Wells Fargo CEO: 'Sorry' but it wasn't a 'scheme'

WASHINGTON—Wells Fargo CEO John Stumpf is expected to apologize on Tuesday for the bank's opening of millions of secret accounts without customers' permission but will also argue that it was not part of an "orchestrated" scheme.

Stumpf, who is set to testify at 10 a.m. before the Senate Banking Committee, will say that the company has implemented measures to overhaul the sales culture that produced more than 2 million fake accounts, according to a copy of his prepared remarks provided to USA TODAY.

"I am deeply sorry that we failed to fulfill our responsibility to our customers, to our team members, and to the American public," Stumpf said. "I have been with Wells Fargo through many challenges — none that pains me more than the one we will discuss this morning."

The company has come under fire for providing incentives to retail bankers to "cross-sell" products to its customers, which critics say encouraged employees to open accounts without permission to meet aggressive internal targets.

Stumpf defended the company's cross-selling strategy, saying it fosters "deep relationships" that bolsters the company and helps customers "succeed financially."

"I do want to make very clear that there was no orchestrated effort, or scheme as some have called it, by the company," he said. "We never directed nor wanted our employees, whom we refer to as team members, to provide products and services to customers they did not want or need."

Wells Fargo agreed to a $185 million penalty as part of a civil settlement announced Sept. 8. It has acknowledged unauthorized accounts were opened from 2011 through 2015, racking up $2.6 million in fees that have since been refunded to affected customers.

The company has fired some 5,300 employees, or about 2% of its current workforce, over the fake accounts and has eliminated quotas for bankers, branch managers and district managers starting Jan. 1.

"Wrongful sales practice behavior goes entirely against our values, ethics, and culture and runs counter to our business strategy of helping our customers succeed financially and deepening our relationship with those customers," Stumpf said. "That said, I accept full responsibility for all unethical sales practices in our retail banking business, and I am fully committed to doing everything possible to fix this issue, strengthen our
culture, and take the necessary actions to restore our customers’ trust."

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.