After their August break, Senate and House lawmakers want top Wells Fargo execs to come clean about the “never-ending developments” regarding the bank — including the news that more customers were duped than previously thought in the fake-accounts scandal.
Both Sen. Elizabeth Warren, D-Mass., and Rep. Maxine Waters, D-Calif., recently called on the chairmen on the Senate Banking and House Financial Services committees to hold hearings in September with Wells Fargo CEO Timothy Sloan and Chairman Stephen Sanger as witnesses.
In their letter to Senate Banking Committee Chair Mike Crapo, R-Idaho, Democrats noted a series of “significant developments” related to the bank's misconduct that have emerged in the 10 months since former Wells Fargo CEO John Stumpf testified before the committee.
This includes information suggesting that more customers were affected by the fake accounts scam; that the bank signed up customers for insurance products and applied fees without authorization; and that the bank may have retaliated against employees.
“Many committee members have sought additional information from Wells Fargo about these developments, with varying degrees of success,” the Democratic senators wrote. “A hearing would give members the opportunity to hear directly from the bank's top leadership about these developments.”
Waters, ranking member of the Committee on Financial Services, along with Rep. Daniel Kildee. D-Mich., and Rep. Al Green, D-Texas, told House Financial Services Committee Chairman Jeb Hensarling, R-Texas, to hold a hearing to review “the ongoing violations of consumer rights by Wells Fargo.”
The letter follows Wells Fargo’s continued egregious behavior toward consumers, including reports that the bank forced more than 800,000 car loan borrowers to purchase unnecessary car insurance.
“[T]here have been seemingly never-ending developments about additional customers who have been harmed in a number of ways by the bank that clearly warrant committee scrutiny,” the lawmakers wrote. “Furthermore, it was appalling to see reports that Wells Fargo went to court to enforce the forced pre-dispute arbitration clauses for customers who had fake accounts set up in their name to prevent them from seeking the redress they deserve through our judicial system.”
Senate Democrats said they want the Senate Banking Committee hearing to also address the ongoing debate in Congress over the Consumer Financial Protection Bureau’s new rule making it easier for customers to join class action suits against financial services companies.
“Republicans have said that the CFPB rule could harm consumers. Wells Fargo has reportedly used forced arbitration clauses to prevent customers from suing in court for damages arising from the creation of fake accounts in their names,” the senators said.
A hearing, the senators argued, “would allow the Committee to obtain more information about this prominent use of forced arbitration clauses.”
Waters said that Sloan has yet to respond to her March letter regarding the refusal of Wells Fargo executives to be interviewed by Democratic committee staff regarding the bank's fraudulent account scandal.
--- Check out Wells Fargo Says It May Find ‘Significantly’ More Fake Accounts on ThinkAdvisor.