The chairman of the gentleman from mr. From texas is recognized. Thank you madam chair. Madam chair, as a practitioner, i once represented a rips recipient of welfare who is charged with a crime, because she made more money at a job and receiveds some benefits from the federal government. She had to be prosecuted. A crowned with allege. If this bank works much smaller, had maybe ten employees who were engaging in this type of activity, opening an opening up false accounts, fraudulent accounts, creating fraudulent credit cards. Someone would be prosecuted. If small banks would have had prosecution take place within the rank of the person within the bank. Evidence shows that small banks have had persons prosecuted. But wells fargo created 1. 5 million fraudulent accounts. Wells fargo had over 500,000 credit cards created fraudulently. Is it the case that if you become so big, and you create such a grand steam, that you are beyond the law of the law to apply to wells fargo just does it apply to that welfare recipients. Just as it would apply to any small bank in this country. Wells fargo cannot be too big to prosecute. It cannot be too big to jail. Wells fargo has to be held accountable. We cannot allow 17 billion 296,835,949 dollars in penalty to become simply the cost of doing business, while these criminal activities were taking place, you are making billions. You sat on the board, and you knew what was happening, and this morning you as much as a knowledge, when the chairwoman asked about the chaos. Did anybody ever think or say somebody should go to jail somebody has to be prosecuted this is a crime . 1. 5 million accounts. It is unbelievable. It is unimaginable. Yet no one has been prosecuted. Maybe i am mistaken. If someone wells fargo had been prosecuted for these grievances would you kindly extend your hand to their to review. Let the record reflect that no hand has been extended into the air. I shall have a cool photograph of this in my office. And when have people asked me about this picture, and it will show you, it will show you with no hands raised and i will explain this to people. You cannot escape the long arm of the law. It applies to all of. If you believe that this pork it have done more to bring to justice those who perpetrated the criminal activity, raise your hand please. Let the record reflect that the fort numbers have concluded that no one that the board could not have done more because no hand was raised. I shall have a photograph of this in my office along with other photographs that ive collected from persons who have been in similar situations. We are now at a point in our history where we have to rethink the wells fargo paradigm. I concur with those who are saying we have to rethink whether or not wells fargo is not only to pick to fail, but we corrected that. But also too big to exist. Maybe you are too big to manage. Maybe the solution is going to have to be something that emanates here, because you are not being prosecuted. At some point the arm of the law has to reach wells fargo. I yield back my time. The gentleman from texas is recognized for five minutes. Thank you madam chairman and both for coming here today. Yesterday we heard from the new ceo at welshs who said wells fargo has a lot to do for these scandals to go unnoticed the previous ceo seemed to expand businesses to fix underlying problems that cost customers to be harm in the first place. As Board Members, i am disappointed that you are not more active in your positions to get wells fargo back to the strong presence that they had historically been in this country. Reports uncovered that the border is well aware of the regulators concern over sloan sport performance. Yet he was still able to keep his position a ceo. As a small im a car dealer in texas, i know how important we have attitude at the top levels of leadership are to my employees. The ceo sets the tone. If they are not taking the pass seriously it is hard to get other employees to change their behavior as well. Quickly, why did you stick with temps long for so long . If i could just respond. No maam i have not get time answer my question. Tims long, we made him the ceo when we replaced john immediatelys got the sales practices and center replace most of the management in the community he took action quickly. He had problems that needed to be addressed immediately but the time it takes to find someone, and has a number of you know the question of whether or not anyone with the ability to do this role would be willing to come into this role is a question of inaudible i understand. Its the scandal broke it made sense to bring outside experts to make the necessary shortterm adjustments to protect consumers. However, it also doesnt seem like there was a large with to mr. Quickly, did you have any concerns that wells fargo cannot do this work internally . Why was it not a priority even after the regulators voiced there concern . I definitely had concerns and was unhappy with what was occurring with respect to the use of third parties as the former ceo of a large professional services firm, i know that sometimes when you want to accelerate progress he will look to a third party to try to accelerate the activity that needs to be taken. But we need to build capability. We need to accrue capability. We need to build capacity into that independent Risk Management group. One thing that i know is true, to find the most able resource takes much more time, than finding the most available resource. Im not happy with the time that its been required, but i am pleased with progress is being made, and i agree with the points that mr. Sharp made yesterday with respect to the points that the real ancient nature and the action needs to be taken, and his absolute focus and regulatory are good. As we mentioned it a highly unusual steps to make the Public Statement thats temps alone was being overly optimistic about his progress with wells fargo. Mr. Quickly in your testimony you state that once the board was made aware, they were not receiving quality information decisive actions were taken to fix the issue. My question is what structural changes that were made internally to ensure that the board with sikh accurate and information moving forward . We have a very active communication between community chairs and their Liaison Officer who is bringing a information. The quality of the data that is coming in our direction. I was pleased with the elimination of the federated model. I was pleased with the need to strengthen the independent Risk Management group. With that came Higher Quality information to the board to enable stronger and more effective oversight. In closing, let me just say this. I hope this institution eliminates the, i