of ethics? do you realize that you have not only given -- will you admit this? that not only your bank has a black eye, that your bank, wells fargo, has given the entire financial service industry a black eye, your responsibility? you heard mr. sherman. he wants -- and i agree with him. he wants everybody to come in here. why? there's only one reason why. your bank, you, c.e.o., chairman, basically for me was on top of what's basically been a criminal enterprise because when i look at consistency, time after time after time and time again, you have to get fines. now, it must mean you're making a lot of money because it's easier to pay the fine because you know something else will happen to you. you pay the fine. you get away. i'm from new york. a lot of times i believe in financial institutions. that's why i'm so mad. i believe they make our country better. until they rip us off. and they ripped us off, taking

advantage of customers and consumers when we had the financial crisis. i have individuals right now who are on the street, on the street, not back in their homes. they had these fraudulent mortgages. nobody said, i'm sorry that we gave you these fraudulent mortgages. we're going to put you back in your home and we're going to make sure that everything is ok. no one has done that for them. you haven't volunteered to do that. will wells fargo put people back in their homes? mr. stumpf: congressman, if i could respond for a second, please. there's no question we don't do everything right and we made mistakes. we're upping our game. mr. meeks: so who should pay for it? who is accountable for it? mr. stumpf: we are going to make it right for every one of our customers. mr. meeks: your institution is make over $22 billion yearly. who is paying for it? who's taking responsibility for it? don't come tell me you're sorry mr. stumpf: we're taking care -- every one of our customers who is impacted. mr. hensarling: the time of the

gentleman has expired. the chair recognizes the gentleman from wisconsin, mr. duffy, chairman of the oversight and investigations subcommittee. mr. duffy: good morning, mr. stumpf. i want to tell you i'm a 20-year customer of wells fargo. i started out at nor west. my wife and i joined accounts. i benefit from your bank. your people treated me incredibly well. that's why i'm there. what i'm hearing today is incredibly disturbing. i want to make sure you and i are on the same page. how do you classify what wells fargo did with this potentially two million account holders? mr. stumpf: well, the two million account holders were accounts, was about -- the p.w.c. looked at 93 million accounts, the two million -- sorry. mr. duffy: was this fraud? was this an h.r. person, theft, how do you see this? mr. stumpf: the two million accounts could not be ruled out --

mr. duffy: i'm asking how do you classify when you took $22 to $25, from whatever the number is, maybe it's one million, maybe it's two million, how do you classify that? mr. stumpf: i think it was dishonest, it broke our code of ethics and the people who are responsible -- mr. duffy: was it theft? did you steal? mr. stumpf: our people did not do what was right. mr. duffy: that's not my question. did you steal? i want to know if you and i are on the same page. did wells fargo employees steal from a million to two million other customers, yes or no? mr. stumpf: in some cases they did. mr. duffy: they did. mr. stumpf: yes. mr. duffy: so as wells fargo back to 2011 is stealing from their customers and by the way, banking is based on trust -- mr. stumpf: correct. mr. duffy: i don't care if it's 10% or 1% or half a percent of the people you do business with, if you're stealing from them, in 2011, 1,000 people are fired for stealing, and what do you do?

you don't fix the problem. and 1,000 people are fired in 2012 and you don't fix the problem. and in 2013, 1,200 people are fired and we still have a problem. and you're stealing from people. so how do you -- listen. i guarantee you that any bank in my community, if they were stealing from someone at the lower level, fired and fixed the problem on day one. mr. stumpf: that's what we're trying to do. mr. duffy: no. trying to do, we're five years on. mr. stumpf: let me say as we -- this problem, we didn't -- when somebody would open an unauthorized account, a savings account or checking account, it was not until -- and when an account gets opened and not funded, it's really important, please. when they open and not funded, it gets auto closed. we didn't believe, as we looked

at that, until some time in 2015 that there could be the possibility of a zero account that could affect a customer. mr. duffy: you got to be kidding me. you have got to be kidding me. mr. stumpf: that is absolutely -- mr. duffy: you are not saying you but board members knew in 2011. they were looking at this. and if they are looking at a thousand people fired that they don't know why they're being fired, that they don't look saying, what were these people doing that caused them to be canned and they pull the curtain back a little bit and say, man, whether you want to call it defrauding our customers or stealing from our customers, wells fargo has a big problem. so you tell me it took one year, two years, three years to 2015, i don't buy it. what i think was wells fargo was making a lot of money off what you were doing and i think you were hoping you wouldn't get caught. and so it's a risk of doing business. you know what, we're willing to fire a few people so i can come in here and say, weren't we great? we fired a couple of people. we were trying to make it right.

but we kept the practice in play because we were making big profits. did you win the practice? is this over? mr. stumpf: we're stopping all of our sales. let me -- mr. duffy: how could you stop it now but not in 2011 or 2012 or 2013 or 2014 or 2015? mr. stumpf: we should have done this earlier. it's important i make this point, please. the $2.6 million of fees that were on accounts that these two million accounts that we could not rule out, it cost us $10 million to open those accounts and close them. forget even the cost of the team member and the dismissal, this is a loser for us. it only helps when customers uses it. mr. duffy: it's a loser. mr. stumpf: it only helps when customers -- i would require they -- mr. duffy: the concern we have -- i told you i like wells fargo. i've been there 20 years. that you were turning a blind eye to your customers who were being stolen from, people who couldn't afford $24, people who

couldn't afford $25, you couldn't fix that problem. in an institution that's based on trust, you didn't remedy it, that it's taken this long, shame on wells fargo. i would hopefully at one point hear you testify to how many cfpb employees were embedded at wells fargo. >> the time of the gentleman has expired. the chair recognizes the gentleman from massachusetts, mr. capuano. mr. capuano: thank you, mr. chairman. thank you, mr. stumpf. i want to thank you, particularly, for doing something here today that no one other person has been able to do in the last four years. they have brought true bipartisanship to congress. we're all together on this. we are not happy. last -- they already started. but the last few minutes they have been running a graphic in the back and my colleague went through some of them.

i think it's important to know what some of the other things you have done. what they were. they weren't just fines. you screwed student loan holders. credit unions. fannie mae. freddie mac. mortgage holders. african-americans. hispanics. health care workers. on and on and on. and by the way, i understand this isn't material. just five months ago, you paid $1.2 billion in a fine. this is only 15% of that. who cares? we'll pretend to be sorry. we'll fire some workers and we'll get through this. you know when i heard that before? the guys who ran enron. the guys who ran arthur anderson. said the same thing. we're not your problem.

we can't criminally prosecute you. you can keep -- hell. you're your own boss. you're the c.e.o. and the chairman. hold yourself to accountability. oh, my god, you've been bad. oh, no, you haven't. that's ridiculous. your problem is coming. it's not today. you think today's tough. it's coming when the prosecutors get a hold of you, you're going to have a lot of fun. so i want to thank you for that. i want to ask you, you got the graphic up here. you know this guy? see, i'm not a real good researcher. i'm not a prosecutor. this is simple internet research. that's all i'm capable of doing. google it. wells fargo, boom. whole bunch of stuff shows up. this is mr. robert holmes who apparently robbed your bank in

lancaster, pennsylvania. he did not use a weapon. he got caught. they got all the money back. he's in jail as we speak on a $750,000 bail. you on the other hand have run an enterprise that has a culture of corruption. you encourage subordinates who abuse existing customers to open fake bank accounts. you charge them illegal fees, late charges and interest and send some to collection agencies because they didn't pay them. then, you fired 5,300 workers as if you care to cover everybody's tracks. in my opinion, you and your entire leadership team are clearly and unequivocally guilty of at least conspiracy to commit fraud, conspiracy to commit identity theft. clearly racketeering which is something a lot of my friends

know something about. and probably a dozen other crimes. only simple question. what the heck's the difference between you and mr. holmes? why shouldn't you be in jail? he didn't use a gun. you got the money back. i understand at his arraignment he said he was sorry. what's the difference? why shouldn't you be in jail right along with mr. holmes? mr. stumpf: congressman, i think when you do something unethical or dishonest, which i've tried to exercise my duties as leader -- mr. capuano: you have had 16 violations in five years. this is a minor fine. this is only the seventh largest fine that you've had. you have six others that are bigger. that's a good job? you're the one judging yourself because you are also chairman of the board. i actually think i'm the greatest congressman in the history of the world.

i should be speaker, president and maybe emperor of the world. that's my judgment of myself. sound good to you? mr. stumpf: there is no question we need to improve on and we've made fines and we ought to get better. mr. capuano: if mr. holmes pays a little fine, a few bucks based on the amount of money he stole and the victims he had, you think he should be let out and have no criminal record? mr. stumpf: again, being dishonest and breaking the law is something very -- mr. capuano: so it's not breaking the law stealing my identity? mr. stumpf: our culture is not that. we train for that not to happen. mr. capuano: 5,300 -- mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from california, mr. royce, chairman of the house foreign affairs committee. mr. royce: thank you, mr. chairman. mr. stumpf, the idea of cross-selling target of at least eight products clearly is part

of a long-term practice at wells fargo. going back at least to your predecessor because in 1998, "fortune" magazine quotes, doubling the average product purchase to eight as your predecessor's, quote, current obsession. you know, morphing a goal to a mandate here seems to be big part of the problem and i say mandate because if people are fired for not hitting that goal, it's a mandate. and that seems to be at the center of a toxic sales culture that you've overseen. but i'd ask you, was the goal of eight cross-sold products something understood and embraced by management and by your sales force? mr. stumpf: it was a rallying cry to help work together. the average consumer household has about 14 financial products. mr. royce: i understand. i'm going to ask you a question.

