Cummings Issues Statement After Meeting with Wells Fargo President About Fraudulent Business Practices
Issues Letter Seeking Documents Relating to Widespread Corporate Abuses
Washington, D.C. (Sept. 13, 2016)—Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, met with Wells Fargo President and Chief Operating Officer Tim Sloan to hear about steps the company is taking to hold employees and executives accountable for opening more than 2 million unauthorized accounts and to make whole the consumers who have suffered from these abuses.
Cummings issued the following statement after meeting with Mr. Sloan:
“Wells Fargo apparently just fired more than 5,000 employees, but it is unclear whether the executives who orchestrated this scheme will be held accountable. Today, I handed the President of Wells Fargo a letter seeking documents relating to how its managers used quotas, bonuses, threats, and other punitive measures to perpetrate these abuses. I also want to know how many consumers were affected by these schemes and how many were referred to collections agencies or had their credit scores lowered because of these abuses. I commend the Consumer Financial Protection Bureau and Director Cordray for taking action to protect American consumers.”
In July, Wells Fargo announced that Carrie Tolstedt, the head of the department that opened the unauthorized accounts, will be retiring at the end of the year with a $125 million pay-out.
Last Thursday, the Consumer Financial Protection Bureau, Comptroller of the Currency, and the City of Los Angeles announced settlements with Wells Fargo revealing that employees opened unauthorized deposit accounts in consumers’ names; opened unauthorized credit card accounts; issued and activated unauthorized debit cards; and created phony email addresses to enroll consumers in online banking.
In addition, a legal complaint leading to this settlement stated: “Managers constantly hound, berate, demean and threaten employees to meet these unreachable quotas. Managers often tell employees to do whatever it takes to reach their quotas. Employees who do not reach their quotas are often required to work hours beyond their typical work schedule without being compensated for that extra work time, and/or are threatened with termination.”
The Bureau reported that approximately 85,000 deposit accounts improperly opened by Wells Fargo incurred about $2 million in unwarranted fees. Overdrafts and failures to maintain minimum balances in these unauthorized accounts also may reflect negatively on customers’ FICO and other credit scores, and these abuses may inhibit the ability of customers to open new accounts and negatively impact the manner in which they are screened by consumer reporting agencies.
Read Ranking Member Cummings’ letter seeking documents from Wells Fargo here.