From what we can gather, Wells Fargo CEO Tim Sloan walked into the Senate Banking Committee hearing room this morning anticipating a back-and-forth conversation with politicians about how things have improved at the scandal-plagued bank since he took over last October.
If this is true, Wells Fargo CEO Tim Sloan might be insane.
Since he took over, Wells has admitted that the mindbogglingly pervasive opening of fake accounts was actually even worse, used forced arbitration to rectify lawsuits with angry customers, copped to systematically overcharging customers for car insurance, and then found even more fake accounts. All in all, Sloan's year at the helm has been less about cleaning up a mess that inherited as much as it's been about realizing the depth of the mess that was made during his 30 years as a Wells Fargo executive.
But judging from his level of preparedness for the verbal curb-stomping he received on Capitol Hill today, Tim Sloan thinks that The Stagecoach is rolling forward in truth and light under his leadership. The Senate Banking Committee clearly did not agree.
After taking it on the chin from the committee chairman, Mike Crapo, Sloan took it in the rest of his face from vice-chairman Sherrod Brown. In fairness, Brown is a virulent anti-Wall Street progressive who lives to feast on the flesh of guys like Tim Sloan, but he wasn't even the committee member who asked "What in God's name were you thinking?"
That rhetorical query came from the thin pale lips of John Kennedy, the archconservative - and incongruously old - freshman senator from Louisiana. Luckily, Kennedy didn't seem to have even a child's grasp of the Wells Fargo scandal, so Sloan had a chance to collect himself before the main event commenced.
As is now Senate Banking Committee tradition, a cold breeze swept through the chamber as Crapo looked down at his notes and an anticipatory silence gripped the room. Some close to the member's entrance heard a whistling tune echo down the hallway and the voice of a terrified young Senate staffer yell "Warren comin'!" before the door swung open and Elizabeth Warren strode in bearing a manila folder...and a tacit promise of whooping dat ass.
And Warren did not disappoint in putting a show. While her routine of righteous anger pitched immediately to 11 has begun to feel tired and preachy, it seemed to fit the tenor of the room. It also played beautifully against Sloan's bizarre lack of preparation and sniveling attempts at painting himself as a victim of persecution.
After mentioning that Sloan has spent three decades at the bank and personally owns millions of shares in Wells Fargo stock, Warren proceeded to use the CEO's own past comments against him like a schoolyard bully punching an emotionally broken asthmatic kid in the face with his own fist:
WARREN: Well, here are the transcripts from all of the investors' earnings calls that you participated in from 2011 to 2014. I've read through them and on these calls no one, not even John Stumpf who was the CEO at the time, bragged more about Wells Fargo's ability and commitment to open new accounts for existing customers. In the April, 2011, call for example, I think I've marked that one, you said, 'I can't wait to get a credit card in every one of our credit worthy customer's wallets.' Nothing about whether your customers wanted or needed a Wells Fargo credit card. All that mattered was opening new accounts. So while you were bragging to investors, about opening new accounts on these calls, from 2011 to 2014, you also personally owned roughly 2 million shares of Wells-Fargo stocks. Is that right?
SLOAN: Senator, I don't recall how much stock I owned in Wells Fargo. I'm a very proud shareholder.
WARREN: Well, it's actually in your SEC filing.
It somehow got worse from there.
After a few minutes of back and forth, Sloan was somehow incapable of producing a soundbite decrying Wells Fargo's notoriously aggressive sales culture, leaving an argumentative hole wide enough for Warren to drive a truck of populist rage through...
"Mr. Sloan, you were asked about pressure on employees, which caused the fake accounts scandal. We all know that now -- it's public. You knew there was a problem, and when you were asked about it, you lied. This is about personal responsibility. Wells Fargo cheated millions of people for years. The Federal Reserve should remove all of the current board members who served during the fake account scandal. And Mr. Sloan, you say you've been making changes at Wells Fargo for 30 years, but you enabled this fake account scam, you got rich off it, and then you tried to cover it up. At best, you are incompetent. At worst, you are complicit. Either way, you should be fired. Wells Fargo needs to start over and that won't happen until the bank rids itself of people like you who led it into this crisis. Thank you, Mr. Chairman."
Sloan attempted to respond, but his vanilla platitudes were hard to hear over the sound of Warren's dropped mic rattling around the brains of everyone watching.
What made the whole thing truly mesmerizing was that Elizabeth Warren wasn't even on the top of her game, and her criticisms of Sloan were borderline unfair. Sloan is allowed to own huge amounts of Wells Fargo stock and his job is to make that stock grow in value. It's also hard to prove that Sloan was involved in anything that directly led to Wells' opening of fake accounts, and the argument could easily be made that only a person intimately familiar with the bank can fix its systemic problems.
But Sloan got his ass handed to him anyway because he was unprepared for Elizabeth Warren, which is staggering since Warren's rhetorical arsenal consists of literally one move. Essentially, Tim Sloan walked into a bear cave fully prepared to fucking cuddle.
And we know that because he told CNBC as much:
Sloan said he didn't understand why the committee spent "as much time" as they did on his past before he was CEO. "The focus on the hearing was Wells Fargo, one year later, and I don't really understand why we spent as much time as we did talking about history."
If that's really true, Tim Sloan has a tenuous grasp on reality and probably needs to step down as CEO of Wells Fargo.