in retrospect, you think that that target contributed in some way to the negative change in your sales culture? mr. stumpf: we never had a target of eight. again, that was aspirational. we had team members who would work with customers on a need-based selling. when they did that right, the customer won and it was good for us. mr. royce: did you read "the l.a. times" article when it came out in 2013? mr. stumpf: i am not sure. mr. royce: was that something that was discussed at the board level? mr. stumpf: we did discuss the "l.a." article. mr. royce: did information in that article give you pause of cross-selling metrics or ratios in your annual reports and quarterly reports, in the analyst conference calls that were clearly inflated here by fake accounts generated by your sales force? mr. stumpf: we love cross-sell

because it helps define -- mr. royce: look, i understand your argument about that. here's the question. if you know fake accounts are going into that ratio, why would you keep reporting that ratio? because i got a copy of your investor day. i have a copy of what's in your quarterlies. and i turned to mr. duffy when he was asking the question, well, it isn't that material in terms of our bottom line, in terms of the fee income from these fake accounts. but what you're reporting on your products per household is a constant upswing quarter by quarter by quarter. it certainly is material in terms of the stock price. what you were doing and constantly reporting these ever-increasing numbers was driving your stock price up. and the point i'm making is you have this story in 2013 that shows how much of that was based upon fraudulent behavior.

that becomes material, right? mr. stumpf: well, let me just talk about that, specifically. the cross-sell ratio, even if you include all two million accounts in that -- and we know we can't because we're already finding out in credit card that 75% -- less than 25% either did not order or don't remember. we looked back for all the quarters going back to -- i can't remember if it was 2010 or 2011 and it has i think 1/200 impact on the product. it's immaterial. mr. royce: look, mr. stumpf. this is a california company. you have a lot of california customers. you got people all over the people dependent on this company. you have your employees. and from what i understand a thousand of them being fired every year connected to this. i believe rebuilding the trust and righting the wrongs are going to take a course of action here that i have yet to seen you

set. through opening unauthorized accounts or playing the shell game with a person's money, your employees and your company negatively impacted the credit of many people in this country and i just want you to think for a minute about what that meant in terms of their ability, maybe, to qualify to get that home or maybe to qualify to get that car or maybe in terms of the student loan to send that son or daughter to university. not to mention, again, working americans wrongfully terminated by your company for, what? refusing to break financial laws, refusing to break ethical laws. that's what we have to come to grips with here. and this is at the very least the result of actions over the last five years. that didn't happen by accident.

mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from massachusetts, mr. lynch. lynch thank you, mr. chairman. i have -- mr. lynch: thank you, mr. chairman. i have a unanimous consent to submit into the record a letter sent by ranking member cummings, the gentleman from maryland, of the oversight committee to mr. stumpf requesting documents to be submitted by october 13. mr. hensarling: without objection. mr. lynch: thank you, mr. chairman. i'd also like to ask the chairman to consider doing a hearing at a later time with a number of the employees, both whistleblowers who were fired and others who were fired or retaliatory attempts to provide information on the fraudulent conduct being conducted at wells fargo. i'm aware of at least three u.s. attorneys that have also issued

subpoenas in this case. i'm hopeful we may eventually get to the bottom of this. and while the city of l.a., the city attorney there and the cfpb and the o.c.c. have done good work in this case, the findings thus far are pathetic, really, total inadequate to try to bring wells fargo into compliance with the law and that is certainly reinforced by the way, mr. stumpf, you have diminished the offenses going on at your bank. it is really, you know, proof positive that whatever the ocpf -- excuse me -- the o.c.c. has done is not adequate to make you realize the level of your offenses here. again, 5,300 employees were fired. up to two million fraudulent

accounts, and this has gone on for at least five years. and i want to point out here -- and mr. duffy hit on this. this is the banking industry. this actually it exists based on trust and what your employees did, at least -- well, as many as 565,000 fraudulent credit cards were secretly opened by your employees using the social security numbers of your customers. so they opened fake credit cards so they could charge them for that. they assigned fictitious pin numbers when the customer didn't even know that was going on. they put pin numbers. and then they assigned email addresses so they could comply and get the account open and these are your customers.

now, we had credit card companies up here who have sent credit cards to noncredit worthy borrowers and seniors who didn't understand what they were getting. in this case, these are your customers. these are the people that they became victims because they did business with your bank. that is unbelievable. and i know that mr. meeks and mr. capuano before they have made comparisons to criminal activity, but i do want to note that under the racketeer influence and corruption act, you've satisfied that. you've satisfied all the elements of that. two of the predicate offenses under rico, number one, is fraud. and there's no question about that. mail fraud. securities fraud. you've done it all. you covered basically every aspect of fraud in your bank over the last five years. and secondly, in many cases these employees, these whistleblowers were intimidated

or fired in some cases. you got an h.r. employee here who says you have a system to retaliate in your bank against whistleblowers and that's another predicate offense under rico. so let me ask you. as the c.e.o. and chairman of the board, you had a responsibility to file sars, suspicious activity reports. mr. stumpf: correct. mr. lynch: right. you have up to two million separate accounts being opened, up to 565,000 bogus credit cards being opened by your employees in secret against your customers and yet when we ask the treasury department for the suspicious activity reports that you filed, they don't match up. you're not in compliance. mr. stumpf: let me say a couple of things. we filed -- we did everything that was necessary to abide by

every regulator and regulation issued. mr. lynch: you're saying you filed reports on -- mr. stumpf: i can't say on that because that's -- mr. lynch: well, that's your responsibility. let me read you the law. mr. stumpf: i know it's our responsibility. there's actually a prohibition -- i mean, i have to do what's right according to the law. mr. lynch: let me just say. this is my time. reclaiming my time. the board of directors, this is the anti-laundering statute. the board acting through senior management makes sure the bank maintain an effective bank accuracy act, including suspicious activity reporting and monitoring. mr. stumpf: and we do that mr. lynch: it's your responsibility. hens -- mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from oklahoma, mr. lucas. mr. lucas: thank you, mr. chairman. mr. stumpf, while my day job is

that of a congressman, my farmer is by trade and my university degree is in agricultural economics and looking at your resume, about the time you were entering into the banking industry 30-some years ago, i can remember taking a class on money and banking at oklahoma state. and we had a professor who was very enthusiastic about the market economy and we discussed how the banking model we use now went back essentially 500 years to italy and the concept that under a market economy, bankers were the individuals who determined what savings were worth and pooled those and by the same token made risk determinations. figure out what the cost of money should be and allocated that out through loans. a glowing example. and he would compare western europe at the time, north america, much of the rest of the world how affective that was compared to the demand economy

model of the old communist countries at the time. china, russia. all of those sort of places. a very glowing discussion. i don't know that i have a particular question for you about what's going on. i think between the other committee and my colleagues here, they've done an exceptional job of getting the facts and i suspect, as a number of my colleagues have discussed quite straightforwardly, this has legal implications far and beyond the activities of this committee or the other committee in the other body. but i'd say, mr. chairman, the most challenging things you've done, by actions of your company, by management of your company, you have a hard time for those of us who defend the market economy, have a time to

drive this free market system. that's probably the most tragic thing about this. now, in those econs lectures, they used to lecture about enlightened self-interest. that's the nature of any business. that's the nature of any business person. but then there are the responsibilities of good corporate citizenship, about self-restraint, about not pursuing greed. i guess i just simply note to you, sir. whatever ultimately legally comes out of this process -- and clearly a number of my colleagues think it will, or whatever your stock holders determine or fellow board members, you just made it really hard, really hard for those of us who want to maintain that concept of a market economy, who want to continue to make sure

that bankers, not some bureaucrat somewhere, are the arbiters of capital to effectively move this country forward. i don't know how you correct this but i suspect, sir, when you interact with your peers within the industry, you're going to have some challenges for a long time to come. because the brush with which you will be painted will stroke all of them too. and i suspect that's blatantly unfair and that's unfortunate. but then, i'm just a farmer by trade. multigeneration debtor. working hard to service my debts every year. you have to think about that. you have to think about that. what this episode has done to your industry and ultimately to me and all of my fellow consumers out there. it's just very unfortunate. mr. stumpf: may i make a comment? mr. lucas: please. mr. stumpf: thank you. we take this very seriously and

i also come from a farm. i understand what it's like to be on a small farm. at least ours was small with large family. i know right from wrong. i know we have a lot of wrongs to right here. but i also want to tell you that wells fargo is a great corporate citizen. we employ 268,000 wonderful team members across the country. we have a culture based on ethics and doing what's right. not everyone does that. we made mistakes. we're one of the nation's largest taxpayers. we're one of the largest philanthropic organizations. we have a lot of work to do, there's no question about that. but i stand with the people who are doing the right thing, who honor our culture and our ethics. they are terrific people and they're out there with our customers every day. we have work to do. i understand that. mr. lucas: disservice has been done to them. with that, mr. chairman, i yield back. mr. hensarling: the time of the gentleman has expired.

the chair recognizes the gentleman from georgia, mr. scott. mr. scott: yeah, mr. stumpf. this is one of the most outrageous acts that any banking executive has done in my lifetime that i know of. how in the world could you in good conscience set up these fraudulent accounts? what was going through your mind when you were doing this? mr. stumpf: congressman, i didn't set up any of these accounts. i -- our team worked together at the business level then at the corporate level to -- we found these accounts and we found these people and we said, that behavior is not -- mr. scott: mr. stumpf, you took advantage of unsuspecting loyal customers. people in almost every single district that's represented on this financial services committee.

