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. these weren't all lower level

people. they were in the mid 30's. mr. rothfus: how many in the organizational chart? mr. stumpf: depends on the -- mr. rothfus: are there 10 layers? mr. stumpf: eight, nine, 10. mr. rothfus: not a lower level people? how many people in pennsylvania? mr. stumpf: in pennsylvania, 79,918 accounts we could not exclude. that's about the two million. we're looking at -- understanding on credit card, only 20 -- not only but 25% could not remember or did not order -- mr. rothfus: how many branches do wells fargo have? mr. stumpf: across the country, 6,200. mr. rothfus: how many were involved in the scandal? mr. stumpf: i don't know. mr. rothfus: is this a coast-to-coast scandal? mr. stumpf: it's behavior that we did not want and i don't know if it affected every state or every region. i just don't have that.

mr. rothfus: in the last five years, how many branches have you visited personally? mr. stumpf: you know, i don't keep a count of that, but i pick a number, maybe 1,000. mr. rothfus: do you make it a practice to go behind the counter and work as a teller or as a -- mr. stumpf: to work as one? mr. rothfus: yes. have you ever seen the show "undercover boss" where the c.e.o. comes in and does the front line work? mr. stumpf: yes. i have not -- i am not trained or allowed to do that but i walk behind the teller line and talk to our people. mr. rothfus: you wouldn't have waited on a customer and maybe sit in the shoes of one of those front line employees and maybe the cross-selling practice? mr. stumpf: i've talked with them. the vast majority of people are

excited. our culture and our -- in fact, we have engagement scores. every year we do about 93%, 94% of our people participate in the regional bag in a gallop score that brings into account, are you happy with your job, rewarded, whatever? and 14: 1, 15: 1. mr. rothfus: some of those employees had an issue. how many whistleblowers are there, do you know? mr. stumpf: i do not have that number. mr. rothfus: do you appreciate the kind of courage it takes -- do you appreciate the kind of courage it takes to be a whistleblower? mr. stumpf: absolutely. our people can call an ethics line, and they can do it -- mr. rothfus: you have no idea how many whistleblowers there there are? mr. stumpf: i don't. mr. rothfus: cnn is reporting dozens. do you think that's accurate? mr. stumpf: i don't know. we'll work -- every name we get we'll work on. mr. rothfus: do you know how many people are no longer employees at wells fargo?

mr. stumpf i don't know. : mr. rothfus: do you know how many may have been demoted, if any? mr. stumpf: i don't have that number for you. mr. rothfus: i would suggest that that -- again, given the courage it takes for somebody who spotted something like this to speak and historic protections that should be attributed to whistleblowers, that this would be a top priority. mr. stumpf: and we have an anti- -- mr. rothfus: how many people at wells fargo are working on the whistleblower issue? mr. stumpf: i don't know. mr. rothfus: do you know how many honest wells fargo employees may have lost out in a race with some of the fraudsters? mr. stumpf: i don't have that answer for you. we got 268,000 terrific team members. mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from illinois, mr. foster:: thank you, mr. chairman, for holding this hearing so we can examine the abusive and fraudulent practices that were so pervasive at wells fargo. i'd like to start by reiterating

what many of my colleagues have said and that this corporate malfeasance is exactly where we need a strong and independently funded cfpb. as director chord ray testified in the senate last week, the cfpb learned about the fraud at wells fargo through its whistleblower line. it's my understanding he offered to be here today but it appears that his testimony was not needed to understand the role that his agency played in bringing the fraud to light. and i suppose we don't need his testimony because the cfpb has returned more than $12 billion to 27 million americans and this case adds to that record. the cfpb did not learn about the fraud because wells fargo self-reported. in fact, records suggest that you, stumpf, were informed about the fraudulent accounts anywhere between two and four years before self-reporting by wells. in the wake of this incredibly egregious institutionalized conduct, you've now come to washington to say you're sorry. of course, forgoing a portion of your compensation but that does not address the core problems and the culture of the institution and the governance

rules that allowed it to develop. as someone who started a manufacturing business and served on its board, i understand that corporate culture starts at the top and eventually permeates the entire organization. but your response to the gross misconduct that drove results that you prided yourself and the bank on has been underwe will aming, to say the least. it's clear that simple motivation of keeping the trust of customers, of shareholders

