[inaudible conversations] [inaudible conversations] [inaudible conversations] the committee will come to order. The gentleman from illinois mr. Foster is recognized for five minutes. Thank you, madam chairman. Mr. Scharf, iraq with the concerns my colleagues on this committee about the extensive shortcomings of west fargo over a number of years past and do hope you are as committed and as successful in turning your dash as you stated in your testimony. Id like to bring up the issue of dreamers. This is ang issue that hits cle to home. Last summer a dreamer from illinois filed suit because he was wrongfully denied an auto loan because of his daca status. I was glad to see some of the changes that wells fargo has decided to implement recently including its plan to provide Daca Recipients with credit products, education loans and mortgages. I cannot emphasize enough how important this commitment is and hope you worked work diligentlo implement this new policy. Because this release is one thing, at the end of the day a new policy that does not achieve results in the form of actual loans to actual Daca Recipients can mean its been a fairly. Can we have your assurance you will track progress on this issue and you will report periodically back to us on progress on providing credit to dreamers . Absolutely track the progress and we can certainly talk to but how we should report back to you. Thank you. I appreciate that. Il its important issue to my constituents. Now, as youre no doubt aware, Banks Committee reinvestment act exam rates and finance are disclosed to the public after i believe a delay of a couple of years. One measure we are contemplating would be to require banks to disclose their consumer compliance rating and findings in the same way. Would you agree this would be an effective method to limit consumer abuses . Congressman, we certainly agree and accountability and ensuring that the regulators understand and have access to all information they need to draw this conclusion. The public also has indeed to understand which banks deal properly with their consumers and which have a different record. Respectfully, thats a decision, discussion between you and the regulators. A discussion between you and the regulators. Okay. So you do not have an opinion on whether or not it would be a good idea so you are opposed to it . Honestly given the condition and the work we have to do, its really not up to me, im not the best person to give advice. Im focused on doing the work. Youre also the process of repairing an organization where some of the incentives were wrong and some of the results were wrong so you must have an opinion on what this sort of thing, a little bit of public visibility towards findings that have shown and abuse of the consumer might be an incentive that might improve behavior in the past and Going Forward. Congressman i believe like any other issue there are places and minuses to this. I think that its really appropriate for you in the regulators to talk about what those are. So will handle this without your input i guess. Incentives in my mind art to the heart of getting corporate behavior right. I was happy to hear you made some changes there. One of the pieces of legislation that is being considered in this hearing does a number of things. One is which to put the bonus executive pool in a loss position for any regulatory fines or penalties. While i have lots of questions about the details, mechanisms and formulas involved in this piece of legislation. I wonder if you have a reaction to how effective this might be in preventing future and getting attention by top management towards consumer abuses. Congressman what i think we have to do and will drive accountability within the organization is a sure make sure we judge people and accountability and what we pay people. That is what we are doing today. Thats what i guess is my next question. Im getting you to answer for the record because there will be some detailed numbers. Could you answer for the record, how the financial burden for regulatory fines go over the top 20 finds that happened over the last decade. Describe how they economic pain for those pains was distributed among shareholders and top executives and everyone else who might have absorbed the pain . Both as they occurred in the last decade and how they would occur with the Current System that you now have in place. Congressman i can tell you that the finds that weve incurred over the past year when i was at the company have been impacted peoples compensation directly. I want to see a number of table of numbers and percentages to see what share, falls upon shareholders. The gentleman from tennessee is recognized for five minutes. Thank you madam chair, thank you Mister Scharf preparing today. Ive heard a number of people ask you why you take the job that youve taken and i frankly appreciate you stepping into the role. With that said, today how would you characterize the reputation and the brand of wells fargo. . Today as we sit . I think as we sit here today, we have not yet returned the trust that we would like an wells fargo name to represent. Your opinion is the brand and reputation of wells fargo irreparably damaged . I do think the brand and reputation is extraordinarily important in this business and that we have to work to earn it and that we can do that. You can restore it . The welsh forego can restore its brand and reputation . I absolutely believe we can restore the brand and reputation of wells fargo to by taking the actions ive taken in my short time at the company. In my district, you have a number of retail institutions, you have a number of branches. If the customers, an hourly wage employee, a Small Business person, a professional, and they come in and want to do business with wells fargo. In laymans terms, how would you instruct your bank officer, Customer Service representative, whoever is greeting them to get that business or maintain that business . What would you tell your employee to relate to this hourly wage employee, to the Small Business