Wells Fargo, Equifax Officials Left To Answer Tough Questions From Lawmakers

Oct 3, 2017
Originally published on October 3, 2017 6:19 pm
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On Capitol Hill today, lawmakers laid into top executives from two scandal-plagued companies. They told Wells Fargo's CEO that he was failing and not doing enough to reform his bank. And the former head of Equifax got a similar grilling. NPR's Chris Arnold reports.

CHRIS ARNOLD, BYLINE: In both the Equifax and the Wells Fargo debacles, millions of Americans got hurt while executives at the top of these companies made tens of millions of dollars. That wasn't sitting well with Senator Elizabeth Warren today as she faced Wells Fargo CEO Tim Sloan.

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ELIZABETH WARREN: So it looks like you had a really good thing going. Talk up Wells Fargo's ability to open new accounts. Get investors excited. And hey, if the stock goes up by a dollar, you make a cool 2 million bucks.

ARNOLD: Sloan was brought in to replace the old CEO who stepped down after it was revealed that the bank had signed up millions of customers for accounts and credit cards that they didn't want. So Sloan is supposed to be the reformer. But Senator Warren said that Sloan worked at the bank for 30 years and that he denied there was anything wrong until the scandal broke.

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WARREN: You knew there was a problem, and when you were asked about it, you lied. This is about personal responsibility. Wells Fargo cheated millions of people for years. You enabled this fake account scam. You got rich off it, and then you tried to cover it up. At best, you were incompetent. At worst, you were complicit. And either way, you should be fired.

ARNOLD: Tim Sloan responded.

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TIM SLOAN: I have made mistakes. I certainly haven't been perfect. But I think having that knowledge of the company, having the ability to make the change - the actions that I've taken since I'VE become CEO 11 months ago have made fundamental change at this company.

ARNOLD: Sloan has made some changes. But news of more wrongdoing just keeps coming. Over the summer, the bank admitted that it signed up half a million customers for auto insurance that they didn't need. And it wasn't just Democrats today who were landing verbal blows. Republican John Kennedy of Louisiana...

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JOHN KENNEDY: I'm certainly not anti-business. But what I'm curious about is, what in God's name were you thinking? I'm happy when businesses are successful. I'm not against big. With all due respect, I'm against dumb.

ARNOLD: In another hearing room at exactly the same time, another top executive was in the hot seat. Richard Smith, the former CEO of Equifax, was trying to explain the recent massive hack.

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RICHARD SMITH: The database was attacked by criminals. That we know.

ARNOLD: Smith resigned last week. Today he admitted that after a security problem was identified, the company didn't do anything to fix it for two months, and that allowed the hackers to break in, which led to this question from Republican Greg Walden of Oregon.

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GREG WALDEN: How does this happen when so much is at stake? I don't think we can pass a law that - excuse me for saying this - but fixes stupid. I can't fix stupid, as a colleague of mine used to say.

ARNOLD: The hackers got Social Security numbers, names, addresses and a lot more. And the breach affected more than 140 million Americans, nearly half the U.S. population, as one lawmaker noted. Congresswoman Jan Schakowsky had questions about just how much money Richard Smith will be getting paid.

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JAN SCHAKOWSKY: It's been reported that you will still retain $18 million in pension benefits from Equifax. Is that accurate?

SMITH: That is correct.

SCHAKOWSKY: Retiring also means you'll be free to sell your Equifax stock, which is worth about $24 million. Is that correct?

SMITH: That may be an estimate. I've seen different estimates.

SCHAKOWSKY: And that's in addition to Equifax stock you sold earlier this year for $19 million. Is that correct?

SMITH: That sounds correct.

ARNOLD: It's unclear whether Equifax will reduce or claw back any of that compensation. Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.