Wells Fargo chief found wanting as U.S. lawmakers seek his resignation, dismantling bank

WASHINGTON, U.S. - Disgraced Wells Fargo & Co CEO John Stumpf on Thursday found himself amid mounting attacks by U.S. lawmakers, who called for his resignation and proposed splitting the bank into smaller units for better management.

Members of the House Financial Services Committee repeatedly attacked Stumpf over the bank’s sales practices, and said the San Francisco-headquartered lender had damaged customer trust as well as the broader banking system.

The staff of Wells Fargo opened checking, savings and credit card accounts without customer authorisation for years to give in to managers' demand for new business, as per a $190-million settlement with regulators reached early this month.

The bank has revealed it opened as many as 2 million fake accounts and fired 5,300 workers since 2011.

U.S. Representative Maxine Waters faulted the bank for identity theft and called for Wells Fargo to be dismantled because "it was too big to manage.”

The committee's senior Democrat dubbed the sales abuses "some of the most egregious fraud we have seen since the foreclosure crisis." After the hearing, the lawmaker said she would introduce legislation to break up Wells Fargo.  

The scandal has triggered lawsuits, further investigations and erased more than $20 billion from the bank's market value.

Jeb Hensarling, the Republican chairman of the committee, said in his opening statement he had lost faith in the bank. 

"Mr. Stumpf, I have a mortgage with your bank," Hensarling said. "I wish I didn’t. I wish I was in the position to pay it off because you have broken my trust as you have broken the trust of millions.”

Stumpf, in the face of a hostile audience, said, "I recognise we could have done more earlier. I try to lead with courage and conviction, but of course we make mistakes.”

He said Wells Fargo was bolstering oversight of sales tactics, altering procedures for issuing credit cards and had paid back past and current customers for any fees incurrent on the phantom accounts.

The House committee is in pursuit of thousands of pages of documents, and plans to interview Wells Fargo executives going ahead.

"I will not hesitate to issue subpoenas. We will do what is necessary to get to the bottom of this," Hensarling added.