and the jobs of 5,300 front line employees has not been enough incentive to drive a culture of compliance within management. so my first question to you, mr. stumpf, given this situation, which actually should be a case study for corporate mismanagement in every business school and law school in the country, what specific governane rules should have been in place that would have prevented these abusive practices? mr. stumpf: thank you for your question. i acknowledged before we should have done more earlier. we should have brought our corporate resources in earlier and we should have obviously got rid of sales goals earlier because they were misunderstood or misrepresented by some of our team members. i thinkthat would have been good governance. mr. foster: ok. i think i'd like to focus on specific proposals. i think we've all been impressed by this list of settlements and penalties that have been imposed on wells since the financial crisis that's been scrolling on the monitors and without objection i'd like to enter that in the record. mr. hensarling: without objection. mr. foster: and one specific proposal that's been made is regulators' penalties for illegal practices should be paid first out of the bonus pool for top executives. so that you and every one of your top executives would have your bonuses at risk for any

malfeasance in any corner of the organization rather than having the regulatory fines being taken largely out of the hides of shareholders. so my question to you is, if everyone knew that the regulatory fines were to be paid out of the bonus pool, would that have help change the culture that led to these abuses? mr. stumpf: i can't speculate on that. in my case, the board is independent and the board actually took my recommendation and passed that. we filed yesterday, and i'm going to do i can to help this company going forward. mr. foster: we can all speculate on what fraction of that compensation would have happened without the attention and the press and by congress on this. i mean, for example, if you knew that the bonus pool would take a hit for any regulatory fines, wouldn't that have created an incentive not to develop a bank which was effectively too big to manage? mr. stumpf: first of all, i disagree we're too big to manage. we need to focus more on this issue, on operational issues and on compliance issues.

again, we do many, many areas really well. and i'm sorry we didn't get everything right along the way, and we've made settlements. we tried to make it right for customers. recognizing also we do a lot of really good things. we're a great corporate citizen. and 268,000 team members really trite to get it right every day for all of our customers. mr. foster: as we look for bipartisan solutions to try to prevent this sort of thing from happening, again, i find that a very interesting suggestion. just a last quick question. the -- many of the actions that were taken here hurt the credit scores which may -- of customers which made it difficult for them to buy mortgages. are you specifically looking to find out if any of your customers have been denied mortgages because of actions you've taken? mr. foster:: we are going to dig into that and make it right.

mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from new hampshire, mr. guinta. mr. guinta: thank you, mr. chairman, and thank you, mr. stumpf, for being here. i share in the frusstrangesd anger and the displeasure of my colleagues on both sides of the aisle relative to this particular issue. i have listened over the course of this -- of your testimony, and there are a number of what i would consider inconsistencies either based on what you said today, what was in your oral testimony or what you stated in the senate hearing last week. i want to clarify a few things. in your oral statement you said that you made a recommendation to the board that it takes certain actions regarding your salary and other pay. mr. stumpf: that has -- my testimony and that's accurate. mr. guinta: when did you make that recommendation? mr. stumpf: it was -- today is thursday. it was sometime before the independent board met without me. i don't recall.

it might have been -- it was before or during the board meeting. but i referred -- i made comments about that to our lead director that i wanted to do that. mr. guinta: are we talking about last week or this month? mr. stumpf: last week. mr. guinta: last week. before or after the 20th? mr. stumpf: what day is today? mr. guinta: 20th is tuesday. today is the 29th. mr. stumpf: it was sometime after -- it was sometime on the weekend, i believe, to the best of my recollection. mr. guinta: so it was after the senate hearing. mr. stumpf: it was after the senate hearing. guinta: before you had said to the senate banking committee that you didn't want to prejudice the compensation --

prejudice the compensation. what changed before today and the 29th? mr. stumpf: i didn't want to prejudice them. they can do more if they want to. they have all the rights and responsibilities. mr. guinta: i understand that. i don't understand on the 20th you said you didn't want to prejudice them and then four days later the 24th, which is the saturday over the weekend, you did a reverse course. so what happened between the 20th and the 24th for you to change your mind on that issue? mr. stumpf: i decided this was a good way to show a step, start to show my level of commitment. mr. guinta: why was that not important before the 20th? mr. stumpf: i was preparing for other things. i developed that thinking sometime over the weekend. mr. guinta: that's a pretty big compensation hit? mr. stumpf: again, it's what i thought was right for me to do to recommend to the board at that time, and they can do more. they have all the independence and i didn't believe that -- i thought that was the right thing for me to do. mr. guinta: what about the clawback of tolstead's pay, when did you make that recommendation? mr. stumpf: she does not report to me. that recommendation was made by her boss.

