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Democrats say Wells Fargo probe ‘far from over’

Democrats on a congressional committee have accused Wells Fargo of stonewalling them as they investigate the US bank over sham customer accounts, hinting they may intensify their probe as a result.

In a letter on Friday to Wells’ chief executive Tim Sloan, the party’s most senior member of the House financial services committee complained the bank had yet to agree to put forward executives for interviews despite repeated requests.

“Your failure to agree to participate . . . [tells me] that this committee’s investigation is far from over,” wrote Maxine Waters. “If this is indicative of how Wells Fargo responds to its customers, I can understand why so many of them are upset with their treatment.”

The intervention highlights the political risks still facing Wells, six months after it emerged that thousands of its employees had set up bank accounts and credit cards without customers’ consent. Branch staff in some cases forged signatures to meet internal sales targets.

The investigation by the financial services committee — chaired by the Republican Jeb Hensarling — is one of several into the bank, including probes from the Securities and Exchange Commission and the Department of Justice.

The committee has already extracted a price from Wells. In a blistering hearing on Capitol Hill at the height of the crisis in September, members grilled its former chairman and chief executive John Stumpf for four hours. He stood down two weeks later.

If this is indicative of how Wells Fargo responds to its customers, I can understand why so many of them are upset with their treatment

Mr Stumpf’s successor, Mr Sloan, along with the bank’s chief financial officer, chief risk officer and general counsel, has conducted unrecorded interviews with the committee’s Republican staff.

But in her letter, Ms Waters complained that the bank was not responding meaningfully to requests to take part in a similar exercise with Democrats — even though Mr Sloan had personally assured her he would look into the matter.

She added: “I have seen Wells Fargo’s television advertisements pledging that you are ‘making changes to make things right’. I am not convinced.”

In response, Wells said it had “fully co-operated” with the committee’s investigation — including producing more than 140,000 pages of documents and answering more than 50 written questions. “We are committed to providing the committee what it needs.”

The letter draws fresh, unwelcome attention to Wells Fargo in a week when it has also been criticised for a disclosure that it paid Mr Sloan $12.8m for his work last year — 17 per cent more than a year earlier.

The bank said the pay deal reflected his promotion to president and chief operating officer — before he was promoted, again, to chief executive.

Damage done by the scandal has taken a toll on the bank’s performance, although Mr Sloan told the Associated Press on Friday that after several months of drops in the number of customers creating Wells accounts, the declines had bottomed out.

Yet he cautioned that the bank may need several more months to compensate victims. In particular, he said, it was difficult to establish the impact on customers whose credit scores had been hurt because of the bogus accounts its employees created.

He said: “I will describe it as more complicated than anyone could have imagined, but that’s not an excuse.

“It’s going to take a few more months to work through. But I assure you we will remediate all those customers.”

Via FT