dont know attitude, so many people have said, i dont know. I have 200 employees and i think i know, that the i dont know attitude has really run rampant, and i hope that your leadership level will stop that and i cant believe how much they pay you boards of directors. Gentlemen mr. Cleaver also the chair for the subcommittee on National Security and managing policy is recognized for five minutes. Thank you madam chair. Let me first of all expressed some appreciation and some surprise. You are not subpoena of your own volition thank you for coming. I appreciate you coming. Let me try to get some information from. I am gravely concerned about the report we received. Are either of you aware of an informal official secret that channel to the cfpb. Three regulators at cfpb . I am not aware of that, and you do not believe that it occurred. I did read the committee report. I was the one who had quarterly meetings with mr. Barr can steam and when i met with him there were always members of the cfpb that are with him and i was always accompanied by people from wells fargo. Thank you. So you are saying that people got something wrong or made it up islanders. I understood your question was that channels of communication with cfpb and im saying no so according to the report of somebody did something incorrectly, or falsely, maybe even with intentionality, when you said youve met with mr. Lincolns team, do you detect any and account Racial Attitudes when he met with him . I did not. He came to our board of directors and spoke on behalf of cfpb and following his report to the board, biden reached out to try to meet with him if he had time when i was in washington. Again, in those meetings i was always accompanied by someone from wells fargo, and he was accompanied by other seema cfpb. We never had a oneonone. Im interested in that because of the fact that we know i was his text message. It was his email. You are not aware of that . I read what was in the report but i had never seen it before. I was sent to me just summarizing the discussion that he had had with mr. Burlington steam, and at the time that he was departing. I did not follow up. I never had further communication with him. But when you were you alarmed when you saw that . Well if you have to think about it you are not. So theres an allegation about that channel which was not there. Ill change. Its offensive to me as a human being to be ripped first to somebody who would call me by my color. Points the Compensation Committee . Im trying to find out get information who appoints . All the committees are appointed by the nominating committee. Is that the desirable committee on the blackboard . I dont think its the necessarily the desirable committee. Committees of had responsibility in their careers for Human Resources, we also need to make sure that committees diverse. Because they do with so many issues related to our management and employees. A lot of people on appropriations committee, mr. Quickly. Do you im sorry did not understand the question. The compass compensation boy, people pushing and shoving. . There was a time, im a little sensitive to this, but there was a time when everyone wanted to avoid the Audit Committee because it was a place not to be, but i believe the aggressive approach. Finish your statement. With respect to the Human Resources committee that has become a difficult seat on any board and i dont see people elbowing and trying to have that privilege that is a very heavy lift. Thank you very much. Thank you davidson from ohio is recognized for five minutes. Thank you chairwoman. Mr. Quickly mister do miscue now they are no longer with the board, do you believe that some of the criminal actions taken by employees that wells pharco should be prosecuted by federal officials . Or do you believe that the fines have already been implemented is enough . I appreciate i wanted to answer to that before. When we didnt investigation of what happened and sales practices we delivered all the evidence we found to the sec the dhs and civil and criminal youre highlighted you paid fines and settlements to the corporations. Do you acknowledge that crimes were committed . That is correct. We dont have the ability to prosecute that we what we did do with the individuals that we found to be comparable, was to forfeit not pay compensation to, terminate for cars and we find individuals through those mechanisms 180 Million Dollars or so and in particular cases with significant amounts of money shouldnt the federal government prosecute them for committing federal crimes . That is a decision for the prosecutors, but we are having no way he impeded the ability to do. So quickly . We provided all the information that we learned through the investigation. Should they be prosecuted . They committed crimes. Im not in a position youre not in a position . I would say yes. So you guys say present . On an essay yes no should they be prosecuted . Was not the atms it wasnt the conference rooms. So many were 12 for wells fargo committed crimes . Should they be prosecuted . Pathetic pathetic. Im glad youre not on the board frankly,. Presumably, by getting higher for such a fort you had an exceptional amount of experience. You are well qualified. Consider so by someone who offered you to position and generous compensation package for being Board Members. How is the culture at wells fargo different than the presumably positive cultures that you are part of the four . Or is this just endemic of all the places. Should we look at all the industries that the world is looking at for wells fargo . In we have stated clearly that culture changes needed. Im pleased with the progress that is being made. These are early days for charlie, but his commitment to state to change cultures it open in my Opening Statement that is his top priority. Better late than never. I think he has a lot of potential. I like his background. It is not my job to hire Board Members or ceos of any corporations or but i do know the culture matters. Unless he is empowered the change of the ship of 270,000 employees, that culture will not change overnight. A seat of government having seen very little action by the executive branch with a duty to take action where federal crimes were committed, i think it is right that the legislative branch call attention to. That not just with the failures, but with this particular bank but with the failures of the department of justice to prosecute people. The idea that every day americans feel like there is one standard for them in a different standard for the well connected, well to do people that operate Companies Like wells fargo or frankly work at the fbi, national intelligence, cia, or any other part of the executive branch. We cannot