mr. guinta: when were you aware of that recommendation? before the 20th? mr. stumpf: it was sometime before the weekend. mr. guinta: before the 20th? mr. stumpf: yes. mr. guinta: do you currently have sales goals at wells fargo today? mr. stumpf: we -- end at our regional bank tomorrow. the reason we didn't take them out before -- the vast majority of our people do the exact right thing. we don't want to hurt them from a compensation perspective. we thought we would do this, you know, and do it right and put other goals like customer loyalty and other things that customers really appreciate by january 1. we now know that we can do it by october 1. so we don't want to hurt them. and we also want to make sure

our customers get treated well. mr. guinta: let me move on to the cfpb. you've been asked several times how many employees of the cfpb were embedded at wells fargo and i think you said something to the effect that you will do your best to work with us. you didn't say clearly whether you would actually provide us that number. so i'm curious, would you provide us with that number when you get it? mr. stumpf: again, i don't know that answer. i'll work with our team. the best i can do is promise you that i'll work -- consult my team. mr. guinta: i understand you don't know the number today. when you identify the number will you share it with congress? mr. stumpf: again, i don't know if that's a confidential, supervisory matter or information. mr. guinta: cfpb employees are public employees, right? mr. stumpf: i don't want to make a promise to you i can't keep. i'll promise my team will look at it.

mr. guinta: speak with your leadership and try to get us something in writing as to whether you can provide us with that answer. mr. stumpf: i'll work with them. mr. chairman: the chair recognizes the gentleman from maryland, mr. delaney. mr. delaney: thank you, mr. chairman. thank you, sir, for being here. a lot of focus has been on your cross-sells on your cross-sell culture at the institution. it's something that the institution has been very proud of. when you acquired wachovia back in 2008, your former mr. chairman, dick, who was probably the architect of your cross-sell program, said we're combining the industry's number one ranked customer service culture of wachovia. and i was a very substantial wachovia customer in my prior life in business and i had nothing but a terrific experience. mr. stumpf: thank you. mr. delaney: with the industry's number one sales in cross-selling culture of wells

fargo -- this is 2008. analyst reports across the last decade will talk about the cross-sell culture of wells fargo, but several analysts also pointed out there was risk inherent in this and in fact this culture might be undermining the customer experience, including a well-known banking analyst who said, wells fargo suggests that a successful bank is one that keeps seeking new customers and selling as aggressively as possible more products to them and not getting bogged down in customer service. so the question i have is, your board of directors -- because when you have a very large enterprise like you do, the governance process is incredibly important. did the board of directors ever discuss at the board level whether the cross-sell culture had gotten out of control at the bank? because you were clearly outperforming did the board of your peers, and you were proud of that and you bragged about it and you had a swagger about it. and the law of large numbers just leads us all to believe it's very hard to significantly

outperform your peers particularly when they're very big and also sophisticated operators like your board of directors are. did they sit around and examine whether this culture had gotten out of control, particularly after 4-5 years of having to let go so many people? mr. stumpf: you know, congressman, i don't know all of the things that our board talks about because i'm not in all the meetings but i will say this, cross-sell is our shorthand for depth of relationship. we love that. when customers do more, they get more value. it helps everyone. mr. delaney: you also make more money if you cross-sell. it's either really good for you or really good for the customer depending upon whether they needed the product or not. i'm getting at the board's responsibility because your board is responsible to make sure that you're setting the right tone at the top. mr. stumpf: correct.

mr. delaney: you're also responsible for that. i'll get to that in a second. your board is responsible for examining the practices of the bank. you are the chairman of your board. you may not be there. they have an executive session that ask you to leave. for your compensation you leave. i chaired a public company board for many years. did you ever -- did the board ever talk about whether the culture in the retail banking business and all of the accolades you were receiving for your cross-sell success and the fact that several analysts had focused on the fact you were overly aggressive with respect to this? did they actually ever ask the question, should we look into this? did they ever exercise their fiduciary responsibilities around this issue? in other words, ensuring your customers were getting an appropriate service, which they obviously weren't. mr. stumpf: yes. and the answer is yes.

they -- mr. delaney: so you can give us evidence that the board has examined this issue across the last several years? mr. stumpf: yes, i can do that. mr. delaney: did you ever give speeches that it's as important we were putting our customers' interests first as it is to achieve our cross-sell objectives? mr. stumpf: i don't recall. i give lots of speeches. i try to talk about the fact what's good for customers is good for us. i think it's really important -- because you're asking some really good questions here. that the idea that somehow having customer have more products that they don't use helps us is absolutely wrong. it only helps if they use them. mr. delaney: if they pay for them it helps you. mr. stumpf: almost all of them are free. mr. delaney: can you find that it's important as it is to achieve the sales goals for this institution? mr. stumpf: in fact, i don't know -- i can't recall all my

