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Senate Dems’ bill would let Wells Fargo customers sue

Greg Nash

The top Democrat on the Senate Banking Committee will introduce a bill to meant to let millions of Wells Fargo customers sue the bank for opening unauthorized bank accounts in their names.

{mosads}A bill from Sen. Sherrod Brown (D-Ohio) would target language in bank contracts that requires customers to opt for out-of-court settlements, called “forced arbitration” clauses. 

Brown’s bill would prevent banks from using the clauses to avoid lawsuits related to the fake accounts, he announced Monday.

A pending rule from the Consumer Financial Protection Bureau (CFPB) will focus on arbitration clauses in future contracts, but Brown’s bill would focus on contracts already signed.

“Secret arbitration proceedings allowed Wells Fargo to get away with this fraud for far too long already,” said Brown in a statement. “Giving customers back their right to take Wells Fargo to court gives them the power to ensure they are made whole and helps prevent cases like this in the future.”

Brown’s pending bill is part of an onslaught of bipartisan criticism facing Wells Fargo following a record $100 million fine from the CFPB. 

Wells Fargo created nearly 1.5 million bank accounts and opened 500,000 credit cards for customers without their approval. The bank fired 5,000 managers and employees in response.

Lawmakers blamed the fraud on Wells Fargo CEO John Stumpf and executives for creating a high-pressure environment with unrealistic sales goals. Democratic lawmakers held up Stumpf as an example of Wall Street greed, while Republicans said Wells Fargo undermined their push to deregulate banks. 

Lawmakers from both parties have called for Stumpf’s resignation, and some suggested he should face criminal charges.

Brown’s bill will be introduced when Congress returns after the November elections. 

Tags Sherrod Brown

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