you did that. and you are the chief executive officer. you set the tone and you should be downright ashamed of yourself and you should apologize right now if you have any strain of respect for the people of the united states, for the customers that you have defrauded with this, for the rancid example that you're setting. and not only that. for the damage that yourself with your action has done to the entire banking industry, because you know what, all this cross-selling, now you have caused an extraordinary spotlight to be focused on every

bank in this country. you have done that. and you should apologize. mr. stumpf: congressman, i have said in my opening testimony, i am sorry. i am accountable for this. i'm very sorry that we broke trust with our customers, our communities, the american people. i am deeply sorry for that. i'm going to do everything i can to repair that. mr. scott: and you know what hurts me so much? i'm one of your customers. i have an account at wells fargo in atlanta, georgia. i was on the phone with my district director about this and she has told me that -- and our constituent services, when it comes to the mortgage assistance, particularly with the bill that we passed here, the hardest hit bill, in which we're offering and helping those people with mortgages to be able to pay up to 24 months of free mortgages, and she says, we have

no better cooperation from the staff of banks than we have from wells fargo. mr. stumpf: thank you. mr. scott: i'm your customer. mr. stumpf: thank you. mr. scott: but the example you set is just absolutely terrible. now, what i want to ask you is -- because my number one concern is, my constituents in georgia. let me ask you. could you tell us exactly how many customers in my home state of georgia had fraudulent accounts set up in their name without their consent? how many in georgia? mr. stumpf: i can get that for you if i have the right -- sorry. i know i'm using up your time here. mr. scott: well, maybe the chairman will give me a little extra here but it's important for us to know. mr. stumpf: in georgia we had

55,579 accounts that we could not rule out as possible. again, now, i -- mr. scott: 55,000? mr. stumpf: i need to -- if you may let me. we're finding out on the credit card side, less than 25% did not want those. here's my commitment to you, congressman. we're going to work with every one of these accounts and make it right for every customer. that is our commitment. i'm interested in results, not in process here. each account, we're going to take care of it. i don't care whether there was -- the biggest thing here is secondary harm. i want to make sure it was asked by another congress man or women about this issue, we take it seriously. mr. scott: my time is going down. let me ask you, do you think what you did was criminal?

mr. stumpf: i am not a criminal -- mr. scott: do you think that? mr. stumpf: i led the company with courage and -- mr. scott: if another bank president had done this or chief executive officer, would you say it's criminal? mr. stumpf: i didn't break our code of ethics and i didn't do -- mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from new mexico, mr. pearce. mr. pearce: thank you, mr. chairman. thank you, sir. appreciate you being here. it's not all fun. the -- so you talked about the 5,300 that were terminated. how big of a percent of the people in the company that were terminated out of 268,000, you'd get more than 5,300 terminated so what percentage of the terminations did that represent? mr. stumpf: i don't have that. i could work with our team. mr. pearce: don't worry about it.

that's ok. mr. stumpf: i don't have that. mr. pearce: so just looking at this from a 30,000 viewpoint and i, like mr. lucas, grew up on a small five-acre farm. dad was a share cropper before he went to work as a rouse about. we were working in oil fields in southeast new mexico. the numbers getting thrown around are a little bit big. i can't fathom somewhere in the process you got 5,300 people terminated and that doesn't come to your attention as a c.e.o. you get calls on the ethics line saying, hey, we're doing unethical stuff, 2008, according to one of the other people. according to your comments, people are involved in criminal acts and that doesn't come to your attention. you get $10.8 billion in settlements and that doesn't come to your attention. so what -- if i'm sitting here thinking about this stuff just coming in a clear, just quiet room, board, seeing these

things, at some point somebody's going to say, houston, we got a problem. but it doesn't appear that anybody ever said, houston, we got a problem. l.a. city attorney brings charges and nobody on the board says, houston, we got a problem. what, in your assessment looking back, what was it that would cause all those things to go under the radar and not be recognized, not be seen? mr. stumpf: thank you for that question. as we learned more about this issue, we made investments. we made investments in training. we reduced sales goals. we brought in regulator. mr. pearce: i understand that. you've been through that.

what kept you from seeing? what kept this from rising -- i'm sure that today that you probably consider the problem somewhat different than you did in 2011, 2012, 2013, 2014. why didn't you see the problems that you attribute today at any stage of the process? mr. stumpf: congressman, it's a good question. i said in my testimony -- mr. pearce: i did not see the answer. since you appear not to want to see it, i'm sitting here in a balanced scale as a business manager always there, do we want to clean out the well and we don't clean it out and we get a bad reputation, that's -- maybe we will. or maybe we won't. are we going to overlook the numbers of terminations? we're getting the calls, don't we really want to investigate? the stock price is doing ok.

my compensation is ok. you get the balance is there. your compensation in that period of time is approximately $200 million. that would cause one to say, i think things are running ok. yeah, maybe we got that little problem over there. but another thing on the side of the scale that says, i don't want to look at this or i can't see $10 billion in settlements, it just doesn't come to my attention. 5,300 terminations doesn't come to my attention because my -- we got 260,000 employees. obviously we're doing things 99% right. forget the two million people we defraud. mostly we're doing ok. and so i see size and complexity being a great problem when you can't see 5,300 being terminated, when you can't see $10.8 billion in settlements, then you got a problem in size and complexity. i would say there is no community banker in this country that would not have seen people doing illegal acts.

and so maybe it was your stock compensation. maybe it was the size and complexity but, sir, i think today listening to things that everyone has said, you have proved that you did not offer leadership in this. you have kind of shirked around and said the board can do anything it wants at anytime. i, sir, think you ought to submit a resignation and your board cannot hold off on action on that. thank you. i yield back. mr. stumpf: mr. chairman, can i make a comment about that? mr. hensarling: witness may comment. mr. stumpf: we did take accountability. we did invest in things to help reduce this. and we saw numbers coming down. mr. pearce: the problems continued, sir. the problems continue right through your actions. in 2011 you did this. 2013, did you that and the problems -- mr. hensarling: the time of the gentleman has expired. the chair recognizes the

gentleman from texas, mr. green, ranking member of the oversight and investigations subcommittee. mr. green: thank you, mr. chairman. i thank the ranking member as well. i'm grateful that you have given us a very positive response, and we are holding this hearing. mr. chairman, with $5.6 billion in earnings in the second quarter, wells fargo is not in this because of need. this is about greed. it's about the same kind of greed that created credit default swaps, that created negative amortization, that created no doc loans, that created prepayment penalties that coincided with teaser

rates. the same kind of greed called exotic products that created the housing bubble. this greed has caused this cross-selling to become the equivalent of an exotic product, a product that has now created a cross-selling bubble for wells fargo. the cross-selling bubble exists because you were marketing yourself as a company and a growth mode by virtue of the new products you were having with your customers. you had customers that were coming in and you were growing. this enticed investors. it enticed consumers to buy your stocks. when your stocks were bought, it benefited you and top level executives to the detriment of lower level entry employees.

they get fired. top level executives get golden parachutes. and it's business as usual. well, mr. chairman, this will not end by simply having some lower level employees go to jail. if top level executives go free and lower level employees go to jail, it doesn't end it because there is no reason for this to cease and for top level employees to be more mindful of what's going on. so we've reached a point now where the public expects to see more than lower level people punished. 5,300. 5,300 working people who, by what i seem to read, were encouraged to the point of having themselves coerced to

engage in this activity. these were people who were trying to make a living, not trying to make a big bonus and a big payday. these people deserve a fair day, not just an exit from your company. what do i mean by fair day? i think they deserve an opportunity to be heard in terms of what happened at wells fargo to cause them to do what they've done. i think that they ought to be given an opportunity to come before congress. they ought to be able to explain. and i would also add this. we have to find out how pervasive this bubble is. we have to. we do have to bring before the investigations committee, oversight investigations, other c.e.o.'s, top level executive and let them tell us. and i think we have to start with you. so tell me please, sir, how commonplace is this cross-selling in the banking industry?

mr. stumpf: thank you, congressman. for our company, cross-sell is a good thing because it represents the depths of -- greene i have to intercede. i'm asking you about the industry now. mr. stumpf: i have no idea. mr. green: you have no idea how pervasive the product is? mr. stumpf: i don't know if they're using -- mr. green: are you saying you have no belief or idea that other companies are cross-selling? mr. stumpf: i don't know that. mr. green: i must say i don't believe your answer. you're telling me you have no idea as to whether or not they even engage in cross-selling? mr. stumpf: i don't know. mr. green: do you know they engage in it? mr. stumpf: every bank, every retailer out there has some motivation, some way to make sure they recognize their people. mr. green: do they engage in cross-selling? mr. stumpf: well, i don't know their situation. mr. green: you don't talk to your colleagues, you don't talk to other bankers, you don't know

whether they engage in cross-selling? mr. stumpf: i don't know what they use. mr. green: i thank you for your answer. let me finish. because, mr. chairman, this is the evidence we need to bring the others in. we have to ask them what they're doing given that this gentleman refuses to give us what i believe to be a correct answer. mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from florida, mr. posey. mr. posey: i thank you, mr. chairman. mr. stumpf, members of this committee have already expressed outrage that we all feel that this atrocity was able to happen. it's absolutely deplorable that your customers were subject to this practice. and i'm sure the fine that wells fargo will pay will be insufficient to cover the customers -- more adequately compensate them. at best, at the very best, you and our federal regulators were asleep at the switch. you know, at worst, it's almost like a criminal enterprise. my biggest concern -- and i

