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Cramer: My biggest problem with the Wells Fargo CEO's Senate testimony

Key Points
  • "Mad Money" host Jim Cramer discusses his biggest disappointments from Wells Fargo CEO Tim Sloan's Tuesday testimony before the Senate Banking Committee.
  • Sloan failed to own up to one of Cramer's favorite things about Wells Fargo: its business model.
  • Yet even after a very public takedown by senators, Wells Fargo will likely go back to business as usual, Cramer says.
Cramer's problem with Wells Fargo's hearing

For a long time, CNBC's Jim Cramer actually liked the stock of the now scandal-ridden Wells Fargo.

"Long story short: we loved the stock of Wells Fargo for the very thing that ultimately got them in trouble: the cross-selling. We thought the bank had this unique business model where it was able to cross-sell products to individuals who do more than just open a savings account," the "Mad Money " host said.

In light of Wells Fargo CEO Tim Sloan's heated testimony before the Senate Banking Committee on Tuesday, Cramer looked back at the bank's once-captivating model.

"'How can I get more of your business?' was always the signature line of anyone involved with Wells Fargo. Candidly, I truly believed they did it better than anyone else," he said.

But that was before news emerged that the big bank's cross-selling efforts were largely fraudulent and worsened by lofty sales quotas placed on its employees.

Cramer's biggest disappointment was that Sloan, a 30-year veteran of the company that served as chief financial officer and chief operating officer before taking over as CEO, tried to skirt questions about the cross-selling practices.

"I wish he'd just made the case that Wall Street was willing to pay a higher price-to-earnings multiple for shares of his bank precisely because of its apparent success at cross-selling," Cramer said. "That's just the truth — for years, it was why investors, including my charitable trust, owned the darned thing."

The "Mad Money" host figured that Sloan didn't want to tarnish his reputation as an executive by admitting that the cross-selling methods Wells Fargo was so proud of turned out to be bogus.

But even as Sen. Elizabeth Warren called for Sloan's firing, something that the Federal Reserve has the power to do, Cramer doesn't expect much to come out of the hearing.

"The only resignation I expect here is from the people like me who are resigned to the idea that nothing more will be done," he said. "As I said to my partners on 'Squawk on the Street' this morning, this is America, where people who commit white-collar crimes for corporations rarely suffer anything worse than some firings and some clawbacks and some nasty looks at the supermarket. "

So, despite Warren's fiery words and Congress' seemingly stern song-and-dance, Cramer figures little will ultimately be done to make sure Wells Fargo changes its fraught company culture.

"Beyond that, I guess I could tell you to buy the stock, but ... I like so many other bank stocks more because it turns out that Wells Fargo's past strength was illusory," Cramer said. "Before the scandal broke, the stock got a premium valuation because of the cross-selling. Now that's gone and it's just another bank. There are zillions of 'em out there, many both cheaper and better."

WATCH: Cramer's issues with Wells Fargo

Cramer: My biggest problem with Wells Fargo's congressional hearing

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