words but i do know this. every talk i talk about it's about customers and putting them first. mr. delaney: your largest shareholder has a famous express where he says, takes your whole -- expression where he says, it takes your whole life to build your reputation and you can lose it in five minutes. do you think you and your institution have permanently lost its reputation? mr. stumpf: we have a lot of work to do to build it back. i'm committed to all i can to make that happen. mr. hensarling: the time of the gentleman has expired. the chair recognizes the gentleman from texas, mr. williams. mr. williams: thank you, mr. chairman. mr. stumpf, just like many hardworking americans and members of this committee, i'm really angry. and i also am a customer of your bank. but i'm amazed of what you do not know about your business. i am really amazed and i've heard more i don't knows from a c.e.o. than i think i ever heard in my life. i came to congress to deregulate and because of your actions it's

really making it extremely difficult for me to advocate for main street or community banks. so i got one simple question for you. when are you going to resign? mr. stumpf: i serve at the pleasure of the board. i'm giving all my energy now to leading this company through this. mr. williams: but you can resign without the board telling you. i just wanted to know that answer. i'm also angry by a large number of wells fargo employees opened accounts without their knowledge, it's pure wrong. it's wrong. i'm angry because wells fargo agreed to pay $190 in collective fines and restitutions, which we talked about today, don't have to admit to any wrongdoing. i got news for you. people don't care about your hurt. they care about their hurt. and i'm tired of hearing about that today. i'm angry because under the

dodd-frank act, wells fargo would still be qualified for taxpayer funded bailout and i'm angry because i'm a strong supporter of banks, both big and small. but today you make it really hard. what you've done really hurt main street. and finally, mr. stumpf, i'm angry because -- i am a business owner. i own a business right now. i'm a borrower. i've been in debt more than out of debt. for 44 years i've owned my business and it sickens me that you took advantage of customers in the manner you've done. they don't make that many customers. and mr. chairman, i have also , learned -- if i've learned anything over the last 44 years it's two things. the customer is always right, and you tried to teach us your business today. we don't need to hear that. and reputation, which we already talked about, is all you have when you go to bed at night and when you lose your reputation, you got nothing. and frankly, it's going to take wells fargo a long time before they can restore customer confidence and that reputation we're talking about.

so let me start off with this. in the past, i've been part of a banking board like many have in this room. big banks, small banks. so i understand what that entails. i certainly understand the charge that is given to that board. to make the bank successful but ultimately you answer to the shareholders. but as we heard you discuss with the senate banking committee and earlier today, top executives knew about the fraud under your watch in 2013. again, as someone who sat on a board, i find it troubling that no action would be taken at all. so we established no action was taken by you or your board in 2013. but what about your outside auditors that we talked about? can you tell this committee again, and you touched on a little bit, who they were and if you advised them of this two-year-old systemic fraud? mr. stumpf: so i'll get to your question. an outside auditor is kpmg. they do a wonderful job.

this is on us. we should have done more earlier and there's no question about that. i don't in any way want to minimize whatever portion of those two million accounts were unauthorized. we take that seriously, and they are the ones we put first. mr. williams: so let me move on. as c.e.o. and chairman of the board of wells fargo, how often did you meet with your board of directors? mr. stumpf: we have eight board meetings a year. mr. williams: did anyone on your board tell you to stop the incentive program, that they didn't like it, they didn't think it is good? mr. stumpf: there is a committee of the board that it's human resources and compensation, and that's not chaired by me. i'm not a member of that committee. mr. williams: so you don't know? mr. stumpf: i do know that we have incentive programs and we have controls and we have so forth and i don't -- that's what i know about that committee and about our business.

mr. williams: did anyone on the board raise any concerns about the incentive program? mr. stumpf: there is people, as we start to understand this issues the board took direct action to make sure along with management we understood where the customer harm was and to make sure the sales process that we did not have unethical behavior going on. mr. williams: running short of time. i'm from texas. mr. stumpf: i lived in texas for six years. mr. williams: how many people in texas were affected by your mismanagement? mr. stumpf: there were -- 149,857 accounts that we could not rule out as a possibility of being unauthorized. mr. williams: thank you, mr. chairman. i yield back. mr. hensarling: the time of the gentleman has expired. pursuant to clause d-4 of committee rule 3, the gentleman from washington, mr. heck, will be recognized for an additional

five minutes upon the conclusion of the time allotted to him under the five-minute rule. the gentleman from washington is recognized. mr. heck: thank you, mr. chairman. mr. stumpf, after sitting here patiently after four hours, my takeaway, frankly, sir, is that you are in denial. i say that because i can't reconcile much of what you have said with the known fact pattern. you have said, i didn't know, in essence. you said a small dedicated part of the work force engaged in this. you said you're sorry. in fact, you said we're going to fix it. but the facts are that 5,300 of your employees were fired for inappropriate behavior. they were fired because they in effect misappropriated millions of dollars in fees without the agreement of your customers. an act which you yourself agreed with congressman duffy

constituted stealing. all this and the publicity surrounding it led to a $25 billion reduction in the market capitalization of your company. i cannot reconcile what you said with those facts and conclude -- and i can only therefore conclude that you are in denial. some here, said with several, have said you should resign. frankly, i don't personally see how you survive. i don't know this. but, i, too, have been on a board of directors and it's virtually inconceivable to me that your board of directors would see to claw back $40 billion in bonus and incentive pay without also concluding you are no longer the correct person to lead this organization. but the truth is, it's not your survival that i am concerned about. i'm concerned about your company, your bank, your institution, the 268,000 people that you employ.