think it's the biggest concern of every member on both sides of the aisle here is that we need to ensure that it doesn't ever happen again. that means we have a shared interest in understanding what caused and what perpetrated the unprecedented level of fraud, and i have just a couple of questions i think will help drives us in that direction to understand it. first, mr. stumpf, i understand wells fargo sets goals for new banking products. each employee was expected to sell daily. is that correct? mr. stumpf: i don't believe that's the case. i know as part of our reward system and our performance management that products was part of their performance management along with customer service, customer loyalty, doing things right. as of friday we're getting rid of those goals. mr. posey: i read that this puts it in the range of five to eight goals per day compared to the

industry standard of three to five per day. briefly, i was going to ask you how those goals were determined? mr. stumpf: i don't know -- you may reference industry standard and what ours is. i wouldn't have specific. i can try to get back to you on that. mr. posey: are you aware that the expected targets is based on size, location, constituency? mr. stumpf: i believe that's the case. mr. posey: you i believe they did? mr. stumpf: i don't know when that was introduced but i believe in the past, you know, locations that would have more activity, we'd either have more bankers or more goals. mr. posey: thank you for the straight answer. did the bonuses associated with those goals or wells fargo use a single uniform system? mr. stumpf: again, that's a

level of detail i don't know. i can try to get back to you on that. mr. posey: ok. now, so far in the investigation the bad actors, have you found any correlation between the likelihood of employees committing fraud and the demographic or socioeconomic characteristics of the people being served? mr. stumpf: first of all, i don't know, i'm not trying to be careful on words. don't know what fraud exactly -- i know what's right and know what's wrong. i don't know what the intent of these people were. but to answer your question specifically there was no -- that i understand, ethnicity difference other than what the communities are. we try to have people in our banks that represent the communities. mr. posey: we'll take racial and ethnicity off the table here. as someone who also represents a district heavily populated by seniors i'm worried that wells fargo may have intentionally preyed upon those they saw as vulnerable.

do you believe seniors were purposely targeted for employees stretching to meet their sales goals? mr. stumpf: because we actually capture that so we can tell that. there was no disproportionate -- it did not -- in fact, younger people. not seniors. if there was any emphasis at all or any -- mr. posey: to be clear. i don't think sales goals are inherently evil. anyone who is in a business understands the need to incentivize employees to succeed. and reward their successes. unfortunately your company forgot the most important part of any business. more important than sky-high stock prices, year-end bonuses, or fat retirements. it's the people that you serve. i'm increasingly concerned this misguided idea of success that puts actual customers in a category of least concern is perpetrated more than just wells fargo. to the best of your knowledge was this practice of creating

fake accounts exclusive to wells fargo? mr. stumpf: again. i don't know. i only know that what i know about our company -- i'd also like to make, in the few seconds left, the investment, reason people buy wells fargo, is a whole lot more about our broad product model. it's about our -- mr. posey: one quick question. can you tell me any action the cp cfpb has taken that would stop something like this from happening again? chairman hensarling: brief answer from the witness. mr. stumpf: we worked with the cfpb. we made an agreement and will continue 20 work with them on this issue. mr. posey: any action that would stop it from happening again? chairman hensarling: the time of the gentleman has expired. the chair now recognizes the gentleman from missouri, mr. cleaver, ranking member of our house and insurance subcommittee. mr. cleaver: thank you, mr. chairman.

mr. stumpf, thank you for being here. hopefully you understand -- i have a plane to catch. i may not finish my time. i dare not get on a plane and go back to kansas city and conduct myself in a way that everything is fine and we'll all join hands and sing kumbayah and fix the problem. one of the reasons that everybody in this place is upset, each of us represents about 840,000 people. and probably every one of them is angry. especially those who had problems getting loans and people who were ripped off during the crisis from 2008 and

2009. and so i think many of them think that they had a preview of this garden gecko, greed is good. greed is right. greed works in the movie "wall street." i think that's one of the problems we have here. now, you have already been warned before i had my opportunity, so i'm not going to warn you, but i do need to ask you a couple of questions. maybe just one. there were 2.6 million in overdraft charges that incurred on linked accounts and late fees. that were thousands of consumers on fire figuratively and your

bank had tubs of water but the people there decided to drink it. and let the people burn. including the people who had gotten fired. my question is how far up the chain have you been able to determine that this scheme, this fraud occurred? mr. stumpf: we know that 5,300 people broke our trust. were not honest. and we know that we're going to do a complete review of anybody who would have been part of this. and if they were dishonest and broke our code of ethics, they will be held accountable. we have returned that money with interest with an apology. mr. cleaver: i know.

i'm trying to find how far up the chain have you determined thus far that this game wins? mr. stumpf: first of all, most of our people do it right. and i -- this was just the opposite of what we train for. just the opposite of what we talked about. it's -- again, 1% of our people i know that's a lot of people given the size of our company, but -- we'll do a full review and we'll do a review of that. mr. cleaver: what i'm trying to find out is how far up the chain? mr. stumpf: we're not going to let the chain impede the board's going to do a review and the company to make sure everybody is held accountable. mr. cleaver: i appreciate that. how far up the chain? mr. stumpf: so far of the people that we have found is branch managers, their manager in some

cases and a manager of a manager. so that's the work we have done so far. >> the manager of manager would be what? vice president? mr. stumpf: i don't know the title, but i think it's called an area president. i think it was area president. mr. cleaver: have any of them been fired? all the vice presidents? mr. stumpf: i don't know if this person was a vice president -- i don't know what the title was. but i know it was anchor, then branch manager, manager of the bank managers, and area manager. mr. cleaver: no matter how high it goes, they are going to be fired. mr. stumpf: they are going to be held accountable. i can't say what -- i don't want to prejudge -- mr. cleaver: i understand. no matter how far it goes up they'll be fired? mr. stumpf: they'll be held accountable. whatever that means.

chairman hensarling: the time of the gentleman has expired. the chair now recognizes the gentleman from pennsylvania, mr. fitzpatrick. mr. fitzpatrick: i thank the chairman. mr. stumpf, i want to follow up on mr. cleaver's questions. first of all i represent a district outside of philadelphia, pennsylvania. i like probably most of my colleagues here have received letters from customers, from our constituents, from former employees of the bank. and they have a lot of questions. which we have to help them try to answer. first i want to ask sort of a foundational question. this is a question that you have been asked many times already today, last week in the senate about when you first heard of this situation, this so-called situation with your customer accounts. you have given us approximate

dates, which we appreciate. first and foundationally, if you could tell the committee, tell the american people, when you first heard about the problem where were you? who told you? what did they say to you? what did you do about it? mr. stumpf: i'll answer your question and thank you for that. i have always known as i think most americans know, that not everything does everything right every day. and we have 100,000 different people in this business. so we knew and i knew that this had to be managed. it must be managed in the business. some time later in 2013 before the l.a. story came out, because that did not surprise me because i had heard we were seeing an acceleration of this activity in a certain marketplace. i can't recall if my -- if chief legal counsel told me. i can't remember if it was in a

meeting with the business leader at the time. or compliance. that's when i first knew that this was becoming a bigger issue. so resources were brought in to bring corporate resources in to assist the business line. and then we spent -- the business and the corporate group called core spent time working on that issue and we saw the issue come down. it was not until 2015, and we should have learned earlier. mr. fitzpatrick: when you first heard where were you? who told you about it? mr. stumpf: again i don't remember where i was sitting, what i was doing. where i -- i recall hearing it sometime in the summer-fall time frame of 2013. i don't remember the exact minute. mr. fitzpatrick: there have been so many people who have been hurt by what we know right now.

not just your customers you're going to lose many customers. never get them back. there have been lower level and mid level employees who have been injured. you mentioned earlier in your testimony, 268,000 people went to work today at wells fargo to do the right thing. for the most part we all believe that. you also mention mentioned there were some 5,000 employees who lost their positions. as employers, we're responsible when you bring somebody young into an organization, somebody right out of high school or college, you have a special responsibility to that employee to train them, to make sure they are being trained in the ways of ethics in banking. how many of those lower-level employees were part of the 5,500 who lost their jobs? mr. stumpf: the vast majority -- i don't have exact numbers, but i believe about 7% or so would

and the remainder, the other 93% were someplace, as i understand, were banker, senior banker, branch manager, and so forth. we do give two weeks of training to all our team members before they go out -- you're right. we have a special responsibility to help them understand our culture. they sign a code of ethics and we -- mr. fitzpatrick: were they being told in those employee trainings about the so-called goals? quotas? mr. stumpf: they are told about all the responsibility of their job, including -- i have done town halls which i do every quarter. i did one in philadelphia just a couple months ago. i have been talking every one of those in general i talk about doing the right thing. putting customers first. mr. fitzpatrick: mr. stumpf, there have been reports from multiple whistle blowers from the bank that they provided information up the chain of

command and were ignored. matter of fact, some were fired. are you familiar with those cases? mr. stumpf: i have heard about those. those are regrettable. we have a nonretaliation policy on whistleblowers. mr. fitzpatrick: being fired in the federal government being a whistleblower is a serious matter. hopefully you are taking it seriously? mr. stumpf: very seriously. we have a nonretaliation policy. chairman hensarling: time of the gentleman has expired. the chair now recognizes the gentlelady from wisconsin, ms. moore, ranking member of our monetary policy and trade subcommittee. ms. moore: i want to welcome our witness here today. i have learned so much here. i know when you go to the wells fargo website there your picture is, john g. stumpf. the vision and values of wells fargo. it features -- you say that you started with wells fargo in 1981? mr. stumpf: 1982.

