Wells Fargo CEO says government not paying federal workers is "completely embarrassing"
The government shutdown hit day 35 on Friday, marking the second missed paycheck for federal workers, many of whom are now facing dire financial situations. Wells Fargo CEO Tim Sloan told "CBS This Morning" on Friday it's "completely embarrassing" that the U.S. government isn't paying its workers.
Sloan estimated that 750,000 of his customers have been affected by the shutdown, based on the number that receive a direct deposit from the federal government.
"When they stopped receiving their first check a few weeks ago we began to waive all their overdraft fees, waive any sort of late fees. That's totaled now about $3 million," Sloan said.
Sloan added that the company is deferring any types of loan payments for customers affected by the shutdown, which he said includes about 14,400 people right now.
Credit unions like Navy Federal Credit Union, USAA and U.S. Employees Credit Union are offering special loans to furloughed federal workers. The Congressional Federal Credit Union, for example, offers a line of credit with a rate of zero percent for the first 60 days.
Sloan would not say definitively whether his company is also considering offering low- or no-interest loans.
"We're considering all options," he said. "First and foremost, we're focused on how to help them in the moment, which is they shouldn't have to pay overdraft fees and they've got loan payments that they're worried about. So the 14,000 customers that have called us, that's what they're focused on. That's what they need help on. And that's what we're going to focus our efforts."
Wells Fargo has been plagued by scandal in recent years, including an error affecting hundreds of customers who lost their homes to foreclosure and revelations in 2016 that employees opened millions of accounts without customers' permission. Sloan addressed the fake account scandal, saying "we've made significant changes in the company."
"What happened was that we had an incentive plan in our retail business that encouraged our team members to sell products over providing the right advice and service. That should not have happened," he said.
Sloan testified in front of the Senate Banking Committee in 2017, apologizing for those sales tactics and promising to do better.
Asked what that "better" looks like, Sloan said, "Well, all of those items that you mentioned, which shouldn't have happened, by the way, were items that we found and were part of the promise that I made to all of our stakeholders which is that we're going to open every drawer, look under every rock at Wells Fargo. If we find something, we're going to fix it. We're going to change whatever the process was that wasn't working. We're going to make it right by our customers."
Wells Fargo also announced Friday that it's pledging another $3.25 million to help residents affected by the devastating Camp Fire, which virtually wiped out the town of Paradise, California, in November. The money will provide housing assistance and other aid to residents, small businesses and nonprofits in Butte County.
