Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, released the statement below following news that the Consumer Financial Protection Bureau (CFPB) ordered Wells Fargo Bank to pay $3.7 billion for widespread consumer fraud and abuse.
“I am very pleased that the Consumer Financial Protection Bureau, under the leadership of Director Rohit Chopra, has cracked down on Wells Fargo’s ongoing pattern of repeated violations with serious penalties for harming more than 16 million consumers beginning more than a decade ago and continuing up until this year. The CFPB’s order lists numerous violations, including shoddy auto loan servicing resulting in excessive fees or even wrongful vehicle repossessions, for which the bank had to provide $1.3 billion in remediation to over 11 million harmed consumers. Wells Fargo also denied thousands of struggling homeowners a mortgage modification, sometimes resulting in wrongful foreclosure. The bank also inappropriately charged surprise overdraft fees and froze more than 1 million accounts, preventing consumers from accessing their own funds, perhaps when they urgently needed it. In total, Wells Fargo is required to pay $2 billion in redress to harmed consumers, in addition to $1.7 billion in penalties, and it is also required to take specific steps to curb their behavior, including halting surprise overdraft fees and using alternative measures when fraud is suspected instead of fully freezing accounts.
“As Chairwoman of the Committee on Financial Services, I have sounded the alarm about repeat offenders like Wells Fargo. I have held multiple hearings to force Wells Fargo’s CEO and other megabank CEOs to answer to the public for their actions. I am disturbed by the fact that some violations in this order occurred or continued since September 2019 when Wells Fargo came under new leadership, which leads me to believe that much, much more needs to be done to rein in Wells Fargo.
“Furthermore, I remain concerned that the standard fines repeat offenders have been slapped with in the past amount to the cost of doing business while they rake in profits. Accordingly, I am pleased that Director Chopra said that the CFPB’s announced penalties were just a first step, and that regulators should consider imposing additional limitations on the bank beyond the asset cap imposed by the Fed in 2018. Similarly, I have proposed legislation, the “Repeat Offenders, Megabanks, and Credit Bureaus Accountability Act,” to require, among other things, an interagency, strategic approach on how regulators should deploy their existing authority to escalate enforcement actions, beyond the typical fines, to hold repeat offenders like Wells Fargo accountable.
“At a time when the fundamental structure of the CFPB and the validity of its regulations are being challenged by a radical opinion from the Fifth Circuit Court, today’s announcement from CFPB reminds us of the importance of CFPB in protecting consumers across the country. I applaud Director Chopra for this action and I look forward to other regulators joining him to take further actions to hold Wells Fargo accountable.”
On September 29, 2017, Chairwoman Waters released a staff report detailing a pattern of abusive business practices by Wells Fargo and finding that prudential regulators have failed to utilize the full extent of their authorities to end unlawful practices at megabanks like Wells Fargo.
On February 2, 2018, Chairwoman Waters released a statement after the Federal Reserve, under then Chair Janet Yellen’s leadership, ordered that Wells Fargo keep its total assets below $1.95 trillion until the bank improved its governance and risk controls.
On March 12, 2019, the full Committee held a hearing entitled, “Holding Megabanks Accountable: An Examination of Wells Fargo's Pattern of Consumer Abuses.” The day after the hearing, there were reports that Wells Fargo’s board had awarded Mr. Sloan with a pay increase and a $2 million dollar bonus. Chairwoman Waters immediately called on Mr. Sloan to step down, and he resigned a couple of weeks later.
On March 4, 2020, the Committee released a staff report on Wells Fargo. Elizabeth Duke and James Quigley of Wells Fargo’s boards of directors both resigned in the wake of the report’s release.
On March 10, 2020, the Chairwoman sent a letter to the Department of Justice to alert them of a potential violation of the federal criminal statute prohibiting false statements to Congress.
On March 10, 2020, the full Committee held a hearing entitled, “Holding Wells Fargo Accountable: CEO Perspectives on Next Steps for the Bank that Broke America’s Trust.”
On March 11, 2020, the full Committee held a hearing entitled, “Holding Wells Fargo Accountable: Examining the Role of the Board of Directors in the Bank’s Egregious Pattern of Consumer Abuses.”
On May 27, 2021, the full Committee held a hearing entitled, “Holding Megabanks Accountable: An Update on Banking Practices, Programs and Policies.”
On September 22, 2021, Fed Chair Powell said that the asset cap would remain until the bank fixed its “widespread and pervasive” problems suggesting that Wells Fargo has a long way to go before it would be allowed to expand.
On June 29, 2022, the Chairwoman sent a letter to regulators, calling on them to hold Wells Fargo accountable for continued, troubling patterns and practices of anti-consumer behavior.
On September 21, 2022, the full Committee held a hearing entitled, “Holding Megabanks Accountable: Oversight of America’s Largest Consumer Facing Banks.”
On December 14, 2022, the full Committee held a hearing entitled, “Consumers First: Semi-Annual Report of the Consumer Financial Protection Bureau,” and one of the bills considered during the hearing is a discussion draft sponsored by Chairwoman Waters entitled, the “Repeat Offenders, Megabanks, and Credit Bureaus Accountability Act.”
###