have people going around locker, up lock him in, because the department of justice continually fails to a play one standard of law, and have a lady justices blindfold. There has to be accountability. When crimes are committed particularly in cases like this, six plus billion dollars in fines, and an acknowledgment that the crimes were committed, someone should go to jail. We need our department of justice to provide that accountability and winning Board Members that are going to do their duty. I look forward to the progress made under new ceo, and i hope we never need to see wells fargo here again except to commend am for the positive change and culture that has been accomplished. I yield. Gentleman from colorado is recognized for five minutes. Im i may sound like a board apologize compared to everyone else here because i look at law and little differently from the. Others i am a customer of the bank and have been a customer for 40 years. I am a customer that went from two to eight accounts and the lines of credit that i had when i just got out of law school got cut in half, but given a credit card for twice that amount with a big line of credit attached. Things i never asked for just appeared. I know the abuses that occurred. I like my problem here, is there have been a lot of time that is past obviously. The court details, all of that. The board and some instances have taken some serious action with mr. Stump with mr. Sloan trying to deal with the consent, agreements betimes is kept passing. My questions to two, and you can answer them as you choose. I think there are three choices for me sitting up here. Either your derelict in your duties and did not address these Consent Orders, or the culture of the bank needs to be changed pretty traumatically in terms of its personnel and operations, or the thing is just too big for any board, any manager to get their arms around it. It cannot be done. So if you could respond to my concerns. What we have found is that some of the issues directly attributable to when the. Some issues are attributable to the structure of the way the companies managed. The decentralized structure, and that is required to recentralize and also standardized and simplified the way all of our employees do their work. We need to be much clearer about that what that looks like is for example, if you take 83 different Human Resource department and put them together, you dont get one fully run functioning Human Resources department. It takes one of quite a bit of time to get a stop central to work with 165,000 employees. That leads me to other questions. Free mr. Quickly. I could just comment on the multiple choice you offered. I would choose culture change, and that is what you heard from our ceo yesterday. He is struggling to build a culture of Operational Excellence and integrity as a number one priority. I am pleased that that is what he said to the entire team on day one. He has not veered from that message. He continues with execution execution. Let me challenge you both on that, then. I dont know how many customers 70 million customers . 275,000 employees, 83 personnel departments . At least five years from the first Consent Order to try to remodel or revamp a culture, and yet that has not taken place. Still ongoing, and with a lot of things unanswered. It is getting to me, that this thing its just too vague, and that is not the answer i was thinking i would get to, but that is where its going. I i do not think the problems are function of size, i think theyre a function of the way the companies organized and the way they have been an organized historically. But now weve gone five years. How long is it going to take to restructure or reorganize . That was i was a bankruptcy lawyer for a long time that a lot of real organizations. How long do you think this is going to take to reorganize this company. You can look in the rearview mirror. Weve got a new ceo that you heard from yesterday, and you saw that he is moving with a sense of urgency. He has a new operating committee, he is building the culture, and this is his number one priority and he filled the seat of chief operating officer who has made regulatory progress. That individual so the last two ceos were capable of doing that . Youre saying this is different . I believe having a ceo from the outside is absolutely different. There was a question earlier about what other differences between mr. Sloan and mr. Sharp and there is no question, this is different under charlie. Ive been on the board for six years and i am now working with my fourth ceo. For the board was not derelict and its duties but very much actively at the table and trying to drive change in a way that could be sustainable, and to make sure that customer harm never occurs. It is absolutely what i wanted and with the ambition. Was thank you i yield back. Madam chair the consent request. Without objection. Bankers were sent to business sent to prison prison. Over fake accounts scandals jobs article that tracks the amount of penalties that wells fargo has paid since 2000. Please let it be placed in the record. Without objection. Gentleman from tennessee will be recognized for five minutes. Thank you madam chair mister quickly and mistook for appearing today. Missed two, and your remarks how you came up through the ranks as a Teller Customer Service representative, i did the same shop. Back when i was younger. My question, and my district wells fargo does haveretail presence. If you are on the front lines todays Customer Service representative and you had one of your main street customers coming to the bank, hourly employee, Small Business person, what have you. Why would you tell them that they should continue banking with wells fargo after these deeds . Thank you for that question. I would like to talk a little bit about the frontline employees at wells fargo. Frontline employees out wells fargo were not the reason for the sales practices. Yes it was the way they were manage. There are hundreds of thousands of those employees who come to work every day to observe who have served their customers for 40 years they have been with their customers 40 years. The bond between those employees and their customers and the service that they are committed to, the importance of the bank to those customers has been something that to me, with all of the ugliness that i have seen, is the reason i joined the board of wells fargo. The employees who work there has been much much harder the time that we have created damage to their reputation. Into the companys reputation, yet they continue to love this company, they want to do everything they possibly can to make this company succeed. The customers are pulling for them as well. I reclaim i