more importantly, the millions and millions of depositors. i'm more concerned about the trust level in wells fargo and in the financial sector, banks and credit unions, because it is in fact vital and the heartbeat of a market-based and capitalistic economy and i'm very concerned about what you and the company have done in the way of damage to that. i'm not going to suggest that you resign. i don't think it would do any good because i think you are in denial. but i am going to remind you of some things that you have said. i know right from wrong. i try to lead with courage. i'm going to make it right. you also said that you feel privileged to lead try wells fargo. mr. stumpf: right.

mr. heck: and so this is my hope -- this is not a question. i suggest it's beyond a hope, it's a prayer, that in the quiet and solitude of your home and in discussions with your family you ask yourself -- what's in the best interest of wells fargo? what's in the best interest of wells fargo, sir, not you? i do have a quick question. i think some other people have noted that it looks like you're repeating some mistakes and in the facts of this case, consumers being pushed into products they don't want being driven by aggressive sales goals. it led to a record fine against you in 2011. in fact, in 2012, you paid violations for violating the

service member civil relief act for foreclosure of homes in violation of federal law. for foreclosure of homes and violation of federal law. i am privileged beyond measure to represent 20,000 uniformed personnel. you are under investigation again, sir, for violating the act,ce member civil relief for foreclosing on cars -- also grabbed it. we do not want men and women in uniform worrying about that when they are putting their life in harm's way. i'm going to predict you are going to pay another fine for theation of scra in millions of dollars. so rather than ask a question, i will just say, this pattern keeps her beating itself -- you pay a fine coming you promise to fix it, and then low and behold, a few years later, you are back at it, the same thing again. i like to mr. chair, yield the balance of my time to the ranking member from california.

>> thank you, mr. heck, for yielding to me. i am very pleased to work with mr. hensler today to get this hearing, but as i have sat here, recognizing the size of wells fargo, $1.9 trillion in assets 6200 bank branches, 62,000 employees. it is striking to me how huge the is paradigm also concerned , ast whether or not chairman and ceo who can really know what is going on at the bank. i am concerned about the time it

took you to know what is going on, and i am concerned that maybe you don't have a handle on your management and what the reporting process is that would make you aware of what is going on. she had fired 1000 employees for this fraud in 2011, yet supposedly it took you two years to know about what had happened. she did not tell you. andwithheld the information you indicated in her glowing retirement that she has done a great job i'm really concerned yout whether or not in fact understand that we have been sitting here fighting to dodd-frank and trying

to work out, you know, some of the problems that have been identified with dodd-frank, but you on the board of directors of the financial services roundtable, it's an advocacy group for the banking industry that has worked to defund the cfpb, hobble its structure and remove its ability to curb abusive practices. now i want to know perhaps what you think that wells fargo has been caught by the cfpb for all of this fraud and i wonder if you denounce the financial services roundtable's actions to get the cfpb. in addition to that, while we've been sitting here, i have learned that maybe not only is wells fargo too huge to manage but maybe the reason you don't know some of the details is because you also sit on a number of good boards. you sitting on the board of chevron, $375,000 in total compensation per year, and you are on the board of target, corporation, for $272,000 in

total compensation per year. you have a responsibility to them. you have a fiduciary responsibility. and in addition to that, during this hearing, bloomberg sent out an alerter you will be facing a $20 million penalty for improperly repossessing cars from members of the military. it appears the company just can't make it through this congressional hearing without us learning more and more information about what is going on that wells fargo. i appreciate your apology. i appreciate the clawback and all of that, but, mr. chairman and members who are left, i have come to the conclusion that wells fargo should be broken up. it's too big to manage. you know, i served on the conference committee for dodd frank. we talked a lot about the living wills and how to learn more about how these banks are put

together and how they operate. and of course, the five largest banks in this country have failed the living wills test, including wells fargo. and so i'm looking at living wills and the inability to pass the test. i'm looking at stress testing. i'm looking at size. i'm looking at this fraud that has gone on, and i'm worried for the whole banking community that the public will not and continue to not trust our banks who we need in this economy in order to do the business to make the economy work and run. but they're looking at us and they're saying for all of you, particularly those of you who serve on the financial services committee, you're letting us down. you're not protecting us. and so with that, mr. chairman, i'm going to be talking with you and the members to show their outrage here today and moving for to break up wells fargo bank.

mr. stumpf: may i respond? as i said before, i am sorry that we did not get this right. i take this very seriously. i am not in denial. we will get this right. we will fix this. we do a lot of things really great. california is our home state. we have been there for 164 years. we are a major employer we are privileged to serve some a great customers and we feel that the best way possible. >> the gentleman from arkansas, mr. hill will be recognized for an additional five minutes upon the conclusion of the time allotted him under the five-minute rule. the gentleman from arkansas.

