Tags: warren buffett | wells | fargo | ceo | faith | scandal

Buffett: Wells Fargo Still 'Has My Faith,' Keeps Holding Under 10 Percent

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By    |   Tuesday, 03 October 2017 09:47 AM

Investing guru Warren Buffett said Tuesday that Wells Fargo & Co. still "has my faith" after the fake accounts fallout at the bank.

"Tim Sloan has my faith," Buffett, the chairman and CEO of Berkshire Hathaway, told CNBC. "When you find a problem, you have to jump on it."

"Somebody messed up and the job is to find out who messed up," he added in an interview on "Squawk Box."

Berkshire is Wells Fargo's largest shareholder, holding a 9.4 percent stake.

When asked whether he sold any shares of Wells Fargo, Buffett said "only enough to stay under 10 percent, which was something the Fed requires."

Buffett spoke just hours before Wells Fargo CEO Tim Sloan was to be questioned about sales practices, mischarging customers for auto insurance, and complaints about mortgage fees at the bank’s consumer lending unit.

Sloan was set to testify before U.S. senators on Tuesday.

The U.S.’s third-largest bank has yet to shake off a year-long sales practices scandal that has hammered its reputation, sparking management changes, lawsuits and government investigations, Reuters reported.

Reuters reported on Monday that the Office of the Comptroller of the Currency, the leading regulator for Wells Fargo, was considering new sanctions against the bank for customer abuses involving auto insurance and mortgage loans.

Wells Fargo reached a $190 million settlement with regulators a year ago after it said it had opened as many as 2.1 million accounts without customers’ authorization to meet internal sales target.

That estimate was raised to potentially as many as 3.5 million in August after an expanded review.

Sloan, appearing before the Senate for the first time as chief executive, is keen to reassure lawmakers that the San Francisco-based bank has moved on from the scandal and will highlight changes he has made including overhauling the structure and senior management of its retail bank.

But with the emergence of more recent problems in other products, including auto insurance and mortgages, he faces a tough task.

The stakes are high for Sloan, a 30 year company veteran. His predecessor, John Stumpf, resigned less then a month after he earlier appeared before the same committee to answer questions about the bank’s sales practices.

“We came to Congress without a good plan and all of you were right to criticize us,” Sloan said in prepared remarks ahead of the hearing.

Massachusetts Senator Elizabeth Warren, who last year accused Stumpf of “gutless leadership,” has repeatedly called on the U.S. Federal Reserve to remove 12 members of Wells Fargo’s Board of Directors.

Among those is vice chair Elizabeth Duke, a former Federal Reserve Governor who is set to take over as chair of Wells Fargo’s board at the start of the year.

Last week, Maxine Waters, the top Democrat on the House Financial Services Committee, released a staff report questioning whether Wells Fargo should be allowed to keep its federal bank charter.

The problems around auto-insurance and mortgage products emerged publicly this year.

In late July, Wells Fargo said hundreds of thousands of customers were due a refund on auto insurance that they did not need.

In late August, a homeowner sued Wells Fargo for charging too much for his fixed-rate mortgage. Wells Fargo has already said its ‘rate lock’ service is under investigation by the Consumer Financial Protection Bureau.

(Newsmax wires services contributed to this report).

© 2021 Newsmax Finance. All rights reserved.


   
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Investing guru Warren Buffett said Tuesday that Wells Fargo still "has my faith" after the fake accounts fallout at the bank.
warren buffett, wells, fargo, ceo, faith, scandal
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2017-47-03
Tuesday, 03 October 2017 09:47 AM
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