Wells Fargo share price down 1% as Congress questions CEO
The bank's stock falls as its CEO testifies before the US Congress.
Wells Fargo share price is down before the US Congress scrtinises the financial institution’s practices. Tim Sloan, chief executive officer (CEO), is slated to testify before the US Congress.
Why is Wells Fargo share price falling before Congressional hearings?
Wells Fargo stock is likely plummeting because of the negative news about Wells Fargo. Sloan is appearing before the House Financial Services Committee to answer for a series of scandals that have dogged the corporation. He is answering questions about defrauding customers for years. The bank created 3.5 million fake accounts in 190,000 clients’ names and charged them exorbitant fees. Wells Fargo recently agreed to reimburse the customers for $575 million.
In the wake of the scandal, Democratic politicians like House Financial Services Chair, Maxine Waters, have openly criticised the CEO. US Senator, Elizabeth Warren, even called for Sloan to be fired after the news broke about the bank's deceptive practices. At his appearance before Congress, Sloan will promise that Wells Fargo won’t engage in fraudulent behavior anymore.
‘We have discarded our old decentralized structure that allowed prior problems to occur,’ wrote Sloan in remarks he will deliver before Congress.
Sloan also vowed that Wells Fargo would work to earn the trust of its customers.
‘While we have more work to do, we've worked hard over the past two years to address the root causes of our mistakes, make things right for team members and customers, and lay the foundation for a better company,’ said Sloan.
Has Wells Fargo changed after financial scandals?
Wells Fargo has claimed that it is working to better serve customers. However, a recent two-day outage that kept customers from obtaining funds is creating more customer service issues for the bank. Cowen analyst, Janet Seiberg, notes that Sloan has to convince Waters that the bank has changed its ways to improve customer relations.
‘If Sloan can appease Waters at the hearing, then it would represent a major step for the bank in getting past these troubles,’ said Seiberg.
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