>> thank you for holding this hearing. thank you for being willing to appear today. i appreciate your forthright testimony. i've been a customer of your company and i have admired your company as an example for my own businesses in the past 20 years. developing what i thought were best practices for retail bankers across the businesses i was associated with. during that time, i've recommended your company the company to do business with and a stock to own. that comes with a heavy burden. i have same knot my stomach that you probably have because in my view, as a former person who's worked in finance on and off for 35 years, this just isn't a one-off situation down in the los angeles basin that wells

fargo is struggling with. it really is a systemic, a compliance failure inside the assume principleably retail -- president clinton plea retail portion of the -- principally portion of the retail business. very hurtful for the companies -- customers who have been damaged by their reputation, their credit, potentially. including the 933 people in arkansas that have been affected by this. it resulted in four people who apparently worked for you in arkansas that were fired as a part of the sweep across your company. so you told us today about why management between you and the

branch manager were many ways. branch managers, they report to carry tolls that is been discussed today. is that generally right? >> there is any leader in her name is merrimack. she is in charge of the organization. >> did kerry report to tim sloan? >> to me until about a year ago. i don't remember the fact eight. >> the credit card issue does not report to her. consumer lending executive or community bank? >> it report some place else. >> a matrix management to the retail side. through the consumer lending channels. >> the retail bank would talk to customers and they would send the request over to the credit card where they would do the underwriting and gentlemen. all those people i named all sat on your operating committee of

management. how often does that group meet and is it by teleconference or face-to-face? >> it is largely face-to-face every monday. face-to-face. >> unrelated to the board, or to meet -- we had nine meetings in 2015. 14 meetings with the audit committee during 2015. the operating committee meets every monday. the one question i have, do you remember this being talked about at that operating level online managers bring their top concerns to you? maybe two years after this was manifesting itself? >> it was being managed within the business in 2011.

each business has their own corporate -- own compliance. out of the sales part into the lines control function and by 2012, they were -- 2013 is where we brought the corporate resources. corporate investigations, so forth. we saw a spike in that behavior. >> now your lead director is the former ceo of general mills is conducting an independent investigation and has hired independent resources. that is commenced recently? >> as i understand it, he is believed director along with the -- the lead director along with independent directors have hired counsel and are doing the investigation. >> when to expect it will finish their work?

>> i am not part of the process. they will do a full comprehensive review. >> i hope that gets released to the public once the board has seen it and reviewed it and can be posted on your website. when i was at the treasury department in the 1990's, we had a little problem with government security business. your largest shareholder, mr. buffett became the ceo of salomon brothers. they were found tilting of manipulative and the u.s. treasury market at that time. have you talked to mr. buffett about this or sought his advice? >> have talked to a lot of our investors, and i have a conversation with warren buffett. >> warren buffett in two minutes before the senate probably do id the best job on behalf of corporate america, do you remember what he said at that

time? >> something about -- i'd rather make less money if integrity, go ahead. >> i will paraphrase it. he said he wanted every employee to be their own compliance officer. he wanted every employee, everyday when they can to work to think about the actions they took on behalf of customers and read that in their own hometown newspaper written by critical journalists. he summarized it. and what i think you will be successful, he made this quote, which i think people quoted now for 25 years. lose money for the firm, and i will be understanding. lose a shred of reputation for the firm, and i will be ruthless. >> that is what i remember. i agree with him. >> that is where we are. i agree with my colleagues. this is hurting the ability of the banking industry to do consultative selling. something that we all pride

ourselves on. we seek to understand the needs of our customers and try to meet them. this damage about what has happened at wells fargo is going to hurt that effort on behalf of community banks all over the country and cause investigations of incentives fail programs and consultative selling, which is really what we are talking about. i hope we will also ask our regulators where they were at this time. the occ clearly had its needs to improve ratings for you and compliance and intensive work you are doing. i see no evidence of the cfpb taking action. the last thing i will ask you about is mr. himes talked about materiality.

in any one quarter, lawyers, bean counters, tell you what is material or what is not. you have the ability and the board has the ability to address that in the chairman's letter. you don't need a lawyer to tell you what to write. when you spend 50% in fines and penalties over three years to five years, that is material. $10 billion compared to $22 billion. that is a big. not a small bite. i am hoping your 2016, your letter to shareholders that you and your lead director will address what i think is a systemic failure in a few areas. it has tarnished this beautiful reputation of your company. i yield the balance of my time.