owner, whos trying to take out a mortgage. Why should they want to do business with wells fargo . Congressman i think we should treat our customers and our employees the way we would want to be treated. And so to the extent that we are thinking about their needs and what is right for them and how the things that we can do can be there to serve it them. That is the way we want everyone who works for wells fargo to be thinking about when dealing with their customers who walk through the door. If we are not doing that, i genuinely believe we will not be successful. Weve clearly not done that historically at all times. And weve seen the results of that. And so that has something which needs to be built into the culture of the company. The compensation of the company. The management of the company. In a very different way than it has been in the past. Let me ask it in a different way. What would that bank officer tell that customer whos trying to maintain or obtain . What would they tell them about wells fargo and why they should want to do business with them considering everything that that customer or potential customer has seen or read about in the media . Congressman i think that we want our customers to know that we are committed to doing the right thing for them. All the actions that were taken since ive been at the company, it is directed towards that. Ultimately that is whats going to turn back the trust of the people who stand in judgment of us. It is not just our customers, the communities we serve, regulators and shareholders and legislators. So if we are not doing the right things for our customers every single day, then we are going to fall short of who we should be. Im the Bank Customer i say, im thinking about cutting my relations with wells fargo because of everything that ive heard about, read about that has been going on for several years. Mr. Wells fargo, miss wells fargo, why do i stays are customer . In limits terms what would that person say to them . The number one reason they would say is they love the people they do business with who work at wells fargo. The personal relationships that they have developed our extraordinary. I was in a branch yesterday in washington and we asked that very question. Why do your customers come in . It is because of that personal connection. Then its because they believe that what we do is great for them. Our products, our services, our convenience, our technology, but ultimately it has to have this rapper of whats were going to do whats right by them. Thank you mr. Sharp, my time is expiring, i yield back. Mr. The gentleman from massachusetts mr. Pressley is recognized for five minutes. Thank you. I want to recognize the diligent and good work of this committee. In 2018, large banks posted record profits that were only topped by their profits in 2019. A decade ago, the same things banks were rescued by trillions in bailout loans. It does seem in the case of banking, your profits are private while your losses are socialized. Over the years, youve helped lead city group, jpmorgan chase, b and why mellon and now wells fargo. Four of the nine recipients of the original round of rescue funds. Mister sheriff this is your second time appearing in for the committee in less than a year. Given that this report shows the limits of traditional Confidential Bank supervision in effectively curbing wells fargos egregious behavior, do you agree that the public has a right to hear from you directly . Your annual testimony through annual testimony and reporting . Congresswoman, when i took this job i understood that this is part of what the job is. What the corporate frequencies. I will leave it to you to make that determination. It is a reasonable ask, its a yes or no just for the record. Congressman congresswoman, im not the person to as i question to im focused on wells fargo right now. And yes or no do you agree that its fair that you should come annually, and report. Congresswoman, i do believe that its appropriate for me to come, when asked to come by the committee. So congress establish your national charter, it created the deposit insurance your bank enjoys, congress stood up to their federal serve, to be a last resort, and congress developed a Legal Framework that governs your bank, so an annual check in, is not too much to ask. And that is exactly why, with the support of the aflcio, i introduced the greater supervision in banking act. Requiring annual public testimony, of ceos like yourself, and reporting about bank size, diversity any regulatory enforcement or fines and notably the workforces treatment that all levels. Your contract with wells, specifically states he will not require, to relocate allowing you to work remotely. However, while there, you pushed employees to tell commute. Just for a question time, would you institute these policies at wells. First of all congressman i do not tell us commute. Thats a very important decision distinction. Its a National Color country and National Company with places all over the nation. Have you instituted any restrictive policies at wells. Congressman, i have not planted any restrictive policies at wells. In the midst of this global pandemic, will you allow all employees who work remotely or can work remotely to do so. Yes or no. Yes. Do you commit to providing all workers down to custodial staff, call center employees, thirdparty contractors, with necessary sick days as well as paid leave . Yes or no . I need to think about that whole list of people, but for employees yes we will do that. All employees . Down to custodial staff. I did not say thirdparty workers. No i did. I said we certainly would be willing to look at the rest, it is not something i thought of sitting here. I hope you will get deep thought, because they do represent our most vulnerable workforce. Want to be clear being a chartered bank and one of the largest at that is a privilege, its not a right, its a privilege that comes with accountability to this congress, to the employees and american public, when all americans not just