Following news that Wells Fargo will be dramatically shrinking its home lending business and narrowing its focus to mortgage lending for existing customers and borrowers in communities of color, Congresswoman Maxine Waters (D-CA), the top Democrat on the House Financial Services Committee, released the following statement:
“After a string of abusive practices, years of breaking the law, and another public enforcement action announced by the CFPB last month, I am not surprised that Wells Fargo has finally come to the conclusion that I arrived at long ago: Wells Fargo is too big to manage and as a result, incapable of complying with the law. For several years now, I’ve been sounding the alarm on Wells Fargo’s egregious track record and abusive practices that have repeatedly harmed millions of consumers, including: steering borrowers of color into more costly and riskier mortgages when they could have qualified for loans on better, more affordable terms; opening millions of fraudulent accounts without a consumers’ knowledge or consent; unlawfully repossessing service members’ vehicles; and rejecting thousands of customer applications to modify mortgages, which in some cases, caused customers to lose their homes to unnecessary foreclosures. In fact, shortly after testifying before my Committee, two Wells Fargo CEOs resigned, and after I released a Committee investigation report detailing Wells Fargo’s continued failures, two board members also resigned.
“While Wells Fargo’s latest racial equity commitments may sound nice, I am deeply concerned that this amounts to little more than lip service. Time and time again, we learn about new discriminatory practices the bank has undertaken that have pushed Black and Latinx communities further away from the dream of homeownership, including denying more than half of the requests from Black homeowners to refinance their homes into historically low interest rates during the pandemic. It’s unacceptable. That’s why when Wells Fargo CEO Charles Scharf came to testify before my Committee last September, I questioned him about these troubling practices, including news that they held fake job interviews with Black, female, and other underrepresented candidates, even though there was already a White man hired to fill that spot. Unfortunately, Scharf’s responses were unsatisfactory, and proved that the bank had not taken any serious effort to prioritize racial equity, diversity, or inclusion. It is also concerning that despite Scharf’s stated commitment to end Wells Fargo’s record of consumer abuse, the megabank continues to violate the law with the CFPB finding violations continuing well into Scharf’s tenure.
“For years, repeat offenders like Wells Fargo have broken the law but see fines as just another 'cost of doing business' while they rake in billions in profits. After I highlighted existing tools regulators had at their disposal beyond fines to escalate penalties against repeat offenders, the Fed imposed an asset cap in 2018 and the Office of the Comptroller of the Currency (OCC) imposed restrictions on the bank’s mortgage servicing operations in 2021. Similarly, I was pleased when Director Chopra urged banking regulators last month to work with him to consider imposing additional limitations on the bank beyond the fines already paid and the limitations the Fed and OCC have imposed on Wells Fargo to date. These escalating penalties do have an impact, as we’ve seen with Wells Fargo’s announcement to downsize its activities. I continue to urge regulators to use the full extent of their authorities to hold all repeat offenders accountable for harming consumers. I am so proud of the work the Financial Services Committee has done, under my previous leadership as Chair, to expose Wells Fargo’s abusive practices, and rest assured, that Committee Democrats will continue this effort in the 118th Congress.”