Wells Fargo Bank is already feeling the wrath of consumers who are letting the lending giant know that the kind and scope of bogus, profit-driven consumer accounts bank employees were driven to pursue as part of their jobs is a big turn off.
New customer account openings fell 44 percent in October from a year earlier, a new report says, while account closures rose 3 percent from the previous year, the AP reported. Meanwhile, the bank saw a 50 percent drop in credit card applications with “customer loyalty” scores dropping to 52.3 percent, down more than 10 percent from a year earlier.
Instead of having sympathy for the bank and its practices, Ohio’s senior senator in Washington, Sherrod Brown (D-OH), whose history on consumer protection is legend, is going after the bank for its past practices now so Well Fargo or any other lender doesn’t engage in similar fraud practices going forward.
The ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, Sen. Brown criticized Wells Fargo for failing to answer key questions stemming from its former chief executive’s testimony in September on the bank’s unauthorized accounts scandal.
In a recent news release, Sen. Brown, who will run for a third term in 2018, released the banks responses to dozens of questions Banking Committee Democrats had posed for the record to then-Chairman and CEO John Stumpf, following his testimony before the panel on Sept. 20. The questions included at least 20 inquiries that Stumpf was unable to answer, or promised to provide more information during the hearing, as well as additional queries that emerged following his testimony, Brown’s office said.
At the same time, The Office of the Comptroller of the Currency, which oversees national banks, is imposing tighter restrictions on Wells Fargo & Co., requiring the banking giant to get advance approval from regulators before making a wide range of business decisions. According to the AP, OCC will require the bank to get prior approval before making changes in its board of directors and senior executive officers and also before making “golden parachute” payments to departing executives.
Wells Fargo has agreed to pay $185 million in fines to settle charges involving unauthorized customer accounts. OCC’s action diverts from that agreement negotiated with the bank in September.
In a statement, Sen. Brown said, “It seems unlikely that Wells Fargo can restore the trust of its customers if it continues to ignore or dodge basic questions about the causes and consequences of the fraud that it permitted for years.” Sen. Brown added that the bank’s illegal actions and its continued stonewalling show why so many hard-working Americans believe the system is rigged against them in Wall Street’s favor. “This issue isn’t going away and I will do everything in my power to make sure the Banking Committee keeps pushing to get to the bottom of it, so we can protect customers from being cheated again.”
Sen. Brown’s office supplied reporters with key questions Wells Fargo either ignored or did not answer sufficiently.
- The precise dates of when Stumpf, Wells Fargo’s board of directors, and Carrie Tolstedt, who led the firm’s community banking unit, learned that thousands of the bank’s employees were defrauding customers nationwide. (Questions 1-2, 9-11)
- Email and other correspondence between Stumpf, Tolstedt, and the board related to the fraud. (Questions 12, 15, 16)
- Information about whether the bank referred personnel to law enforcement. (Question 19)
- Whether Wells Fargo has instructed Transunion, Equifax and Experian, and any other credit bureaus, to determine and remediate any possible harm resulting from the opening of, and activity on, unauthorized credit cards. (Question 41)
- Board or Compensation Committee minutes describing (1) discussion of the pending Wells Fargo settlement and any impact it had on Tolstedt’s decision to retire, (2) discussion of termination or any other penalty for Tolstedt in relation to her role in the Wells Fargo actions that resulted in the [Consumer Financial Protection Bureau] settlement; (3) the impact of Tolstedt’s decision to retire on her final compensation. (Question 45)
- Whether Wells Fargo will commit to permitting customers to bring disputes related to these actions in court, rather than forcing them into arbitration. (Question 58)
Sen. Brown was joined in his effort by 10 other Democrats on the Banking Committee: Jack Reed (D-RI), Charles E. Schumer (D-NY), Bob Menendez (D-NJ), Jon Tester (D-MT), Mark Warner (D-VA), Jeff Merkley (D-OR), Elizabeth Warren (D-MA), Heidi Heitkamp (D-ND), and Joe Donnelly (D-IN).