Top Financial Services Dems call for hearing on growing Wells Fargo scandal
The top Democrats on the House Financial Services Committee asked the panel’s chairman on Tuesday to hold another hearing on Wells Fargo’s sale practices amid reports the bank charged more than 800,000 customers for unwanted auto insurance.
Reps. Maxine Waters (Calif.) and Dan Kildee (Mich.), the ranking and vice ranking Financial Services panel Democrats, asked Chairman Jeb Hensarling (R-Texas) to call Wells Fargo’s top executives for a hearing.
Waters and Kildee said in a letter that lawmakers should be allowed to ask Wells Fargo CEO Timothy Sloan and Chairman Stephen Sanger “about ongoing violations of consumer rights, any lessons learned from the egregious behavior of the bank’s fraudulent opening of millions of unauthorized accounts, and what concrete steps are being taken to address all of the problems that have come to light.”
The letter was also signed by Rep. Al Green (D-Texas), ranking members of the committee’s oversight and investigations subpanel.
Financial Services Committee members grilled former Wells Fargo CEO John Stumpf in a hearing in September, weeks after the bank was fined $185 million for opening millions of accounts for customers without their permission.
Lawmakers across party lines said Stumpf should face criminal charges. Stumpf announced his retirement soon after, and multiple federal and state agencies are investigating the bank’s wrongdoing.
Wells Fargo has taken extensive efforts to apologize and rehabilitate its image, but the bank has sparked numerous scandals since the Consumer Financial Protection Bureau action in September.
The bank insisted in November that customers who paid fees on unauthorized accounts must follow forced arbitration clauses written into those accounts’ contracts. Those clauses ban customers from seeking damages though joining class-action suits.
Wells Fargo also reportedly opened Prudential life insurance policies for customers without their consent, and charged auto loan customers for insurance they never purchased.
In a statement, Wells Fargo said it “understands and is committed to addressing policymaker concerns on issues with our Collateral Protection Insurance product,” and has taken steps to refund customers, end the practice and hold those responsible for it accountable.
“Customer harm is never acceptable at Wells Fargo; we are committed to fixing these mistakes and earning back trust,” Wells Fargo said.
The Financial Services Committee is also investigating the bank. Waters, Kildee and Green claimed that panel Republicans have “taken a partisan approach to this investigation thus far and [are] not utilizing the Committee’s resources and time in a bipartisan way to conduct vigorous oversight of the institution that actually harmed our constituents.”
The Democrats claimed their aides weren’t invited to a series of December interviews by Republican committee staff with top Wells Fargo executives, including Sloan, and were denied a chance to conduct their own interviews.
“If the Committee is to attempt to have a fair approach to oversight and investigations, and better understand what went wrong at Wells Fargo to prevent pervasive fraud that harms millions of consumers from ever happening again,” the Democrats wrote, “all Committee Members should be given a chance to hear directly from and question Mr. Sloan and Mr. Sanger as soon as possible.”
A spokesman for Hensarling said there was “nothing secret” about the Republican plans, and that Democrats were told of the interviews ahead of time.
“Why the Democrats never made any attempt to participate in those interviews is a mystery,” the spokesman said.
Updated at 3:24 p.m.
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