While Wells Fargo (NYSE:WFC) has made progress in its mission to improve its risk controls, "we know we still have much more work to do," work that will take "several years" to accomplish, Wells Fargo CEO and President Charlie Scharf will tell the House of Representatives Committee on Financial Services on Thursday, according to his prepared testimony.
"We have outstanding litigation, regulatory matters, and customer remediations to resolve, and until our broad book of risk, control and regulatory work is complete, we remain at risk for setbacks," Scharf will say.
Recall that Scharf took over as CEO of Wells Fargo (WFC) in October 2019, to transform the bank after a string of scandals including employees creating millions of bogus accounts to meet their sales goals.
He will emphasize that the "enhancement and implementation of an appropriate risk and control" across Wells Fargo (WFC) is the company's "number one priority," and "we are moving forward to fulfill our obligations."
The board and the company's operating committee have been transformed since 2019, with 77% of board member new since then and 11 of 16 operating committee members new since Scharf started at WFC, he will point out.
A number of milestones it has already reached include:
- The January 2021 termination of a 2015 consent order by the Office of the Comptroller of the Currency related to the bank's Bank Secrecy Act/Anti-Money Laundering compliance program;
- September 2021 expiration of a Consumer Financial Protection Bureau consent order issued in 2016 regarding WFC's retail sales practices;
- OCC's December 2021 termination of a consent order issued in June 2015 regarding add-on products that the bank sold to retail banking customers before 2015; and
- January 2020 expiration of a CFPB consent order issued in January 2015 regarding claims that the bank violated the Real Estate Settlement Procedures Act.
He will acknowledge that Wells Fargo (WFC) has been too slow in addressing some legacy issues. For example, in September 2021 the OCC assessed a $250M fine and imposed a new consent order related to loss mitigation activities in its Home Lending Business and insufficient progress under a consent order the agency issued in 2018.
"We know what work needs to be done, and we are committed to completing it," he will say.
Among the sanctions still on Wells Fargo is a $1.95T asset cap imposed by the Federal Reserve.
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