Notice by email or by letter to make sure that we know exactly and they know exactly what they opened. It seems like it took an awfully long time to impose those basic controls. I see im out of time. Thank you, mr. Chairman. Senator menendez . Thank you, mr. Chairman. Thanks for response. The letter you received asking for hearings. Mr. Stumpf, let me just say im personally appalled by the size, the scope, the duration and the impact of the scandal. And i must say that im shocked and incredibly disappointed by the response of wells fargos Corporate Executives. You and your chief Financial Officer have taken to the press and laid the blame squarely on low paid retail bank employees. While i dont excuse what they did by any stretch of the imagination, i find that despicable. Wells fargo touts to its customers that we will never put the stage coach before the horses. The bank recklessly rolled over 2 million of your customers in what is no way can be viewed other than a largescale scheme to boost, you know, your growth and whatever that meant for your shares and whatever that meant to your shareholders. You didnt fire 10 employees, right . You didnt fire 500 employees. You fired 5300 employees. Is that right . 5300 did not honor our culture. They were not located in one branch or one district. Is that right . That is correct. They were located across the country. Is that fair to say . That is fair to say. Now shouldnt the workplace actions of employees reflect the values of the institution, no matter what part of the country that theyre in . The i absolutely agree with that. Do you believe that Senior Executives like yourself are responsible for nurturing and honing a can companywide culture for your employees and your employees actions . Absolutely. So, this isnt the work of 5300 bad apples. This is the work and the result of sowing seeds that rotted the entire orchard. Through sales guides and employee training manuals, which i reviewed or more specifically demands from harddriving managers, you and your Senior Executives created an environment in which this culture of deception and deceit thrived. And yet, you know, i see this as a toxic combination of low wages. In response to senator browns question as what is an average atwells fargo made, you said between 30,000 and 60,000. How much money did you make last year . 19 million. Thats good money. Now thats good money. This is a combination of low wages punishing sales quotas and a grossly misaligned compensation throughout the banks organizational structure as is evidenced that you removed it. When you were holding these e ethics sessions did you ever specifically, seeing this information, begin to blip up on your radar screen and more specifically did you ever specifically say in those sessions we do not want to open accounts for our customers that they dont ask for . Did you specifically say that . Senator, i will get to that question. I want to go back for a second. When a team member opens an account thats not used, that does not help customer and does not help us. And the vast majority did the absolutely right thing. Did you specifically say i specifically said, yes, we do not push products. We sit down with our customer. We have a needsbased analysis and based on what we hear where the customer is in their Financial Journey we match products. Did you specifically say that, in fact, i dont want to see accounts opened for customers that they did not ask for . Absolutely. When did you say that . Ive said that many times in many town halls. Let me ask you. Miss tolsted made about 9. 1 million in salary bonus and stock awards. According to the average wells fargo banker teller average salary is 45,000 and wells fargo personal bavger is 37,560. So imagine do you know what the poverty wage is for a family of three . I do not have that in front of me. Let me share it with you. I didnt think you would. Its 24,300. For a family of three its 20,160. So imagine for a moment, youre a single parent working with two Young Children as a personal banker in wells fargo branch. Your base salary is somewhere in the 30,000 range. You have a harddriving boss breathing down your neck to meet rigorous sales quotas. You have to call into a call center when you dont meet those quotas. If you dont meet the quota one day, it gets carried over to the next day and you have a higher quota. Forget about the incentive of making more money. In essence, this is about losing your job. And you think that that environment was the appropriate environment to protect your customers and to have the culture that you portray here that wells fargo had . Senator menendez, i get your question. We have been reducing sales goals and bringing other goals into place even before we decided to get rid of the sales product goals and the vast majority, the vast majority loved love wells fargo. We go to our Retail Banking people, 15 of our people in survey its actually a census done by gala every year loved the environment in wells fargo and put the cusses first. I cant excuse the behavior of the 1,000. Its too many. But the culture is a very caring and collaborative culture. Let me ask you a final question. Hopefully the chairman will have a second round. Did you or any Senior Executive atwells fargo suffer any financial consequence as a result of whats transpired over the years . The board will take first of all to date have you suffer any financial consequences . The board has gone through and, yes, people have been held accountable. Senior executive management . Senior executive management. I would like for you to classify for me what that is. People that are in charge of risk in the retail bank. People that are in charge of sales efficacy, regional president s who dont meet their goals around proper sales. Yes. People are held accountable and they will be held accountable. Mr. Chairman, thank you for holding this hearing. And for our witness for being here today. I appreciate it. For years, people of nevada have struggled to regain what they lost in the aftermath