time and asking a different way. Wells fargo has put those frontline employees in a position of having to defend actions that you have just stated there we are not responsible for. What do those frontline employees tell their lane street customers about why they should continue banking at wells fargo . They tell them about the service that they offer. They Pay Attention to the customer needs. A look at the customers needs, they look at the products that we have that need those customers needs. Were still the largest Small Business with the largest lender with moderate income area Mortgage Lender large agricultural lender. We arent important in the community and our customers. Would you agree that the wells fargo brand and reputation is damaged . On arguable. Do you believe it is irreparably damaged . I believe it can be recovered and the plants that charlie reported yesterday looking again at the future wells fargo were optimistic. We need and want a stronger wells fargo. Yesterday we talked about sales incentives that were provided to employees under mr. Slowing and what they are today. How do you compare those sales incentives of those employees today versus those under slump . They were terminated as soon as the board was informed and we understood it was part of the cost of how this abuse of behavior occurred. Im delighted that this is the part of the past. The new structure focuses on Customer Experience and how the individual that comes into the branch that you are asking about, what is their experience . And what do they benefit from being there . Hutu if you are no longer on the board. But i will ask you to speak for those members who are currently on the board. I will start with you mister. Did you believe that all current members of the boy had the right attitude for new culture at wells fargo . I absolutely do. Many of them were recruited knowing what happened at wells fargo and being committed to making the changes necessary so it wont happen again. Mr. Quickly. The same im confident and my form more former colleagues and their commitment to do what is. Right i yield back. Thank you. Gentleman from ohio, also the chair for the subcommittee for inclusion is recognized for five minutes. Thank you. I have been sitting here for this whole herring trying to digest the questions in your spices and cry quite frankly im trying to figure out. What you thought your role were as trustees and what you got paid for with so many of these widespread consumer abuses. I regulatory findings, the lack of effective gob corporate governance. Let me start with my question furs to you miss you can. You took great pain and writing about your background and your testimony to us, more than i have ever seen and then any other testimony. He reminded us that you started out as a parttime teller at a bank. We transitioned as an account clerk. You take great pains to tell us that you are the Second Lowest paid employee and how you put the customers first. How you were to weigh up. How you became the first woman to chair the American Bank association, the board of governors, and how much you understood and knew about regulatory practices that you are just duller in this. Yet you act like you are a member of us. And your testimony you didnt say you were as appalled as the members of congress. With all his findings, and you did not know how it happened. That is appalling to me. Then i noticed that you then are the one that also agreed to mr. Sloan payments. The board decided that mr. Sloan was worth more and 18 Million Dollars in compensation, including a 2 Million Dollar bonus. Despite all of this miss chief, you also a proxy statement that you released to the investor stating, the board decided toward him a cash bonus for 2 18 as recognition for his substantial progress and changing the culture and Business Practices at wells fargo, and building out a strong management team, the focus on the remaining work stress in the compliance of operational risk. With everything you knew, being paid, being responsible and this next round, and then you hear about the abuses to the consumers. Tell me why you drafted the statement and you really believe this or did someone make you do this . Were you paid extra to do this . Congresswoman, i joined the board wells fargo because of the company that is not my question. Tell me you wrote a statement about him after all these things and you were there. That happened before when you wrote the statement and 2018. We did not find that mr. Sloan had any responsibility in sales practices. He became the ceo in 2016. We paid him a lot happened. We heard congressman read out all of the things that happened between both of you and you can jump minister quickly if you want to respond that you are also there and certainly read and witnessed when she wrote this to the shareholders. Did you had did you feel this was misleading to shareholders that wells fargo . There is no question that i read the proxy, do you agree with it yes or no because my time and i have a question for you . Yes. So you all think despite now saying its appalling, all that youve heard that has happened, even in 2018, you know what . This makes me feel that you are irresponsible and all of the things, and it is criminal that you are even sitting here. Mr. Quickly let me follow up on congressmans line of question regarding a back channel relationship between wells pharco and cfpb, specifically a political appointee of the trump administration. You remember the question. Mr. Quickly, you stated to mr. Cleaver that you did not believe the back channel existed, yet and upending three which is already in the record of the majority staff report heres the email. From acting ceo alan to you regarding this political appointment. Are you aware of that . I did see the email in the report. Yes do you still have the same response that you had after in quote says political . I interpreted the quote political he was an appointee into the cfpb. Im sorry my time is up and i yield back. From texas mr. Gonzalez is recognized for five minutes. Thank you madam chair. And want to begin by thanking and crew is a constituent of mine who is watching from back home. I will begin by former chairwoman did today you have the honor of being the first board member to testify in front of congress. You election your testimony that you and the rest of the board learned from Public Statements that over 20 times the number of employees were terminated and originally disclosed to buy management. Yet known and management was expired for this. At this point you in the board retain independent counsel to conduct a full and an tethered investigation into the coal scope and causes of the misconduct. Allegedly this is one of the board