ms. moore: my math is not that good. and you succeeded mr. chevich, were you trained and knew the culture of this company, i guess there was a merger of wells fargo and norwest. so did you receive training or do you know if the employees were -- received training on this going for great program that we have talked about here today where most of your customers only had five accounts in your bank and that there was an effort to get at least eight? sort of accounts. for the customers. was that part of the culture? mr. stumpf: as i mentioned before, that was an aspirational goal. most of our customers had --

ms. moore: i don't have much time. so as your predecessor noted, there is just abundant growth potential in the wells fargo customer base. and that one of the sayings around that place was, hey, we inspect what we expect. were there constant monitorings to see if people were meeting these goals? it says we inspect what we expect. what does that statement mean? mr. stumpf: that statement means that we expect our people to live according to our vision and values our ethics and culture. ms. moore: i am so happy i'm going to congratulate you on draining the swamp of these 5,300 low-level employees. because they almost brought down one of the greatest companies that our country has ever known. i remember wells fargo, old wagon train days.

i'm happy that you got rid of those employees. and i am sorry for your loss, your $41 million. i'm sorry for the loss of the investors whose stock dropped. but i am wondering what the relief is for one of my constituents, and i have her letter and i want to enter it into the record. she worked at wells fargo -- >> without objection. ms. moore: she started making 13 -- $13 an hour and ended making $15 an hour. she was one of those whistle blowers who complained to the manager. and then they changed her performance numbers and pushed her out. and so she's a person that lost her job. and other stuff that happens to you when you make $13 an hour. $15 an hour, sorry. and you're pushed out by people because you don't want to -- because you don't fit in with the expectations and the

culture. what is the remedy, is there a fund for these employees? the good ones, not these 5,300. what is it $12 an hour? $13 an hour employees? what is the remedy for my constituent at wells fargo? mr. stumpf: we want to know about every one. and we are going to review their files for anyone who had anything to do -- if they were -- ms. moore: she has a case with wisconsin equal rights division. how come she couldn't come to you and -- mr. stumpf: we have people she could talk to. ms. moore: the people she talked to fired her. mr. stumpf: we have corporate resources here. if you could give me that name, congresswoman, let -- ms. moore: i was very disturbed to hear about -- you said the numbers weren't large enough to rise to the level of being material for security purposes. i don't understand that.

would you, as an investor, invest in sort of the bernie madoff-type enterprises? these huge dividends, would you make this kind of investment yourself? mr. stumpf: this is not -- this is a quality company who made some mistakes, but our investment basis is all about our capital, our growth -- ms. moore: one question. you have stated previously that you think the dodd-frank overregulates. do you believe that? mr. stumpf: i never said that. ms. moore: really? mr. stumpf: i don't recall saying that. chairman hensarling: time of the gentlelady has expired. the chair now recognizes the gentleman from indiana, mr. stutzman. mr. stutzman: thank you, mr. chairman. mr. stumpf, i'm a first loan from norwest bank for a motorcycle when i was 20. i have been a happy customer of wells fargo for over 20 years.

and i have been frustrated with wells fargo as of late because of the new website. and i have voiced that. and i think part of this, i think you need to do something about it, because the transparency on the website right now, i can't find some of my accounts. i think that there needs to be at this point a time where you can give customers confidence through the website to make sure that every account can be seen, because i got notices all of a sudden of accounts that i didn't recognize because i didn't see them on a daily basis. i found them after i called wells fargo and talked to them. but what my question is to you -- your story is remarkable. you came from a dairy farm in minnesota. if you had taken a different choice. i grew up on a dairy farm. still part of our family farming operation. i'm curious to know what you would do today if you had taken a different path and be a dairy

farmer in minnesota and you had been trying to buy land and trying to buy more cows and you realize your credit score, something's wrong with it and you have not been able to get your credit score up and you found out maybe your credit score was dinked because your bank was opening accounts. when accounts are opened, it dings your credit score, correct? mr. stumpf: that is correct. mr. stutzman: two million people potentially had their credit score dinged because someone else was opening accounts in their name, is that correct? mr. stumpf: that is not correct. there is about 565,000 credit cards which we have contacted 20,000 of those. and less than 25% saying -- i don't want to minimize the numbers. these are still big numbers. one is too many. but we're going to go back and my instruction is make it right for every one of those customers. mr. stutzman: here's what i was surprised to watch a little bit ago when mr. cleaver was asking you what was the highest level

officer at wells fargo to be fired. you didn't really know. you said area manager. mr. stumpf: i know the title. i know the functional title. i don't know if that person is a vice president, a senior vice president. i just don't know that. i do know that that's -- it's a branch manager's, manager's manager and we're also not done with our investigation. mr. stutzman: i understand. but this broke for the public within the past month. you apparently knew about it 2012? 2013? mr. stumpf: we knew that not everyone does it right. it was sometime in 2015 we did our pwc study, those results came in in 2016. mr. stutzman: you are the c.e.o., when 935 employees were fired for sales in 2011, all you

have to do is stand up for your company and say this is going to stop. and it should be stopping. i'm curious to hear from employees who are fired what their experience was. i hope we do a hearing with some of those. but let me ask you this. wells fargo is a huge company. is it too big to manage? mr. stumpf: no, it is not. this was a focus problem. we do a lot of areas really really well. like model risk and market risk and capital liquidity. we know we have work to do in operational and risk. we should have invested more today. i told our folks no stone unturned, no dollar unspent. get this right. we'll get rid of sales goals. mr. stutzman: where was the outrage from you a couple years ago when you first heard about it? there's outrage on this committee and rightly so. i'm outraged about it. but i don't sense the same outrage from you when you have --

when we're seeing your - the lady here, she's walking away with millions of dollars. the american people and your customers are going to be very upset when they see exactly what happens here. final question i hope that you will -- i didn't hear the question from this committee, but will you get the number to this committee of cfpb regulators embedded at wells fargo bank? mr. stumpf: i can talk to our team and we'll be as cooperative as we as we can. i don't know whether that's covered under confidential supervisory but i'll be as helpful as i can be. mr. stutzman: please do. not only have you and wells fargo let customers down and so have cfpb. people are mad at both. chairman hensarling: the chair now recognizes the gentleman from minnesota, mr. ellison. mr. ellison: i ask unanimous consent to enter into the record a report entitled banking on the hard sell.

low wages and aggressive sales metrics. put bank workers in customers at risk. i'd like to enter into the record an op ed i wrote the .ther day ers need a union. i would like to note for my colleagues, progressive caucus held a june 10 briefing listening to the workers that we have been talking about today. we would be happy to do another one. but on june 10 we had workers come in and testify to the very thing that was -- that we have been talking about today. which is these high pressure sales techniques. mr. stumpf, if you are a work at wells fargo and you are expected to seek out and reach sales goals, you mentioned that, right? mr. stumpf: we had sales goals. mr. ellison: yes or no, sir.

i don't have a lot of time. i'm not trying to be unkind but don't waste my time. yes or no. mr. stumpf: yes. mr. ellison: could you tell me, do you-all have something known as prospecting calls that were expected for bankers to make? mr. stumpf: i don't know that level. mr. ellison: you don't know. do you deny there were prospecting calls? mr. stumpf: i do not know that level of detail in our retail banks. mr. ellison: were you aware each banker was expected to make 100 prospecting calls a day? are you aware of that? mr. stumpf: that's the first time i ever heard that. mr. ellison: mr. c.e.o. chairman, are you aware that there were weekly meetings held by -- morning huddles to talk about these sales goals, are you aware of that? mr. stumpf: i know that -- mr. ellison: you got to answer yes or no. mr. stumpf: with an explanation.

mr. ellison: morning huddles or not? mr. stumpf: yes with an explanation. mr. ellison: at these morning huddles, were there questions asked of workers how are they going to sell more credit cards? and were they given goals for specifically selling a number of credit cards? mr. stumpf: i don't know that everyone holds -- i have to give you an explanation. mr. ellison: home equity loans, were they given goals -- mr. stumpf: i don't know that. don't know every branch held a morning huddle. i know our team works together. mr. ellison: were there publishing of charts on who sold how many products in your bank? mr. stumpf: i do not know that. mr. ellison: were they publishing charts who did not make sales goals? mr. stumpf: i don't know that level of detail. mr. ellison: workers say there were. if a worker did not reach their sales goals, were they put on initial written warnings? mr. stumpf: i don't know the process.

