March 10 (UPI) -- Wells Fargo CEO Charles Scharf told Congress on Tuesday that the bank's "broken" culture was to blame for recent scandals, and promised to put it "on sound footing."
Scharf testified before the House Committee on Financial Services about Wells Fargo officials' conduct that led to a scheme in which customers were charged for services they didn't approve. The hearing came five months after Scharf replaced interim CEO C. Allen Parker.
"Simply said, we had a flawed business model in how the company was managed," Scharf told the committee. "Our structure was problematic, and the company's leadership failed its stakeholders. Our culture was broken, and we did not have the appropriate controls in place across the company."
Wells Fargo came under scrutiny for its practices in 2015 after a lawsuit accused the company of illegal sales tactics. The lawsuit pointed to a brochure encouraging employees to make sure customers on average had eight open accounts with Wells Fargo as part of its "Going for gr-eight" campaign.
Employees created thousands of phony accounts and manipulated some real accounts to boost sales figures and earn bonuses. The bank responded by firing more than 5,000 workers and pledged to end sales goals.
Scharf told Congress Tuesday that he plans to turn the company around.
"The things that I have done since I have come to Wells Fargo are in stark contrast to how we've approached some of the issues in the past," he said.
"The sense of urgency that people are working with inside the company is very different today than it was four months ago. We've not done what's necessary to be done, but it is possible to do it."
Scharf said that shortly after taking over as CEO, he made "substantial changes" to the company's leadership and added new people to its operating committee. He said about 75 percent of the committee is new since 2018.
"While I certainly wish you luck, it is clear to this committee that the bank you inherited is essentially a lawless organization that has caused widespread harm to millions of consumers throughout the nation," she said.
Two members of the company's board of directors -- Elizabeth Duke and James Quigley -- were supposed to testify before the committee this week but resigned Monday. Waters had called on both to resign, saying that they "failed in their responsibilities" to follow orders by the Consumer Financial Protection Bureau and others.
A congressional report on the bank released this month said Wells Fargo failed to take action on fraudulent sales practices from 2009 and 2016 and when news broke about them, failed again to take to sufficiently respond to them.