acted to barely repaired the damage done. Again, your words not mine. Since then, he was wells fargo engaged and charging improper interest on your customer account, sold unnecessary auto insurance, or closed on customers homes after wrongful denial of loan modification achievements agreements, and especially through people out in the street, and finally purposefully reduce the customer investment returns on their sales of wells fargos advisers, products by actively trading securities. You had this close that long term. All of this conduct is admitted and when Consent Order or another. There are many active and opening orders. That is quite a lot to digest. I want to ask you, why should we say why should we not simply remove the bank charter, break up the company and let the banks out there that can run clean operations have your customers or wells fargos customers . How many years until you can probably properly serve your customers. You do not have to answer that i know events and one way or another. The attorney still to clients funds and i know this because i am a lawyer. I have practice law for 20 years if you deceive clients as to the nature and scope of the representation of them in consequences potential jail time, why wouldnt banks charter be any different . You can answer that. There were employees who made criminal acts. People were fired. To the acts that they committed. Was it management . Yes. In the case of sales your management . The senior ex secular senior bank was exterminated. The management of the Auto Division was terminated and in individual cases when there was misconduct, those employees were terminated and the appropriate suspicious activities were filed i believe. It is clear that you did not serve her best clients interest. I think you admitted that already. They were up to me, and i believe when many members of this committee on both sides of the aisle, a few of you would be in jail today. Certainly, if you are the president of the american bar so cetacean instead of the American Bankers association you would be disbarred today. I clearly hope the department of justice continues to investigate this bad act actions by bankers and Board Members across the country and hopefully stop this. The American People are looking for to. This i yield back. And they had their having problems with this then you can speak the same to one of the things i want to know miscue for you to respond on is that in 2017, independent investigation, a report released materials pharco fraudulent accounts scandal, the board was suppose to accomplish three girls and these are the ones i want you to response to. So you have said some things about them but one must get to the Company Sales scandal and identify solutions who would never happen again and restore trust in the bank and response wells fargo board, when i think we blaming the ex employees, but dont you think yourself included fail and oversight duty . By serving on the board you could tell on those three issues that came up, how is those three issues handled . The root cause was found to be that the sales goals were in appropriately set. They were too high. And that the Sales Management was aggressively pursued. To restore the confidence what was discussed in the board . The sales goals were eliminated. The employees were terminated. The new Incentive Plan was designed to reward Customer Service and two sort of individual goals. Some of the behavior to get the incentive it was more to avoid criticism by the managers. The reason, i have been involved in sales for maybe 40 years. I know that what happened is management does set the sales goals. Four agents and so forth, goals for you to try to reach. But i didnt know didnt know until the chairwoman stated it. Banks that have such sales goals, trickle down to all of the branches. So that they would go out and try to attract more business. When i cannot understand is how, even though you said these employees were terminated. How could managers that have been in the organization for a long time would not want to monitor all of these branches of sales goals when they had to know something was going wrong . Even though you said they were eliminated. Im sure wells fargo still has sales goals they have to meet. How does that handle now through the board . When they established goals they want to meet, to be the Third Largest bank. We were talking about being a bank that provides resources to Small Businesses, to minority forms firms and so forth. How do you all handle that now . Order to make sure that you do things that are good in the marketplace. But that allows things to happen such as buying conference that they did not need. 20,000 of them may have had their vehicle repossessed from results like that. How do you handle that now . Again, protection insurance, once we found that issue, we quit requiring the fourth place insurance. That requirement is no longer in place. You want to respond to that . The effort was made to one customer at a time. Identify harm. Then be able to remediated. Charlie scharf gave an update yesterday with respect to remediation and the aggressive rip approach he intends to take to excel rate the timing that is required to get that done and get that done right. Of course that might not be able to get answered but is wells fargo to large . I do not think wells fargo is too large. It needs to change its culture and that is underway under the new ceo that we have recruited. Chair i yield back. Thank you. The gentlewoman from michigan, miss tlaib is recognized for five minutes. Thank you madam chair. Thank you so much for your leadership. Have you all seen this . Yes we have. I know you might not have it in front of you but on page 13, it lists a snapshot of the abuses which you called culture. I call that criminal schemes. You made money off the backs of poor people. Off of working people. Fake accounts, millions of people. We are not talking about a short period of time or one mistake. Were talking about some from 2011 to 2016, literally enrolling millions of customers and banking products and accounts without their knowledge or consent. You are talking about 27,000 people impacted by unnecessary auto insurance. I would not call it unnecessary, i would call everything fraudulent, criminal. Unnecessary means the fact that you enrolled banking customers, they literally had their vehicles repossessed following defaults driving from this added insurance costs that they did not need or did not want. Corporate greed is a disease in our country. It is so bad that it infiltrates and i dont like it when Corporate America calls it a cultural issue. It is a crime. To defraud americans. Lets be very clear about that. I dont want you to see my passion