and we got rid of -- new line -- mr. ellison: if workers did not meet again were they given a second warning? mr. stumpf: i don't know that level of detail. mr. ellison: if they were not reach second warnings were they written up, admonishments for making sales goals? mr. stumpf: asking me a question i can't answer. mr. ellison: were they given performance improvement plans if they did not make the goals? mr. stumpf: i don't know that level of detail. mr. ellison: how did you generate these lists for workers to have to make calls? how were the lists generated? mr. stumpf: i didn't know if there were lists. i don't know that level -- mr. ellison: you are the ceo and you don't know if there were prospecting lists to make cold calls on? mr. stumpf: i don't know that level of detail. mr. ellison: if sales weren't important, why were workers

given credit card and home equity loan goals to meet? mr. stumpf: don't know what their goals were. mr. ellison: why were workers encouraged to open numerous accounts for customers? mr. stumpf: our team members are encouraged to sit down with the customer, to talk about -- mr. ellison: if a worker got a person to open up an account, isn't it true that that account, let's say a debit account, there has to be a certain minimum balance in that account and there is a fee to hold that account if there is not the minimum balance met, am i right? mr. stumpf: i don't believe you are right about that congressman. mr. ellison: if there is an account, does there have to be a certain number of uses of that debit account per month? mr. stumpf: i believe that's one way -- mr. ellison: if it's not met is there a fee? what is the minimum balance fee? mr. stumpf: i don't know what those numbers are. chairman hensarling: time of the gentleman has expired. the chair now recognizes the gentleman from south carolina,

mr. mulvaney. mr. mulvaney: i thank the chairman. i don't know, i can't tell you how disappointed i am to even have to be here today. as one of the many members of this committee who, every single thein here, defendants banking system. defend capitalism. defend free markets. to sit here and have to watch you essentially validate everything that the other side has said about you and your business and industry for the last three or four generations is extraordinarily disappointing to me. the damage that you have done to the market, to your industry, far exceed the damage you have done to your own business. but again there is nothing i can do about that. i want to ask you one question. i know a little bit about business, not nearly as much as you. what little i do know i learned from my dad who was actually raised very similar to you. he was from minnesota, went on

to wynonna university. little older than you, but not much. i remember him telling me one time when i was first getting into business, you know what, you can learn a lot about an enterprise, about an organization, by looking at the leader. and that the organization will take on the personality of the leader. or the owner, or the person in charge. if you walk in to somebody -- you walk into a lobby and you are received nicely by the young man sitting there answering phones, it's probably a good indication the lady that owns the place is a good person. conversely, if you walk in and get treated like crap and disdain, it probably says a lot about the people at the top of the chain. i often think the folks that work with me in my office reflect that. you come to my office you get treated well because that's important to me. the place that you ran, mr. stumpf, i don't know that much about wells.

i know a little bit about wachovia and wells being first union because of where i grew up. you-all are rotten. we have heard stories today everybody's heard about. i'm looking at the story from 2009 about the lawsuit that got filed that says wells fargo, saw the black community's fertile ground for subprime mortgages as working class breaks were part -- working-class blacks were part of the homegrown mania. in an after date she stated that employees referred to blacks as mud people. and to subprime lending as ghetto loans. i can't tell you how hard it is for me to even say that. targeted black churches. i'm not going to defend that. that doesn't even deserve defense. i'm going to ask you one question. does this organization reflect you? you are in charge. mr. stumpf: i am deeply sorry and i read that article you just said. and that has no place in our culture. no place in what we have done.

and we're, today, the largest lender to low and moderate income people in housing. we make more loans to african-americans, latinos, persons of color. we're proud of that. and that place -- that kind of language and that kind of behavior is not who i am. i have learned -- my life lessons also from my parents. my dad is 94. and he's still a wonderful guy and big influence on my life. so is my mother. i try to lead with courage and conviction. our company is based on those values of ethics, of doing what's right. and the company, of course we have made mistakes. not everybody lives up to our vision and values. but the vision and values are 268,000 people aspire to and do every day is consistent with what i want to live my life and

what our cultures of our company. mr. mulvaney: i appreciate that. i want to say something to my democrat colleagues. i know we'll see this. and believe me, if the role was reversed i might see this as an opportunity to push a political initiative, agenda, to bang the drums for more heavy regulation. everything that we're talking about here today, including what i just read, which i won't read again, happened in cfpb and dodd-frank. it happened after we supposedly fixed all of this with regulation. and maybe i would suggest this. you can't fully regulate bad actors. i'm not here in a position to say if there stumpf is a bad person or not. that is not up to me. i try not to be in the position of judging other people. that's for his board. i know how i would vote if i were the board. he wouldn't be here if i were on the board of that company. but you're never going to be able to fully regulate bad actors and i hope we look at

this with a certain levelheadedness as we move forward. thank you. chairman hensarling: the time of the gentleman has expired. the chair now recognizes the gentleman from colorado, mr. perlmutter. mr. perlmutter: first, mr. chair, i'd like to introduce into the record the report, community banking reports may 24, 2016 from wells fargo. chairman hensarling: without objection. mr. perlmutter: and report from may 20, 2014. chairman hensarling: without objection. mr. perlmutter: mr. stumpf, about eight years ago you were before this committee and i was so proud of you and proud of wells fargo. and the fact that i thought, operated as a bank. and really looked after me, they -- a customer, somebody who's been with the bank. all these young guys. i have been with one of the predecessor banks for 40 years. and i represented some of the predecessors. first interstate, security

pacific, united. the culture is what i want to talk about because that really is you and it is your board of directors. and i have heard terms today that i don't really align with the banking business. if you will. i look at banks as something different. we came in with $800 billion to save the banking system when it was collapsing. because it's something different. but i hear you use words today, and this is where i think the root of this problem is, sales organization. retail sales. stores. i never, ever in my life referred to my branch, bank, in applewood, colorado, as a store. you don't sell veggie matics. you don't sell grapefruit. you take people's money, you safeguard it. and you lend it out to people

who may need it for interest. maybe me. and to get in -- this is where mr. green was going with the products. i don't know how many products you've got. i looked at my account. i do like the online banking by the way because i can look at all my accounts. i turn out, as mr. royce says, i have eight accounts, personal accounts with you. how i have eight, grade eight, don't know. but i do. so talk to me about why you're calling these things stores. why you use words like retail sales and cross selling. you're a bank. mr. stumpf: we're a bank. and the idea here is that we want to make sure our team members when you come into a bank or any one of our customers do that we treat them with respect and that we provide products and service that is -- helps them.

when they do more with us, we give them a better deal. they get more value. it helps them and it helps us. and whether we call them a store or a branch or a location, it's what -- it's the hearts and mind of our people inside there. mr. perlmutter: i'll accept that. but i still think you are a bank. and we treat banks differently than grocery stores because you are the heart of the financial system. here's where i want to go. i go into my bank and there's been some turnover there. they always treat me well. they are always very nice young people. sometimes they are saying do you need this or that, i generally am saying no. when you talk about these goals that are established, why are you even setting goals? the goals should be if your customer needs something try to help them. mr. stumpf: correct. we're getting rid of product sales goals. mr. perlmutter: why did you have the goals in the first place? mr. stumpf: it was an idea for people to make sure that they

use the right way of sitting down so they have a conversation with a customer. i don't want people in our branches or banks to be apathetic and not care. i want them to sit down and have a conversation with about where that customer is in their financial journey so they can meet a need with a product. what works well and deepens relationships, everyone wins. no one should be ever, whatever the goals are, no one should be forcing a product or saying why don't you do this. why don't you buy this. it doesn't -- that's not the way we train. that's not the way we innocent ncent for. even today we have taken that off the table because we're learning that customers grow with us when they are happy. when they are satisfied. when -- and our satisfaction scores and loyalty scores have never been higher. that's a better way of doing business. mr. perlmutter: look, i'm just up here as a member of congress

who has worked with banks before. i'm just telling you you got to stop -- our stores, our stores generate more deposits than our competitors. you got denver up here on your chart. that creates the wrong culture. and i yield back. chairman hensarling: the gentleman's time has expired. the chair recognizes the gentleman from north carolina, mr. pittenger. mr. pittenger: thank you, mr. chairman. mr. stumpf, good afternoon. i'm from charlotte. mr. stumpf: we love charlotte. mr. pittenger: there are some 23,600 employees there. they are my constituents. i do have deep respect and appreciation for the corporate citizenship that you-all have been in charlotte, you have been exemplary in terms of what you have done in our community. you take active roles, your employees do, and many nonprofit

organizations. that leadership is commended. of course we cherish the wells fargo golf tournament. so you have a major presence in our community. and that's why today is such a sad day. i know it is for you. i am sure as you look back on these 35 years and where you are today, you think, what if? what if i had done this? what differences could i have made? where was i blind-sided? what mistakes, where did i err? so i think i'm asking you to look as if you were sitting in our seat. we represent these people. as was said earlier, some 750 to 800,000-plus people. you heard a lot of outrage. a lot of righteous indignation because we haven't seen what we

all expected. in the south part wells fargo facility that you have, there is written behind the teller station, counter, statement by mr. wells. came from 1864. do you recall that statement? i think it's very prominent. perhaps it is in other wells fargo. it seems to be the motto of your bank. mr. stumpf: are you asking me a question? mr. pittenger: made a lot of statements. mr. stumpf: treat every customer with respect. mr. pittenger: we have a powerful rule. concentrated one word, courtesy. so, i think, as you look at all -- i think that's the challenge we have today. what could have been done

different? certainly the regulators were there. yet this is reported by a news agency. what would you have done different today? as you look back and the changes and mistakes that were made as the c.e.o., what happened in what happened in that corporate culture that did not allow that information to come to you in a more timely fashion? that would have caused you to take even greater direction and leadership. mr. stumpf: it's a good question. i probably ask myself that a thousand times, a million times. and while i want to defend our culture and people, i recognize that we could have done more earlier. i don't know if there is any one point, but surely we should have realized earlier that product

sales goals could elicit him behavior that's incontiss tent with our culture. him even if it happened like in this case with 1% of our team, it's way too much. it's simply not worth it. frankly it's not even consistent with where we're going by giving the business today. i don't know if i can be clearer than that. there is a lot of people doing a lot of introspection within the company today to make sure that we never, ever put a customer or a team member. we want all these customers to be foremost at what we do. if courtesy with the right word, we think of relationship. we love long-term, mutually beneficial relationships with our owners, our team members, and most importantly our customers. mr. pittenger: yes, sir. i think those of us who

i think those of us who understand free markets, i was on a bank board, small bank, but we understood the customer. we understood the importance of financial industry and what it does to facilitate economic growth. and that's why we're so challenged today because there's been a strangling of regulations on the financial industry. yet with that we're having to deal with you and with this bank and with this problem that's going to have ripple effects. and the messaging is going to be there that there needs to be even more regulations. mr. chairman: the time of the gentleman has expired. the chair now recognizes the gentleman from connecticut, mr. himes. mr. himes: thank you, mr. chairman. mr. stumpf, we focused a lot

