×

CEO pledges that Wells Fargo is 'a better bank' than it was during sales scandal

  • In total, more than 1,780 of the 5,200 or so workers dismissed as the result of Wells Fargo's wayward cross-selling practices are back on the job, CEO Tim Sloan told senators.
  • Sloan faces grilling on Capitol Hill as Wells continues to try to put the scandal in the past.
  • Wells Fargo's stock has only recently turned positive thanks to a late-September rally, but is barely positive for the year.

Wells Fargo CEO Tim Sloan faces grilling before the Senate Banking Committee as Wells Fargo continues to try to put its fake account scandal in the past.

Fargo outlined a string of reforms the bank has put into place since the issue came to light in September 2016.

However, committee members are likely to continue to hammer on the bank for its conduct.

"The changes Mr. Sloan and his team have made are not sufficient to reform a corporate culture that is willing to abuse its customers and employees in an effort to pad its numbers and increase executive compensation," Sen. Sherrod Brown (D-Ohio) said at the start of the hearing.

Investigators and the bank have revealed that some 3.5 million accounts were affected by conduct in which employees enrolled customers into accounts without their knowledge. The cross-selling was done to meet aggressive sales goals that since have been terminated.

The bank has shelled out more than $300 million in fines as well as settlement costs associated with a class-action suit. In addition, it has ended its relationship with several senior executives including former CEO John Stumpf.

Tim Sloan, president and chief executive officer of Wells Fargo & Co.
David Paul Morris | Bloomberg | Getty Images
Tim Sloan, president and chief executive officer of Wells Fargo & Co.

Sloan promised that more changes are on the way.

"Wells Fargo is a better bank today than it was a year ago. And next year, Wells Fargo will be a better bank than it is today," he said in remarks prepared for a Senate hearing Tuesday.

Wells Fargo has rehired more than one-third of the employees it axed in the wake of the bank's fake accounts scandal, Sloan said.

In total, more than 1,780 of the 5,200 or so workers dismissed as the result of Wells Fargo's wayward cross-selling practices are back on the job, Sloan said.

The rehirings were part of the bank's commitment "to the former Wells Fargo team members who were affected by the Community Bank's old ways of doing things," he said.

"Those folks coming back agreeing to be part of the team reinforces the changes we're making in the community bank are taking hold," Sloan said during the question-and-answer part of his testimony.

Still, shareholders haven't been convinced.

The stock has only recently turned positive thanks to a late-September rally, but is barely positive during a year in which the S&P 500 has surged 13 percent and bank stocks otherwise, as gauged by the SPDR S&P Bank ETF, have risen 4.3 percent.

In addition to the rehirings, Sloan said the bank is making a number of other reforms and is continuing to reimburse affected customers. Wells will provide an additional $2.8 million on top of the $3.3 million it already has refunded. The bank also is sending "mystery shoppers" to various branches to make sure sales practices are above-board.

"We are resolving past problems even as we make changes to ensure nothing like this happens again at Wells Fargo," Sloan said.

WATCH: Warren Buffett believes those responsible for the scandal should pay.