as political. Its the fact that i have the third fourth Congressional District in the country. Frontline communities that get targeted by this. Not the higher income folks, the folks that have two or three jobs. The folks that are trying to survive right now, they are in survival mode and have been targeted. Yes or no. The fact that we saw miss duke you were on the board since 2015, mr. Quickly youre on the board since 2013 correct . On page 13 it talks about Service Members abuse. Between 2006 and 2016, wells fargo based hard Service Members higher Interest Rates than under federal law. You would consider that crime miss duke . I would. Mr. Quickly . I would. That remediation that was undertaken we took the lead and was very servitude. I dont know what is going on with a Credit Report but im working on that with the chairwoman trying to get peoples Credit Reports cleaned up. Affecting employment, access to housing, all of that. Erroneous mortgage fees. From 2013 to 2017. You are both on the board. Were not talking one year or six months of bad behavior. It is criminal schemes on working class folks. We are talking about over a decade for many of these criminal schemes and these corruptive kind of behaviors. Having your chair come before this committee yesterday and not be able to truly answer some of the questions and various details was troubling to me. I need to know from all of you. Courageous of you to come before this committee. But this needs to be read by every single board of directors. Every single one of them. They need to read this. Because i do not think they realize it is not only about numbers. Behind every single report in here is actually a story of a human being that was impacted by these criminal schemes. And so, i want to talk about something, i have a series of. I want to emphasize to you all, to try and incorporate an incentive here. If you have your ceo getting paid 200 times more than your own employees. And they have to get on public subsidy. Dont you think that is unfair . Do you think that right now having your bank tellers and the folks that work in your institutions getting paid 200 times less than the ceo is problematic . I have been a bank teller and i have been paid at the lowest rates and i know how difficult it is to survive on that. I think we need to address both the way we compensate them but also career passing because i was able to learn and take advantage of industry education and opportunities. Ms. Duke at the same time, theyre in line to get public subsidies from the system. You are allowing corporate greed to allow to fester within your company. Mister quickly do you agree that we should be paying youre workers living wage . They should not be paid 200 times almost close to 300 times less than what your employees are getting paid . I responded to that yesterday with respect to what hes doing on minimum wage charlie responded to that. Im a former member of the board. I recruited him and i am pleased that i was able to get him to say yes are you pleased with the fact that. Thank you madam chair i yield. Gentleman from South Carolina is now recognized. Thank you madam chair stew can you explain what the normal duties of responsibilities were for you another Board Members . Yes we receive materials and connection with meetings. We schedule meetings we had meetings with the board. How often were meetings . How many meetings did you take out of the account . When i resigned i removed 85 meetings for my calendar in the next 12 months. Meetings or calls. With Time Commitment per week per month what would you get as a good estimate . There were big blocks of time last year when i was working fundamentally fulltime, because i was working to recruit and a ceo. Many of you and your colleagues asked charlie why would you accept such a difficult job . I would like to be the guy that was recruiting. It was time intensive havent kept track of it on a per hour basis. I was absolutely, many times working fundamentally fulltime. Out of the course of your tenure on the board, on average, 2030 hours a week, 15 hours a week . Probably not 2030 kind of range. Since i became chairman i have been available to the company fulltime. I dont make other commitments. I was my next question. What other jobs are positions do you hold outside of or did you hold outside of the border . I was chairman of the board has come corporation the only other Public Company where i am on the board. Did you have or i do not. I appreciate that. Im very confused and i dont understand why were hearing this holding this hearing today. You resigned. There is nothing either if you can do at this point to help right the ship that is wells fargo. Whats going on with the world today in the financial system, to some degree it is humiliating to the former members of wells fargo right now. I dont know that this is the best. Appreciate you all sitting through it im not sure i would have. Im not excusing its abundantly clear that the majority and minority report a lot when wrong and several missteps were made which the obama registration led to a disastrous result for youre making us customers. But i still dont understand what dragging you to today is accomplishing. I think its good that you resign and think it was the right decision given the circumstances. It is very unfortunate. Im encouraged by your new ceo. His testimony yesterday was productive, i think. I hope that wells fargo can get back on the right track and i know this committee will continue to keep a close watch along with the regulators. Help regain the trust of the customers of this committee and the american public. Yeah i just, thank you for coming here. I yield back. Gentleman from illinois mr. Garcias recognized for five minutes. Thank you for convening this hearing and the two witnesses thank you as well. Regulators have been working on wells fargo since 2016 to bring the bank into compliance. When the banks current troubles first came to light. The testimony that each submitted to the committee, since that time the board of directors have focused on changing the culture that of wells fargo, but there is an important change i think that you have left out. This week the rules will Institute Published a 2016 to 2019, wells fargo more than doubled the money it put towards dividend and stockpile from 12. 5 billion to 30. 