Five Senate Democrats are calling for hearings to investigate the actions of Wells Fargo employees who created millions of fake bank and credit card accounts to boost their sales.
Led by Sen. Robert Menendez (N.J.), the Democrats sent a letter on Monday to Senate Banking Committee Chairman Richard Shelby (R-Ala.) urging him to hold immediate hearings to delve into what happened at one of the nation’s largest banks and to determine whether more consumer protections are needed.
{mosads}“The magnitude of this situation warrants thorough and comprehensive review,” the senators wrote in the letter.
The senators said that the committee needs to look at a wide range of issues in the matter including how the employees could get away with opening the accounts and whether the bank’s sales and compensation structure provided incentives to employees to engage in deceptive and abusive practices.
Along with Menendez, Sens. Sherrod Brown (Ohio), Jack Reed (R.I.), Elizabeth Warren (Mass.) and Jeff Merkley (Ore.) — all members of the banking panel — signed the letter.
“We should accept nothing less than a full and transparent explanation of what went wrong, who is responsible, how to fix it, and how to prevent such fraud in the future,” the senators wrote.
The senators told Shelby they want to question Wells Fargo’s CEO, John G. Stumpf, as well as Los Angeles County Attorney Mike Feuer, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray and Comptroller of the Currency Thomas J. Curry.
The CFPB last week announced a $185 million fine for Wells Fargo, including a $100 million penalty paid to the CFPB’s civil penalty fund — the largest fine ever levied by the regulator.
More than 5,000 Wells employees secretly set up more than 2 million deposit and credit card accounts that weren’t authorized by consumers, according to the bank’s own analysis.
That includes about 1.5 million deposit accounts and 565,000 credit card accounts.
Wells Fargo said it has refunded $2.6 million to affected customers for monthly maintenance fees, insufficient fund fees, overdraft charges and other fees paid.
The employees opened unauthorized deposit accounts for existing customers and transferred funds from their authorized accounts, submitted credit card applications, enrolled customers in online banking services and email notifications and ordered and activated debit cards.
More than 5,300 Wells managers and employees were fired for their actions, representing about 1 percent of the 100,000 people who worked in their branches over the five-year period involved, a bank spokeswoman said last week.