today on accountability. i want to go back to something that congressman lucas' concerns troubles me. the focus on culture and materiality of what happened here. we're hearing there is not a problem with the culture. are you hearing a lot of i disagreement up here. we're hearing in the senate hearing that this wasn't material. and i guess if you sort of exquisitely finely define materiality. s.e.c.defines t. -- maybe the s.e.c.defines t. -- defines it. maybe $185 million in fines is not material. but this is about much more than a legal definition of materiality. we need to hear you say that you understand the magnitude of what has occur here. it's more than $185 million. it's about trust and faith and belief in the system. it's not about the ups and downs in one k it's about people's faith in the banking system, faith in the market economy. it's about whether competition is perceived as a good thing by the american public or a bad thing. it's really about people's faith and organizations like yours and like the one that you're testifying with -- in front of

me today. let me start with the numbers quickly. what matters to an investor is the value of the company they own. your shareholders have paid out $185 million. including the state of connecticut's pension funds. mr. stumpf, do you know what the market cap, value of your company is today? mr. stumpf: i didn't look this morning but i think it's $220 -- mr. himes: $228 billion on september 7 when this started it was $253 billion. there has been no other material impact. just this event has cut $25 billion ooch the value of wells fargo. -- off the value of wells fargo. do you know what the value of ford motor company is, mr. stumpf? mr. stumpf: i do not. mr. himes: $50 billion. just since the 7th, you have and your organization and the culture have obliterated a full half of a ford motor k that has to be material, doesn't it? -- motor company. that has to be material, doesn't it? mr. stumpf: i don't want to diminish this. i'm deeply sorry we didn't do the right thing. i understand that reearning the trust of our customer and american people is going to be our biggest challenge. mr. himes: i do want to get away with the numbers. i'm troubled by the culture thing. do you think that you can fully

measure wells fargo's value with the hard assets, dollars and cents, numbers of the accounts. let me ask you it another way. wells fargo's reputation and brand an important part of the company's value? mr. stumpf: no question. mr. himes: do you believe that wells fargo -- mr. stumpf: with an explanation. i think frankly what is in the hearts and minds of our people and the trust with our customer is by far the most important thing. if they make all the rest happen. mr. himes: do you think that wells fargo's reputation has been damaged in a material way by this? mr. stumpf: i think there's been damage, yes. mr. himes: what i worry about is bigger than wells fargo. it's the fact that the system comes apart if people don't have faith and trust. stumpf, can you see what i'm holding up? it's a $1 billion. -- one dollar bill. the all mighty dollar.

a piece of papeer with green ink on it. does this thing have any intrinsic value? can i eat it if i'm hungry? mr. stumpf: no. it represents a promise. mr. himes: it's a promise. it relies on the faith and the belief in the american people that this has some value, otherwise it's a piece of paper with green ink on it. mr. stumpf: i totally agree. mr. himes: can i expand that point to the banking system? if americans started getting anxious about the fact you don't have enough money in your banks on any given day to cover their deposits, we would have a problem. mr. stumpf: no question. mr. himes: the only thing standing between us and this being meaningless, and between them believing that the banking system doesn't work is trust and faith in the fact that it does. mr. stumpf: you are absolutely right. trust is the absolute critical element here and we have a lot of work to do to work on that. mr. himes: so your investors are

equity investors. they accept risk, including the possibility that something like this could happen. if you don't want this risk, you buy bonds or treasuries or whatever it is. i would implore you as somebody who i think understands that the market economy is important and that the financial services industry is important, i would implore you to please don't continue to focus on this idea that this is not material. i think we're now agreeing it is material. mr. stumpf: i never said -- mr. himes: please work with your colleagues to repair some of the damage that has been done to the faith and the trust that we both here today haveacknowledged is the only underpinning of the system that has done so well by you, sir. mr. stumpf: thank you for your comments. i couldn't agree more. this is bigger than the 185. mr. himes: yield back. mr. chairman: mr. hensarling the time of the gentleman

has expired. the chair now recognizes the gentlelady from missouri, mr. wagner. -- mrs. wagner. mrs. wagner: thank you, mr. chairman. stumpf, you have come before this committee today to answer for the appalling actions taken by your company, wells fargo. i have a number of questions but i want to start by expressing my outrage, outrage that your company was taking vac of your -- advantage of your customers, our constituents, for years and years and years. i don't understand how your employees could create millions of unauthorized accounts without someone raising a red flag. and if that happened, how you failed to act. on that knowledge. you had a responsibility to your customers and you failed. bigtime. placing one's money into an organization like wells fargo someone of the biggest displays of -- what are we talking about? public trust. and you, sir, and your company, have betrayed that trust. and taken advantage of consumers in order to meet sales

performance goals and fraudulently improve earnings and share prices. this is wrong. this is immoral. and this may even be criminal. and as you stated, sir, the buck stops with you. not only did wells fargo and your employees fail these customers, but our regulators failed as well. they neither identified nor prevented this malpractice from occurring in the first place. it wasn't the o.c.c. or the cfpb that first uncovered these deceptive failed practice that is were taking place but the "l.a. times," the media. that first brought your company's shameful practices to light. and while it is the regulator's

job to prosecute the banking institutions that break the law, it is our job as members of congress to prosecute the regulators who are asleep at the wheel. from what we know, and there is a lot we don't know, sir, this widespread abuse was occurring as long ago as 2011, some have said maybe back as far as 2007. with 1,000 employees being terminated every year for creating fraudulent accounts. yet this behavior persisted for years without management intervening. and even when regulators began to investigate, wells fargo did nothing to notify customers and shareholders. your company abused its customers while you have apologized, that apology carries no weight with me, sir. you still have a lot to explain to this committee. and frankly to my constituents. how many of your customers have been impacted by your fraudulent activities? mr. stumpf: i don't know. i know what the p.w.c. numbers showed. mrs. wagner: what is that number? mr. stumpf: two million accounts. they could not rule out.

now we're going back and contacting those customers. within our credit card business, as i mentioned, we have already talked to 20,000 of them. mrs. wagner: how many in missouri? mr. stumpf: i can't get you that. mrs. wagner: quickly as you can, please. how many customers have been abused in my home state of missouri? mr. stumpf: there were, 1,191 accounts. miss wagner: what portion of these customers were defrauded after you became aware of the fraudulent activities? mr. stumpf: i don't know -- i don't have a time line on tha. i just have it broken out by credit card -- mrs. wagner: you are going back, you can find out. and you don't have a time line it. you have a time line for the employees that you fired year after year after year, but you have no time line of the number of fraudulent accounts? mr. stumpf: i can work on that and get that to you. i don't happen to have it in my book right now.

mrs. wagner: you keep saying, sir, you are going to make it right. those are your words. are you going to make it right. i'd like to know when? when will these customers be made whole, stumpf? when will we know and when will they know whether their credit scores have been affected? when? mr. stumpf: we already talked to 20,000 of our customers. and we're hearing that 75% -- less than 25% either didn't want the card or didn't know they had the card. and -- mrs. wagner: 20,000 out of two million-plus customers? this is five years, sir. just to identify and begin rectifying the problem and wells fargo only just announced their sales incentives will eliminate in october. customers, will they have to wait five years or longer to get relief? mr. stumpf: 20,000 we talked so far is out of the 565,000. other ones did not have, from my understanding, a bureau involved. we're going to talk to you-all our customers.

mr. hensarling: the time of the gentlelady has expired. the chair now recognizes the gentleman from delaware, mr. carny. mr. carney: mr. stumpf, i represent the whole state of delaware, soirg 500,000 people. one of the bigger districts here in the congress. we're a banking center as you may know. we don't have a huge wells fargo presence. could you look in your book and find out how many fraudulent accounts were attributed to people who live in the state of delaware so i know what we're talking about? mr. stumpf: i can tell you how many accounts that the p.w.c. analysis could not rule out. these aren't -- mr. carney: your commitment is to make right each of these accounts? mr. stumpf: right. delaware, let me see if i have this number right. 4,255 accounts. mr. carney: my responsibility is to make sure and your commit s-to make sure each of those accounts will be -- you will

make right by those people. mr. stumpf: we're going to contact every gostit account. every credit card cuss torme that we can make contact w we'll try to contact all 565 in your district, your state. looks like there's 1,793 cards. and i don't know how many of those won't be wanted versus wanted. we'll look for the secondary harm. mr. carney: part of our responsibility as members of congress in this hearing is to figure out what went wrong. whether people are being held i accountable. most importantly what we should be doing going forward. the thing that i'm struggling with is how long this went on. before you were able to stop it. and you have heard that question on and on again. it does for me as

mr. stutzman asked from the other side of the aisle, by the way i agree with mr. capuano, there are very issues in the six years i have been here where both sides of the aisle are on the same page. meeks and mr. capuano and mr. and mr. duffy are outraged on the same subject, you know that something is going on here. what about that question about whether this is an institution that's too big to manage? mr. stumpf: again, as i mentioned to another -- mr. carney: mr. stutzman asked the question. mr. stumpf: we can get our arms around this and we will. mr. carney: how can you manage such a large organization with 260 whatever thousand employees and not be able to answer the questions that mr. ellison posed to you about things happening on the frontlines? how do you control that activity which was really what was going on here. mr. stumpf: again, we have leaders in those businesses that could answer those questions. i don't have that level of detail. i can get that. mr. carney: one of the things i have worked here, i'm not going