2 billion. Mistook, mr. Quickly. Did you vote in favor of these dividends . We voted in favor of the capital plan that included that yes. Mr. Mr. Duke and mr. Quickly esther know did you and the rest of the board decide to more resources toward share buybacks and dividends to boost the Company Share price . The capital plan is very clear and all the elements and it and thats a yes. Yes we did approve the capital plan. Both of you . Yes. Thank you so you decided to use more money to pay off shareholders. The majority staffers report found that wells fargos board and management prioritized financial and other considerations about fixing the issues identified by regulators the fact that wells fargos doubled the money spent paying off shareholders during this time is a clear example of that. As you can mister quickly yes or no. Do you agree that wells fargo could have used those billions to invest in its workforce which may have internal culture . I would say that we have approved considerable expenses in order to fix the issues that we need to fix that wells fargo we have not limited those budgets. Mr. s quickly. The number one priority is absolutely remediating those issues and that was made clear by mr. Sharp yesterday. And having done differently could have advanced cleaning up of the culture. Last year i introduced the work ethic age are 33 65 a deal that ban shared by facts and allowed Company Employees to directly elect one third of their corporate board. I think it is fair to expect companies to invest in their people and and growth rather than simply lining shareholders and packets and third 2013 first learn from the Los Angeles Times about wells fargos fake accounts and pressure tactics that told employees to open them. The committee for better banks and group for better conditions help bring these practices to light and wells fargo was funded fined by by firing thousands of frontline employees. Miss duke industry quickly was firing the employees the correct response to the Management Issues at the bank . It was further action needed to be taken. The managers at the banks however, whenever an employee is found to have engaged in this honest acts against the customer we have no choice but to terminate. Mr. Quickly. The same. The culture of the company and accountability and accompany always starts at the top. Yes or no, would you agree . Yes. Yes. And Board Members both their responsibility for what went on at wells fargo when you are at the path your testimony expresses regrets about what happened to the workers but here we are. Workers to the bags practices and you got fired you both resigned perhaps to absolve yourselves of what happened on your watch. Do you think it might be a better idea to let employees and let corporate work members for themselves . Im sorry i did not understand your question. Do you think it might be a better idea to let employees select corporate Board Members to be represented . I believe in the corporate governments model that shareholders elected directors. I agree. With mr. Quickly. So it is clear you are consistent in. That madam chair i yield the rest of my time. Thank you. The gentleman from texas mr. Taylor is recognized for five minutes. Thank you madam chair. I appreciate im served for. 12 years that in texas, and i will say that where you are today its somewhere where i think not a Single Member of the bank board would ever want to be. I was wondering. I find some of the actions that were taking place at wells fargo to be criminal in nature. I certainly agree. With you madam chair and some of my colleagues that due to the criminal nature i am surprised that no one has been prosecuted and i certainly would agree with bringing in the u. S. Attorney for the jurisdiction to ask because i think there is an example to be made here. This is unacceptable behavior and it is criminal. I think we should agree that that it is criminal and there should be some discussion with the people that didnt get prosecuted. What a heck its not up to these. Guys were not on the bench i think its worth asking that question who do you have any lessons learned. That you would tell to the 5500 banks of the united states. People on bank boards across this country, for banks large and small. I hope you dont stop here, i know this is an unpleasant thing but i think you have something to teach other bank members about how to run a bank. Youve been through one of the most difficult problems that a bank has been through in the last decade. What do you have to teach . What would you say to other bank Board Members or other perspective thank Board Members what you would do and the situation. What lessons have you learned . Mr. Quickly . Theres no question that the communications with regulators who have a significant presence inside these Enterprises Need to be robust and timely. You also need to be aggressive in terms of followup. When it comes to determining that, there is a need for a change to happen in the culture. You need to be assertive to make sure that occurs. It might mean that you need to make a substantial changes in the Leadership Team including at the top. I acknowledge in my six years at the bank, ive worked for for ceos. Quickly to go into that. Theres something i want to ask about is your relationship with them. My 12 years on the bank board, those were the only interactions i had with the regulator. I never got a call or email from a bank regulator. Youre earlier testimony said saying that you are talking almost daily to them surprised me. Was that typical prior to problems . What was your interaction what led to two almost daily interactions with regulators . That period of time, i was chairing the ceo search committee. So i was interacting with them on a regular basis because of the requirement for me to be able to obtain a supervise ring for the individual i was recommending. Prior to the sales practices issue being made public and for the board to be informed and aware, i think a quarterly kind of touch wouldve been much more to what i would have been expected. With the issues we were dealing with and the aggressive approach to remediation, that interaction with the regulators is something that became much more frequent and have much greater substance. What was the Standard Practice . I would suppose this to be for all banks of your size, for regulator board interaction. My experience was every 18 months, have a meeting and thats it. U. S. Clearly was very different. If i could. My career was as a Community Banker. My board did not interact with the regulators. In the Community Bank they did not even come in for the annual review of the annual activities when there was a close out conference with the regulators. I think my Audit Committee would come in with examiners but they did not meet with the board. When i joined the board at wells fargo for the first few years, the regulators would come in and present annually their reports of their examinations. But that was the extent of the contact. The other piece was that each of the Consent Orders that we had had a requirement for it can, Oversight Committee of the board. Soon after