of the housing crisis. And we all know that this housing crisis was caused by greed and excess. For too long nevada often has had the unfortunate distinction of having one of the highest rates of unemployment, foreclosures, underwater homes, homes sold at short sales and personal bankruptcies. So trust, to me, is the center point of any relationship with the business. And i assume its the same that wells fargo has broken that trust. I consistently fight to ensure nevadans retain their personal privacy so i was shocked to hear the reports. Mr. Chairman, that the employees of wells fargo opened millions of Bank Accounts and credit cards without customers consent. The alcohols directly took money from americans pockets in order to artificially inflate company quotas. Ive had a number of constituents call my office this one happened to be from henderson, nevada. Emailed me. She was affected by wells fargos tactics. She was insulted that leadership atwells fargo was unaware of these policies. Given the culture of wrongdoing that some of your employees exhibited, taking responsibility, refunding customers and conducting internal investigations should only be the first step as we plan to fix this mess. Accountability, reform and putting your customers interests first should be wells fargos top priorities. With that, mr. Stumpf, just a couple of questions. To my constituents, have a right to be insulted. Ive heard a number of comments. Probably more directed at you, that you take Sergeant Schultz position that you knew nothing as this was moving ahead, that perhaps you even took i heard this from one of my constituents, Hillary Clinton approach, what difference does it make attitude. Let me tell you why theyre talking this way about your letter to your valued customers as you tried to explain to them some of the problems. Some wells fargo customers received products and services that they did not need. You didnt tell them you were sorry in your Customers Service letter. You came to this committee and told us you were sorry but you didnt tell your customers you were sorry. Do they have a right to be insulted . Well, first of all, let me tell you, i had a number of Media Contacts last week. One broadcast in and four in print. I am sorry. I was even misquoted or misunderstood in one where i blamed team members. I dont like we dont accept behavior thats not consistent with our culture. But i do accept responsibility. And i am sorry. This letter appears that youre downplaying some of the concerns. You said some wells fargo customers. Were talking almost 2 million accounts that were opened up. Let me ask you this question. Was anybody on your board or yourself did any of you have any opened, unauthorized accounts in your names . I dont know that. Ive not seen a letter and i was not refunded any of the dollars. What would you have done if you had an unauthorized account, somebody forged your name . What would you have done about that . I have done that before where people have forged my name or stolen my identity. But, of course, i would be very disappointed and i can surely understand your con ststituenco disappointment. We have a lot of work. Nevada is a very important state to us. Weve been there a long time. I apologize to the American People and all our customers. Well make it right. Can i go back to carrie tolsted for the moment . Youre not on the compensation board. If the compensation board were to send you a recommendation to approve 100 million or compensation package for her, would you support that . You know, im not on that board and i think its probably if i could take a second, as i understand and ill get you the information about her 100 million. Its part of it is stock she has purchased in the open market or exercised and owns for a 27year career. There are some dollars that are in the money, options she has not yet exercised. Finally, there is a part of future grants that will be vesting over the number few number of years. And the board will consider all of those things. Theyll consider her entire situation in their deliberations. Would you approve that . You know, again, senator, i want to be respectful of the committee and respectful of their process and not in any way bias their decision. Mr. Chairman, my time has run up. Thank you. Mr. Chairman, senator brown thank you for having this hearing. You have done something that has never happened in the last ten years and united this committee on a major topic. And not in a good way. Credit card accounts were opened. Folks didnt know about them. There were fees charged, potentially fines charged. And if customers were aware unaware that these accounts were opened up, there must have been many instances 2 million accounts were opened up, that negative information was sent to Credit Bureaus. Is that accurate . The part thats accurate is there are 565,000 credit cards that were opened up that were never activated. About 400,000 of those have customers signatures on them. And 5. 7 less than 6 of those accounts that we opened at that time were not activated. Pretty standard industry because people might have them. Were going to go back to each one of those customers now and find out if that was a legitimate signature and open. If its not well make it right. Thats not what i asked. I asked was negative information turned into the Credit Bureaus because of these alcohols . You know, i dont know the algorithms of how i want to answer your question. I know that when a Credit Bureau is requested, it has an impact on your credit score. This is a big deal. Yes, it is. Im telling you, it is a big deal. I could ask you for the age breakdown on these 2 million accounts that were opened up, but i am telling you that if information was sent into the Credit Bureaus because of these falsely opened accounts, the impacts on this are far, far, far more than the fees or fines that could be associated with that. What is wells fargo doing about that . Or did that information not get reported to the Credit Bureaus . Well, when we pull a credit just ask me just tell me. Did the information, if there were fees and fines involved and the Credit Bureau is requested or even if they didnt, did that information get forwarded to the Credit Bureaus . Im trying to sir, im trying to work with you. Yes or no works. Yes. We pull a Credit Bureau for each one of these cards. Okay. So what is wells doing about fixing that problem . Be concise. We are calling each credit card customer to find out if this truly was a card they wanted. If they want it, we dont want to take away their credit. If they did not want it, were going to go back and make sure that its made right by the Credit Bureau and made right by the customer. And whats the timeframe for that . We already started that process. Okay. So now this took five years. Its been documented. 