Find this information useful? YubaNet is powered by your subscription
Washington, DC August 21, 2019 – United States Senator Elizabeth Warren (D-Mass.) today sent a letter to Wells Fargo & Company requesting information about a new report that the bank kept accounts active for months after they had been closed by customers and charged customers hundreds or even thousands of dollars in overdraft fees for charges made against these “closed” accounts. Since reports emerged nearly three years ago that Wells Fargo had opened millions of fake accounts, regulators and investigators have uncovered at least a dozen incidents where the bank scammed or lied to its consumers, workers, or regulators.
According to a report last week in the New York Times, Wells Fargo routinely keeps open accounts that customers have closed after their money has been transferred out of the account, causing the account to accrue overdraft fees anytime an additional charge — even a fraudulent charge — hits the account. Affected customers can pay a heavy price — learning about the incident only after their overdrawn accounts are sent to Wells Fargo’s collections department and are reported to a national database of delinquent bank customers, which often means that a customer cannot open a new bank account anywhere. According to reports, customers who attempted to mitigate the problem with Wells Fargo employees were told “we cannot do anything.”
Wells Fargo appears to have been warned about the widespread impact of this scam on customers, but failed to take action. According to reports, the bank has received numerous complaints from customers and employees, including complaints to the Consumer Financial Protection Bureau and public comments to the “Community” section of Wells Fargo’s website and other online forums.
In her letter, Senator Warren expressed concern with this latest incident, noting that Wells Fargo had promised wholescale reform following several other incidents where the bank reportedly swindled its customers.
“These new revelations raise grave concerns that despite these assurances, Wells Fargo is still fundamentally broken and has not only continued to scam customers out of thousands of dollars with impunity, but has even targeted customers who were attempting to leave the bank — and may have been victims of previous scams — to unfairly collect one final set of lucrative fees for Wells Fargo,” wrote Senator Warren in her letter.
Senator Warren noted that Wells Fargo’s approach to closed accounts differs from other banks-which typically stop honoring all transactions on the specified account closure date-and laid out at least a dozen separate incidents where the bank scammed or lied to its consumers, workers, or regulators since 2016.
“This new report suggests that rather than truly committing itself to vital reforms, Wells Fargo is still scamming customers, charging them fees on accounts they thought were closed,” the senator continued in her letter. “This greed has boosted the company’s bottom line, but left customers with lasting negative effects.”
Senator Warren’s letter requested that Wells Fargo:
- Answer a series of questions about the latest incident by September 3, 2019;
- Provide her staff with a briefing on the matter no later than September 12, 2019;
- Waive supervisory privilege so that she or her staff can obtain information about the matter from federal regulators.
Senator Warren has led the charge to hold Wells Fargo senior management accountable since the fake-accounts scandal came to light, and has called for stronger consumer protections:
- On September 20, 2016, Senator Warrencalled on former Wells Fargo CEO and Chairman John Stumpf to resign for his rolein the fake accounts scandal. Mr. Stumpf resigned on October 12, 2016.
- On June 19, 2017, Senator Warrensent a letterto then-Fed Chair Janet Yellen urging her to remove 12 Wells Fargo board members following the fake accounts scandal.
- At a Senate Banking Committee hearing on July 13, 2017, Senator Warrenagain called onChair Yellen to remove implicated Wells Fargo board members.
- Later in July 2017, Senator Warrenrenewed her callfor the Fed to remove Wells Fargo board members after it was reported that more than 800,000 Wells Fargo customers were charged for auto insurance they did not need.
- On August 16, 2017, Senator Warrenagain called for the removal of Wells Fargo board membersamid new evidence that the bank failed to refund money owed to car loan customers, that it overcharged small businesses for credit card transactions, and that it billed certain mortgage customers for unexpected, optional services.
- On February 2, 2018, Chair Yellenannounced in response to Senator Warrenthat the Fed would freeze the growth of Wells Fargo and push out four of the board members responsible.
- In March and April 2018, Senator Warren urged Fed Chair Jerome Powell to hold a public vote by the Fed Board on lifting growth restrictions for Wells Fargo instead of delegating it to staff. She also asked for the public release of the third-party review of how Wells Fargo is implementing reforms.
- In a response to Senator Warren on May 10, 2018, Chair Powell reconsidered and announced he would require a Fed Board vote on whether to lift Wells Fargo’s growth restrictions and said he would consider releasing as much of the third-party review as possible.
- On January 17, 2019, Senator Warren questioned Tim Sloan on excessively high fees Wells Fargo charged college students.
- On April 4, 2019, Wells Fargo announced it had eliminated some of these fees associated with campus debit cards.
- On February 22, 2019, Senator Warren once again urged Chair Powell not to lift growth cap restrictions on Wells Fargo until Tim Sloan is removed from his role as CEO, citing a report revealing that, beginning in 2016, Wells Fargo employees “routinely falsified clients’ signatures and otherwise doctored paperwork” in order to comply with a legal settlement with the Office of the Comptroller of the Currency related to violations of anti-money laundering laws.
- On April 9, 2019, Senator Warren and Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) released new letters from the Fed, OCC, and CFPB in response to inquiries that they sent the regulators in March 2019. The regulators told the senators that Wells Fargo has not satisfied its obligations under existing consent orders, which require the bank to remediate customers harmed by its wrongdoing and impose reforms to end Wells Fargo’s unlawful activity.
- On April 17, 2019, Senator Warren wrote to Joseph Otting, Comptroller of the Currency, requesting information about the role that the OCC will play in the selection of a new CEO and President of Wells Fargo.
- In response to Senator Warren’s letter, Comptroller Otting confirmed that the OCC would exercise its statutory authority to review the selection of a new CEO of Wells Fargo.