i got their, they asked me to serve on the committee and then later chair it. That then evolved the reporting that was on the Consent Orders. So i had regular contact with the examiners about those Consent Orders and the progress on those orders. Thank you i yield back. Thank you the gentlewoman from new york, mrs. Murrow knee is recognized for five minutes. Thank the chair lady for yielding. Mister quickly i want to ask you and email exchange you had with the former ceo of wells fargo, alan parker. That is in appendix three of our Committee Staff report. You and mr. Parker were discussing a series of conversations that he had with a political appointee at the cfpb, eric blank and steam about resolving the banks regulatory issues with the bureau. Let me read what mr. Parker wrote to you on may 17th, 2019. He said and i quote, eric also assured me there there would continue to be political oversight of the engagement with us and quote. Mister quickly are you familiar with this email . Yes or no . Yes. Okay. What did you think mr. Parker meant by political oversight of the relationship with wells fargo . Did you understand that he meant mr. Blanketing was promising a softball approach to wells fargo . I did not interpret it that way nor do i think that is in fact what occurred. Then what do you think occurred. . A you think its appropriate for a political appointee and this cfpb to promise a bank softer treatment then your career staff is recommending . Do you understand that that provides an appearance of possible corruption . Let me provide a little bit of context in terms of my meetings with mr. Blank and steam. He came to the board in july of i believe it was 2018. Or it might have been 17, im not sure which year. But he spoke on behalf of the cfpb at the Board Meeting in july. I started trying to have a quarterly touch with him when i was in washington. Each of those meetings, i was accompanied by someone from wells fargo and he was accompanied from others by others from the bureau. Let me ask you a different question. Do you think it is appropriate for a political appointee that cfpb to come to a meeting with the bank and promise the bank softer treatment then the career staff is recommending . No i do not think it is appropriate and im not even sure that it occurred. Well what do you think he meant when he said that he would continue quote political oversight of the engagement . I think he was talking about his departure from the cfpb and that his successor who was going to be a political appointee might have continued touch with the bank. It does not read that way to me. I have no further questions. I would like to thank our witnesses for their testimony today. Without objections all members will have five legislative days within which to submit additional written questions to the witnesses or chair which will be forwarded to the witnesses for their response. Iran will again give you an opportunity to question the witnesses started into the close, we will go forward. Thank you mister chair i really appreciate it. The accommodation. I wanted to ask mr. Quickly and miss duke about your compensation. 600 630,000. Dollars 417,000. How many times last year that the board convene in person . Borden person im, im guessing perhaps 12. I had probably 90 meetings in relation to my Committee Meetings the full bore . I was working fulltime. What about the other companies youve been upward of where youre not working fulltime for them . Not fulltime no. If you were working fulltime with wells fargo the questions when i was doing the ceo searches require my involvement every single day that is the point i was trying to make. My question is about your thoughts as long term fort members that wells fargo about the remaining board. Because there are folks that are sitting on the board today i have their files here. These are folks that data breaches, staples, Health Markets scandals, collects, hundred and tell hundred and 10 million a target, the auditor for a ig, these are not exactly equal scouts. What is your opinion about the current, the capacity of the current board regarding the number of them that have come from consumer situations to steal wells fargo direction Going Forward . I have confidence in the capability and the integrity of the members of the board that i won served with. Miss duke . I do. I think the expertise of those directors as excellent as we populated our board reconstituted our board, weve added a number of new directors. When i joined the board i was the only director on the board with Banking Experience there are no even without me, i believe, four directors who have Banking Experience. Is the board actively seeking replacements for you too . In the past and changing Board Members, as wells fargo seeking people who were cited over Major Corporate scandals or is that just a coincidence . Is it a qualification needs to be on the worlds wells fargo board . That is not actively seeking, however i would say that particularly in the case executive at kelloggs, that her experience in dealing with and remediating that crisis and also as a public policy, her experience in that situation has been invaluable tomorrow board. Do you think that the compensation of Board Members is in line with the number of hours that they work . It is in line with the level of responsibility that they taken and with the compensation for other directors of similar institutions. Lets talk about their responsibility. What are the consequences or punt personal responsibilities that you were mr. Quickly have suffered as a result of presiding over the board during the scandals . We are subject to liability for actions director. As well as marco have directors and officers recovering claims . They have directors and officers liabilities insurance covering. This so you both getting half 1 Million Dollars a year, what are the responsibilities for which deserves such tremendous conversations. What are the risks as a result of asserting serving on the board . Board role is to oversee the Companies Management and business strategies, to evaluate the performance of its ceo, to monitor the performance of that ceo and to work through the Succession Plan and selection of the ceo, by the way was the point i was trying to make earlier i was working on fulltime. Id like to thank the witnesses for their testimonies today. Without objection, and which to submit additional written questions for the witnesses which will be reported to the witnesses for their response. I ask witnesses to please respond without objection, all members will have five legislative days in which to submit to the chair for inclusion in the record. This hearing is adjourned
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