>> thank you. i want to follow up a little bit on the regulators. occ, roman examiners did they have at wells fargo at the time? >> i think it is around 80. >> and today at wells fargo? >> i think it is about the same. >> the federal reserve? >> i don't know. >> how about the cfpb today? >> i don't have the number. >> did they advise you not to share those numbers with congress? >> i've not spoken with them about that. >> anyone on your team? >> nobody has shared -- told me about your numbers. >> i ask that because you seem very reluctant to share the information with us as to how many examiners from cfpb were or are currently at wells fargo.

and that concerns me. >> i happen to know the occ number -- i don't know the other ones. >> the time has expired. >> gentleman from colorado, mr. tipton. >> thank you. i have a letter from someone who has never had an account with wells fargo. they had an account that was fraudulently opened, and was sent back from your compliance department, the wells fargo financial crimes manager telling someone who was not the client that he needed to be able to provide complete signed the and notarized return affidavit of identity theft, the right documentation, collection letters he may have received, verification from social security number administration , and a copy of a police report

stating he was a victim of identity fraud and a copy of his drivers license and proof of address and copy of previous bills, statements, and voices during the timeframe of fraud. he did not even have an account with you. isn't that a little burdensome? what are you doing to respond to people who have no connection with wells fargo but are now swept up in the net of the challenges that your organization has created? >> on that issue, i would like to see it so our people could take a look at it. i don't know that issue specifically. it sounds to me like identity theft by someone else, most of what we saw, and i can't say exclusively, but of the two million accounts that could not be excluded, those were accounts that people already had at the bank, and one of our bankers improperly opened a second account that our system closed. so this sounds a lot like identity theft to me. i don't know that situation in particular. i'd like to look at it.

mr. tipton: i'd like to get a personal assessment of you by you. would you label yourself as aware and engaged? mr. stumpf: i believe i am. i love this company. i've been here a long time. i spend most of my waking hours thinking about this company. mr. tipton: you know, i'd like to be able to follow up a little bit. maybe on mr. neugebauer's question, in regard to the board. you said you think about it a lot. when did you make the board aware of the issues? mr. stumpf: the board was made aware generally of issues in committees at high levels, the 2011-2012 time frame, by 2013 we had talked about maybe, i can't remember which committee it was, surely by 2014. and then when we finally connected the dots on customer harm in 2015, the board was very active on this. mr. tipton: you discovered it in 2013.

you were aware -- you were engaged. we are now in 2016. now you're rapidly starting to respond. there seems to be a little bit of a disconnect in terms of the response mechanism that you're having there. mr. hill had just brought up, and you gave a response saying you had a sense of urgency. who have you fired? mr. stumpf: we fired managers, managers, another manager. we're doing a full review of anybody who was responsible for any behavior of any kind that would not put customers first. mr. tipton: are you try be to be able to say that these were lone wolves acing independently, or were they following policies that came from the engaged urgent managers who is the c.e.o. and chairman of wells fargo? mr. stumpf: they were doing exactly the opposite of what a c.e.o. wanted them to do. everything i've talked about, everything that we train, everything that we --

mr. tipton: do you have a problem with monitoring from the top down? mr. stumpf: we should have done more. it was our monitoring that found this behavior. are we should have done more sooner. i give you that. mr. tipton: you have an infrastructure that is set up, a chain of command in terms of your organizational chart. somebody was overseeing the manager of the manager, however you want to describe. that are there going to be any consequences at that level? mr. stumpf: we're going to let the facts take us where they are , and people will be held accountable. mr. tipton: do you have a time frame for that? mr. stumpf: i don't want to make -- foreclose anything we do, to make sure we do it right and people are held accountable. mr. tipton: there was a report that came out of the "wall street journal" that said the person in charge of creating the yearly sales claim for the community banking unit didn't know that the numbers were exaggerated.

can you identify exactly, though, when you're looking at this, where the breakdown did first start? mr. stumpf: i didn't read that article. i don't know what that's referring to. i know that a lot of us, including myself, should have done more earlier. mr. tipton: thank you. mr. chairman, my time is up. i yield back. mr. hensarling: the gentleman yields back the balance of his time. the chair now recognizes the gentleman from maine, mr. poliquin. mr. poliquin: thank you, mr. chairman. i appreciate it very much. mr. stumpf, you're the c.e.o. and the chairman of the board of wells fargo, is that correct? mr. stumpf: that's correct. mr. poliquin: how long have you had that position? mr. stumpf: i was named c.e.o. in the summer of 2007. i was named chairman in the beginning of 2010. mr. poliquin: so six, eight, nine years in that, roughly, in that position. how long you have been at the bank? mr. stumpf: 35 years. mr. poliquin: you've been at the bank a long time. one could conclude, i think would you agree, you know the bank pretty well. mr. stumpf: i love this company. yes. mr. poliquin: you know what really bother me?

