Wells Fargo share price down 1% as Congress questions CEO

Wells Fargo share price down 1% as Congress questions CEO

Wells Fargo share price down 1% as Congress questions CEO

Tim Sloan, president and chief executive of Wells Fargo, arrives for a House Financial Services Committee hearing on Tuesday.

Rep. Alexandria Ocasio-Cortez demanded to know why Wells Fargo was "involved in the caging of children" at a House hearing with the bank's CEO on Tuesday. "Why should Wells Fargo continue to be the size that it is?"

Wells Fargo options prices imply a 1.6 percent move in the share price by the end of this week, according to data compiled by Bloomberg.

"We made a decision two years ago to exit two relationships we had with two private prison firms".

"It doesn't feel like they've changed much of anything, to be honest", one of the employees, Meggan Halvorson, said in a statement.

Ocasio-Cortez followed up by asking: 'Why was the bank involved in the caging of children, and financing the caging of children to begin with?' The company forced unnecessary insurance policies on auto-lending customers, charged borrowers improper fees to lock in mortgage rates and foreclosed on struggling homebuyers who could have had debts modified.

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"I don't know how to answer that question because we weren't", Sloan responded.

In his response, Sloan announced that the bank is in the process of cutting ties with one group and has already stopped financing another-information that wasn't publicly known before the hearing. "I'm not familiar with the specific assertion you are making, we were not involved in that".

Ocasio-Cortez's inquiries come as activists more and more search to "deplatform" political opponents by chopping off their funding from banks and different monetary providers suppliers - a concerted effort that conservatives and libertarians have stated threatens free speech.

'Hypothetically, if there was a leak from the Dakota Access Pipeline, why shouldn't Wells Fargo pay for the cleanup of it, since it paid for the construction of the pipeline itself?' she probed. Sloan promised that he has made "fundamental changes" at the bank and its problems have been "fixed".

Ocasio-Cortez appeared to be referencing the fact that Wells Fargo has been in the business of financing private prison companies.

"Because we don't operate the pipeline", Sloan replied.

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The bank engaged in an "egregious pattern of consumer abuses", U.S. Rep. Maxine Waters said at the outset of a hearing she is chairing regarding the fourth-largest U.S. bank.

"What this long, but impartial list makes clear is that Wells Fargo is a recidivist financial institution that creates widespread harm with a broad set of offenses", said Waters.

At the hearing, Porter asked Sloan whom Congress should believe: Sloan when he says he's fixed things, or his lawyers who say he's just resorting to puffery.

Sloan stressed that Wells Fargo is compensating customers who had been harmed, strengthening risk management and internal controls, and improving the culture at the consumer banking giant.

After the hearing, the Office of the Comptroller of the Currency, which previous year fined Wells Fargo $1 billion for faulty mortgage and insurance products, echoed comments made by its head in October that the bank still had much work to do to.

That matter involved Wells employees opening as many as 3.5 million deposit and credit card accounts without customer permission to meet aggressive sales goals.

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The Federal Reserve took unprecedented action on Wells Fargo's business in February of 2018, forcing the bank to replace four of its directors and capping its growth until the bank developed better risk-management practices.

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