisted customers’ loyalty to Wells Fargo remains as strong as ever.
Rep. Gwen Moore told the story of a female Wells Fargo whistleblower from her district in Wisconsin who was pushed out after complaining about sales tactics. “Have you resigned as CEO or chairman of Wells Fargo?”. He said he sold stock with proper approvals and claimed the sales were made “with no view about what was going on”. “It seems suspicious”, Maloney said.
The bank had planned to do so by 1 January but was accelerating the process, he said.
Lynch cited allegations of widespread fraud at Wells Fargo as well as claims by former Wells Fargo workers who told CNNMoney they were retaliated against after flagging fraudulent activity.
Lynch said: “These whistleblowers were intimidated, or even fired”. Getting the Consumer Financial Protection Bureau in control of Congress and out of the Fed is probably not going to happen now. “This has now created a cross-selling bubble at Wells Fargo”. He will also work without a salary during the bank’s internal investigation, while former retail banking head Carrie Tolstedt will forfeit $19 million in stock, the bank said.
Stumpf will forfeit $41 million in stock compensation and forgo a bonus this year, according to a Wells Fargo statement. “Any fees these customers may have paid have already been refunded and deposit customers have also received refunds on fees”, Stumpf said.