Aggressive sales tactics by Wells Fargo & Co. employees led to a $185-million settlement package with federal and state regulators last week. Above, a branch in Miami. (Joe Raedle / Getty Images)
September 12, 2016
The Senate Banking Committee will hold a hearing next week on the aggressive sales tactics by Wells Fargo & Co. employees that led to a $185-million settlement package with federal and state regulators.
The decision by the panel’s chairman, Sen. Richard C. Shelby (R-Ala.), to look into the matter came Monday night just hours after five Democrats on the committee publicly released a letter to him requesting hearings.
“The magnitude of this situation warrants a thorough and comprehensive review,” the lawmakers, led by Sen. Robert Menendez of New Jersey, wrote to Shelby.
The five senators requested a committee investigation into the pressure-cooker sales practices, first uncovered by the Los Angeles Times in 2013, that pushed thousands of Wells Fargo employees to open as many as 2 million accounts that customers never wanted.
The hearing will be held Sept. 20, said Torrie Matous, a spokeswoman for Shelby. There were no further details Monday night.
The Democrats asked that the committee probe include hearings and testimony from Wells Fargo Chief Executive John Stumpf, Los Angeles City Atty. Mike Feuer as well as the heads of the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.
As members of the committee with oversight over the banking industry, “we should accept nothing less than a full and transparent explanation of what went wrong, who is responsible, how to fix it and how to prevent such fraud in the future,” the senators wrote.
In addition to Menendez, the letter was signed by Sens. Sherrod Brown of Ohio, Jeff Merkley of Oregon, Jack Reed of Rhode Island and Elizabeth Warren of Massachusetts.
A Wells Fargo spokeswoman declined to comment.
Feuer, a Democrat, said earlier Monday that he hoped that Shelby would agree to hold hearings.
“Many members of the public certainly are outraged by this and deserve to know more,” Feuer said. “This isn’t a partisan issue. It’s a consumer protection issue.”
A spokesman for the Committee for Better Banks, a coalition of bank employees, labor groups and community and consumer advocates, said the aggressive sales policies extend beyond Wells Fargo.
“We believe it’s an industry-wide problem and it needs to be addressed,” said Shane Larson, legislative director for the Communications Workers of America, a union that is part of the coalition.
Feurer said hearings could deter other financial firms from engaging in similar practices.
“I do not know if other banks have engaged in conduct like we’ve alleged here,” Feuer said. “But I do think there has been for a long time an imbalance in power between the big banks and the consumers they serve. Any time we can shine light on that, it helps.”
On Thursday, Feuer joined Consumer Financial Protection Bureau Director Richard Cordray and Comptroller of the Currency Thomas Curry to announce that they had reached settlements with Wells Fargo and hammered the bank for “a major breach of trust.”
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