to be here after this next election. one of the things i worked here since coming is on mortgage finance reform. entered into the record by meeks was a list of wells fargo settlements for state and federal regulators. there is a whole list, $5 billion plus, related to mortgage fraud, if you will. could you explain to me how your chain of control got out of hand with respect to theseviolations? mr. stumpf: regarding the -- mr. carney: much more impactful on the economy than these fraudulent accounts. although they are really important. mr. stumpf: i don't want to minimize any of our mortgage settlements. but we're by far the largest mortgageer. mr. carney: which is why i asked the question. if you have the level of fraud going on with fannie mae and

freddie mac. mr. stumpf: we have made settlements with a number agencies. our settlements have been, we have had far fewer issues, even though they are the largest -- i'd like to make this point. mr. carney: the settlements were representations made to fannie and freddie which indicated that the mortgages are -- were what you said they were, correct? mr. stumpf: i believe what you're referring to is an f.h.a. issue we settled in the last six months. mr. carney: $1.2 billion. fannie and freddie settlements were $869 million to freddie and $591 million to fannie mae. essentially as i understand these settlements, they are over information that was misrepresented to the g.s.e.'s. mr. stumpf: i don't have that level of detail. since 2009, we made 11 million mortgages in america to help people get lower rates or buy homes and that's been very important to our customers. mr. carney: so with an

institution about large, how do you make sure those kinds of things don't happen on the mortgage side as well? mr. stumpf: we have a terrific team on the mortgage side. we've done a lot of work to improve there and we have great leaders in those businesses and we're trying every day to get better. mr. carney: well, i'd like to have some additional information if you can provide it. my time has run out on the basis of these settlements. mr. stumpf: i'd do everything i can. mr. chairman: the gentleman from kentucky, mr. barr, is recognized for five minutes. mr. barr: i share my colleague's frustration with my colleagues millionened up over 1.5 credit cards and bake accounts real customers, costing them millions of dollars, potentially hurting their credit scores, and while wells fargo does not have a major retail resins and kentucky, it is likely that --

likely that many of my constituents were defrauded by .he programs if you could, you could reference your materials again and identify the number of my constituents who may have been impacted. mr. stumpf: while i'm getting that i would like to make clear the 1.5 million deposit accounts, very few, if any, had any credit impact. we didn't report that to the credit bureau. but let me -- mr. barr: potentially the accounts in kentucky. mr. stumpf: there are 629 that could not be ruled out. that -- you testified i have to think about those 629 kentuckians. those who may have had an

account opened without their knowledge and consent, that may ,ave resulted in overdraft fees and could very well have damaged their credit score. again, no fault of theirs. you said you want to make this right. constituentshat my who have been damaged by your conduct would say that culture that allows that to happen, that is a rotten culture. my question to you is let's not victims.s of these you said your bank would make those.ght for and yourcommit to me government relations team commit to me on the record that you will work with us and our constituents to make this fully right for them?

mr. stumpf: yes. so let me -- the answer is, yes, with an explanation. we are committed to make it right for every one of our single customers. in fact, we are working with -- we're going to have a consultant that the cfpb has to approve. we're going to have mediation. we're going to go back. i'm interested in results. mr. barr: thank you. mr. stumpf: i'll have our teamwork with your team. mr. barr: clearly there was a lot that went wrong with your bank. no one did enough -- no one did enough fast enough to fix it. secondly, i want to tell you who i also think about in addition to those constituents who have been harmed. i think about the community banks and credit unions in my district. and i've talked to many people who worked for small institutions in rural kentucky who are your competitors, and the fact that this scandal has painted a bad picture for the entire banking sector, and frankly, the institutions in my district that all those community banks and credit unions, they don't have your culture. but now they have a tarnished reputation because they've been

swept into this with you. and we've been fighting for regulatory relief for these small community banks. and these credit unions. that frankly represent competition to big banks like you. so what i worry about are these small community banks and credit unions that are now going to have to deal with the ramifications of the bad acts of your institution. can you comment on your colleagues in the banking sector that now are going to have to live with the regulatory onslaught that is likely going to sweep them into this when they -- they're not at all? frankly, they don't have a culture like yours. mr. stumpf: again, i'm sorry for what we did and sorry we didn't move fast enough. again, the vast majority of our people in the regional bank did

exactly what was right. they followed our culture. this is about people who did not do the right thing or at least about -- behavior that was not right and i accept responsibility for that and i'm sorry about what happened. mr. barr: one final question. you testified today you should have known sooner, that product sales goals could have elicited bad behavior. was it your policy at the time this was going on to notify customers when an account was opened? mr. stumpf: you know, when an account was opened, that was not funded, we had an automatically within 60 or 90 days remove from the account file. it was not until 2015 that we finally put it together that there could be a fee during this. so that's when we did the full-blown study back to 2011. mr. barr: i would think best practices going forward at least and in the past is to notify a customer when you open an account. mr. stumpf: we do that today. within one hour we will allow

them and we won't pull a credit bureau until we have a signature. >> now recognize the gentlewoman from alabama, sewell, for fiveminutes. ms. sewell: it seems like wells fargo has made somewhat of a deep dive on the 1.5 million checking accounts and half a million credit cards? mr. stumpf: correct. ms. sewell: can you tell me with any excess fissity what demographics was most affected? was it california. i represent alabama. can you tell me how many folks in the state of alabama were affected by this? mr. stumpf: ok. i can tell you. it was more in the west and the southwest, but let me get to my numbers here. ms. sewell: and while you're looking, i also want to know whether or not you have identified any commonality between those folks that were

affected? either geographically, demographics, race, ethnicity, income level? have you sort of isolated as to who was most affected by the fraudulent action? mr. stumpf: that's a good question. of the two million accounts that we could not identify, we couldn't rule them out, there was no -- in fact, the deposit side skewed to younger people, not older people. and we don't take -- we don't use race or ethnicity. we don't capture that information. only age we do have -- ms. sewell: what about income? when people are opening up credit cards they have to tell what range of income. any of those identifiable commonalities between those? mr. stumpf: i should have mentioned that. on the deposit side, i don't think we do that. on the credit card side i don't have the information but i can surely get back to you on that. or at least have our team talk to you about that.

ms. sewell: and you were looking up alabama to see the state of alabama, how many customers from affected. mr. stumpf: they had 22,795 accounts. not necessarily customer accounts, that they could not rule out. i don't know -- ms. sewell: so 22,795. mr. stumpf: and 95. ms. sewell: and i can asume from all your testimony -- assume from all your testimony repeatedly here today that the customers in my state will be made whole or made right, as you like to say? mr. stumpf: that is our goal for every customer. ms. sewell: now my real question is this. being made right includes more

than just being made whole for the damage that was done personally to the customer. the reality is that you violated the public trust. it seems to me being made whole also should go to all of the bonuses that were received off of fraudulent information over the time period that has been identified. now, how much money have you made over the five years of 2009 to 2015 in just bonuses? i'm not talking about your compensation. just bonuses. mr. stumpf: i don't recall exactly but -- ms. sewell: would it surprise you you were paid $12 million -- mr. stumpf: let's say it's $18 million or $20 million. i don't recall the number. ms. sewell: being made right is not just about the personal damage that was done to the customer base. it really is about the public trust and -- mr. stumpf: it is. ms. sewell: that to me goes to every level of your company being unjustly enriched by a fraudulent scheme such as this. i'd like to know what your thoughts are about how wells fargo plans to make right to the public on such a magnitude. mr. stumpf: thank you for that. first of all, i think it's important to note that fraudulent or unused accounts hurt customers and they hurt us. in fact, the the $2.6 million of fees that we found for this four years cost us $10 million to produce. that's a losing operation.

there was, you know, people invest in our company for a whole lot of reasons, and one is about deep relationships of customers who use products. so unwanted product, unused product is just -- ms. sewell: with all due respect, sir. i understand it hurts you. i'm here to tell you that the customer base and the 22,000 folks in alabama are much more egregiously hurt than you. mr. stumpf: there's no question. i agree with you. ms. sewell: go back to the comments of my colleague, ellison, who was really trying to capture the bad business practices of your sales force. do you have that line of business? is that line of business still part of a portfolio of wells

fargo? mr. stumpf: we have a great retail product and we love it. we are getting rid of sales goals. ms. sewell: what are you doing to make sure this doesn't happen again? mr. stumpf: for any credit card opened or deposit account opened there has to be a signature. if there is no signature it can't be open. and we're doing mystery shopping. ms. sewell: what -- mr. stumpf: you have to put in your pin. mr. hensarling: the time of the gentlelady has expired. the chair recognizes the gentleman from pennsylvania, mr. rothfus. mr. rothfus: thank you, mr. chairman. mr. stumpf, these charges against wells fargo violate any legal or ethical standard. we know that wells fargo employees for years opened two million accounts without authorization. hit sales targets and draw aadditional fees, employees

engaged in egregious deceptive practices. this was theft, plain and simple. that the offending wells fargo employees did what they did in a systemic way represents a gross violation of trust. when i first heard about these activities, my first thought this falls in the you got to be kidding me category. one's left asking, how does this happen? over the course of the last five years, wells fargo was firing 1,000 lower level employees each year. we learned in last week's testimony that it was not until 2014 that various committees on wells fargo's board were informed. it's incredible this did not rise to the attention of the board immediately and it's incredible it did not end sooner. by any standard, these actions were wrong. 5,000 people, perhaps more, lied, cheated and stole from customers who they thought that would trust them. how many people in pennsylvania were affected by this? mr. stumpf: i'll take a look at that. as i'm doing this i want to add a couple of comments. many of these people, over 10% or 15% were bankers. bank managers.