those that are wells customers serve, at least you can do is show up once a year to answer these questions thoughtfully thank you and i yield. The gentleman from ohio mr. Gonzales is recognized for five minutes. Thank you mr. Sharp for your testimony. When i look at the report i book at things in three places, one compliance, two reporting, and three board of director issues. I want to try to hit on all three of these. On the compliance side you have talked about how you flatten the organization no longer the federated structure part of the federated structure was Risk Management. It was embedded in the each of the business units. We have elevated the management sort of pulled it away to monitor it more broadly. We have to have independent Risk Management, we have pleaded that with the company we are continuing to build that, and all of the appropriate first line functions. As to make that second line function as effective as it can be. Another issue was mentioned, Risk Management, component i realize it looks different at each bank, but how are we progressing on that specifically . We are continuing to work to make sure that everyone in the company understands what responsibility is, the only way that we can have an effective Risk Management infrastructure across the company, is that there is consistency of application consistent level of understanding, and limitation. That takes sometimes and thats what were working through. On the reporting side again it was clear that the board felt or had all kinds of faults, but they felt at times they werent getting the right information or they were being misled. Obviously they do not prepare the reports, its the reports that management provides them. How confident are you that the reporting issues, the accuracy the frequency etc, has been taking care of Going Forward. I certainly think that congressman the quality of the reports we give them, has to continue to improve, i think that is an ongoing task that we have to make sure we do our very best at. Board members generally can be often as good as the quality of the materials we give them. And so that is an ongoing effort. That is underway and has to continue to improve on that. Thank. You in respect to the board, i want to ask a general question because will have two former members of the reward here tomorrow, and i think that sets an interesting precedent, i hope doesnt become routine that were hauling in Board Members of companies now, your situation is unique i hope in fact this is unique. High level, what is the role of abortive director in a public company. The boards responsibilities to oversee management, to prove strategy, and certainly in our case to have the confidence in the regulatory work that is ongoing. Not to run the bank . Actually no i believe the Management Team is running the bank and overseen by the board. Thank you. How important is it for you to have proprietary conversations with your board . Congressman i think its extremely important, i personally believe that the best way to help the Board Members do their job, and for the company, to get what it can out of every single board member, is to be as open and honest as you possibly can. Think very very early on, about having conversations with them, so they can be brought in early, and doing that, in a confidential way, i think is critical. And i think, im sort of caught in two minds here, if i were shareholder of wills, i would be happy with the outcome of your Board Members, as a member of congress, again i worry that we are going to set a precedent where we haul Board Members in with every company that is not doing things the way we want, i think that sets a dangerous precedent, i think we did it with and ron awhile back, i think its a unique situation and what it feels appropriate, i want to switch or something and we get through it, do you have any immediate plans to run for congress . No i do not congressman. Good job. Do you seek to become a legislator at any point . No i dont congressman. Do you like running your bank . Do you like running banks . Congressman i am very proud proud and i do enjoy running the bank. So i would encourage you to run your bank. Running your Bank According to the laws of this country. We are the legislators. I dont want to run your bank, i dont think you want any of us running your bank. I dont think you want to us who to do business with, what to do, how to operate, all those sorts of things. You run the bank consistent with the Consent Orders and the laws of this country, we will create the laws, its a beautiful system. If we start making it up by telling you who you can and cannot do business with, i think we set a terrible precedent. With that i yield back. The gentlewoman from iowa, we miss actually is recognized for five minutes. Thank you chairwoman and thank you Mister Scharf for being here today. Most of my colleagues have addressed these issues so i wont rehash them. What everything ive been hearing so far sounds like things are improving and i hope that continues because i think all of us here expect more from wells fargo. My interest and wells fargo in doing better is but you employ almost 1500 people in my district so thank you for that. We have a vested interest that wells fargo is a Successful Bank to keep those jobs. Can you give me some assurances that fixing the previous problems will be your top priority and that you are going to work to ensure that any future plans are not creating the kinds of risks that were so poorly monitored before. Congresswoman, theres no question in my mind, in our boards mind. I dont think theres a question in the minds of wells fargo employees that our number one priority is to fix these issues. Ive said it internally, written it internally multiple times. Ive talked about it on our Quarterly Earnings call. They have called for specifics in terms of strategy and growth and ive said i am not in a position to give you information about that. Im focused on fixing these issues that we have which are the regulatory problems and the underlying infr