This report analyzes today’s marathon, no-holds-barred HFSC hearing with Wells Fargo CEO Timothy Sloan, focusing on policy issues with impact beyond the future of this embattled company. Although Mr. Sloan mounted a spirited defense of his bank, many of the concerns discussed in this report may gain added momentum from an OCC statement following the session that it remains very concerned with Wells Fargo’s actions to date. Chairwoman Waters (D-CA) made clear that she will be reintroducing her “Megabank Accountability Act” (see FSM Report GSIB11), arguing that the actions – or lack thereof – of both Wells Fargo and its regulators prove the bank is too big to manage. She and other Democrats also called on regulators to remove top executives. While not necessarily agreeing with the Chairwoman on her conclusions regarding size, Republicans such as Rep. Luetkemeyer (R-MO) joined her in condemning the failure of regulators to uncover the actions in question. Ranking Member McHenry (R-NC) mostly stuck to specifics, making clear that he is willing to work with the Chairwoman on the broader issues she raised regarding the largest banks and their supervision.
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