along with other things. is that i'm looking at this pattern of you folks ripping off your customers, getting caught, paying a fine, and doing the damn thing all over again. we just had on the board a minute ago 13 instances of this in the last six years. you're paid a total of $11 billion in settlement fines. you just stood here before us and told us several times you know the difference between right and wrong. you're the head banana over there. i look at you, i look at wells fargo. i know it's a big organization. 268,000 employees. 268,000 jobs. thank you for that, sir. you know something, i don't think management, which means

you, knows the difference between right and wrong. i'll tell who you does. the people i represent in maine. i represent 650,000 of the most honest, hardworking people you can ever find anywhere. they know the difference between right and wrong. one thing i want to throw out in your lap right now, be very clear, i don't know where this is going. but i will not support in any way, shape or form, any kind of bailout using taxpayer money for wells fargo. you're going to get through me and a lot of other people on this committee. here's what i worry about. i worry about wells fargo. you have 268,000 employees. how many attorneys you got over there? mr. stumpf: i don't have that number. mr. poliquin: more than 10? mr. stumpf: yes. mr. poliquin: more than 1,000? mr. stumpf: i don't think so. mr. poliquin: you have a lot of attorneys. i don't worry about you folks. somehow, sway, you're going to make your way through this -- some way, you're going to make your way through. this you know what i worry about? i worry about our 31 community banks, local banks in the district that i represent.

highly rural. 31 community banks, 500 branches, 9,200 employees. good paychecks, good jobs with good benefits. we also have 58 credit unions with 196 branches and 2,250 employees. these folks are relied upon in their communities. they take their paychecks and they trust the teller and they trust the bank manager. you know what happens? when this happens, it flows downhill. that's exactly what happened in the financial meltdown seven, eight years ago. all of a sudden, because of a handful of -- a small handful of big money center banks that too much risk, with a problem with the regulators, i understand this, everyone was culpable, but all of a sudden we have this very smothering set of financial regulations that are choking off home loans, mortgages for the folks in my district, they can't

get a small business loan to put enough diesel in the lobster boat. now you come along. i don't know where this is going to go. but i will tell you this. the probability will be high that your organization and the actions of you in your organization, this systemic pattern of misbehavior and gross mismanagement, and it looks like fraud, is going to find its way to the community banks and the folks that rely on them in rural maine. you ought to be ashamed of yourself. what do you tell a family, what do you tell a family that's looking to add their fourth child to their family and they need to put a new bathroom on their house in ellsworth, maine,

and they can't get a loan because of regulations and now it's going to get worse? what do you tell them? mr. stumpf: senator, i'm -- mr. poliquin: congressman. you're asleep over there. mr. stumpf: i'm so sorry, congressman. i'm sorry for what we've done. our people also live and work in these neighborhoods. in these communities. we're trying to do the right thing. mr. poliquin: you should have done the right thing during those 13 settlements, fines, call them whatever you want, over the six years, totaling $11 billion. that's the pattern that i see. mr. stumpf: there's no question that we've had a lot of settlements and every one we've learned from and we're trying to do a better job. thank you much. mr. hensarling: the gentleman's time has expired. there are no other members in the queue. i wish to thank our witness for his testimony today. without objection, all members will have five legislative days within which to submit additional written questions for the witness to the chair which

will be forwarded to the witness for his response. mr. stumpf, we will expect you and your organization to respond promptly and to fully cooperate with our ongoing investigation. without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. this hearing stands adjourned. [captions copyright national cable satellite corp. 2016] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]

then, "washington journal" is next with your phone calls. it is a the opening ceremony at the smithsonian national museum of african american history. 45 minutes, maya macguineas, president of the committee for a responsible

budget, will talk about the campaign issue in the presidential race. zirin on hown, -- partisan politics influence the u.s. supreme court. [captions copyright national cable satellite corp. 2016]] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. isit ncicap.org] >> members of congress have recessed until after election day which is 39 days away. before leaving, lawmakers were able to pass the stopgap spending measure to keep the government funded through early december and pass legislation allowing families of the victims of the september 11 terror attacks to sue saudi arabia, overriding president obama's veto of the measure. the lawmakers were unable to do anything else. some blame on a divided government with the democrat in the