2011, maybe even started before that. But 2011 till fairly recently. Now, if i had had a credit card issued in the first volley and in the meantime between 2011 and now, i decide to buy a house and that information was reported to the Credit Bureau, it could make you probably could know the figure but maybe half a percent, maybe more than that. And on a 500,000 mortgage, difference between 3. 5 and 4 is 50 grand over 30 years. Whats being done about that . We will look at each one of those and determine youre going to go back in and determine, even if they didnt do business through wells, if they bought a house and what wells did impacting their Credit Rating youre going to go back and find those folks . Weve committed to go back to all of our credit card customers and find out what about the ones that got you refund all their fines. You refund all their fees. You went back to the Credit Bureau and reestablished their Credit Rating as of today. What about the folks that may have bought a house through chase and got a higher Interest Rate because of it . How are you going to find those folks . Were working on that. Ive told our people go back and make it right. And i can as we start going through that, im happy to have our team come back and report to you how well work it out. I think its really important that you understand that this is a big deal. I mean, its a big deal. I know you feel bad about it. We feel bad about it. But the truth is, theres real world implications here on young families and old families that are going to be put into a poverty situation because of this. Even though we think its just a few hundred bucks in fees. Its more than that. Much more than that. So, you found out in 2013 and i dont want to beat this horse anymore, but did you find out that they were actually setting up accounts with fraudulent signatures in 2013 . You know, i learned that some of our team members were not doing the right thing and they were opening accounts on customers and then we truncated those. If you guys knew about that, a simple edict would have been very helpful. Dont this. If you do this, youre gone. And thats we have even more than that. And what we should have done is got rid of our incentive program. The last thing its a statement and its not. 5300 people went and thats basically 1 of your workforce. Every time you say that, you give ammunition to the folks who want to break up the big banks. 5,300 people are more more people that live in most towns in mountaina. 2 Million People is twice the population of the entire state. This is a major screwup that went on for far, far, far, far too long. I think you know that. But, man, theres going to be a lot of work that has to be done to rectify the situation if it ever can be rectified. Thank you, mr. Chairman. Mr. Stumpf i want to follow up on the line of questioning that senator tester was just discussing with you. First i want to ask a couple of questions about data, basically. Consumers expect that their private information is going to be protected at their bank and not used to open an unauthorized account. Youve gone through that extensively today. Did the Third Party Analysis that you engaged in determine if these unauthorized accounts were created uniformly across the you state or were there areas in the United States where they were more heavily created . Yes. There was a more heavily bias toward the southwestern part of the country. The information i have indicates that even more specifically includes california and arizona. Would that be correct . That would be correct. I also have new jersey here on my list. Was new jersey more heavily impacted . Well, i have numbers by state. And it typically related to there was some overindexed or o over people did more wrong things. More sizes of the bank, places where it was larger and fit more the pattern of the size of those organizations in those communities. Because of that, it wasnt necessarily that the management in those communities were potentially the ones who were driving this more aggressively but simply the size of your business in those communities . Senator, it was a bit of both. All right. Thank you. Obviously, one of the questions that my constituents and constituents across the country have, am i one of those who have had an unauthorized account created in my name . Right now wells fargo is calling every customer, is that correct . We are contacting all of our deposit customers and credit incidentally, virtually all of these accounts came on the books and were closed within a 60day period. So, of the potential again, 2 million accounts that could not be eliminated i think i said that in my oral testimony. I dont know. We just couldnt eliminate them. Pwc could not. But were calling all of our credit card customers and contacting all of our deposit customers. And we have a special callin number. Were asking people to come into our banks and talk to our people. That was my next question. If theres somebody who doesnt want to wait for the call, what can they do . Theyll get a notice and say if you you can email us. Well call you, do whatever it takes to make sure that i know our study was pwc was very comprehensive. We tried to err on the side of the customer. In fa