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Cmte Financial Services (R)
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Hensarling Opening Statement at Wells Fargo Hearing

Washington, Sep 29 -

Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following open remarks at today’s hearing examining the opening of unauthorized customer accounts at Wells Fargo. Wells Fargo Chairman and CEO John Stumpf testified at the hearing:     We are here today because millions of Americans were ripped off by their bank and seemingly let down by their government. Fraud is fraud and theft is theft. What happened at Wells Fargo over the course of many years cannot be described any other way. In fact, a whole host of federal laws were potentially violated, including the Truth in Savings Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Electronic Funds Transfer Act, the Securities Act of 1933, the Securities and Exchange Act of 1934, and the Sarbanes-Oxley Act of 2002. All charges must be thoroughly investigated. All culpable individuals must be held accountable. And while the fine Wells Fargo will pay – roughly 3 percent of the bank’s second quarter profits – is tiny by Wall Street’s standards, the harm caused to consumers and employees is not. To the factory worker who just had her credit score dinged because of the fraud Wells Fargo perpetrated, the cost is big. To the waiter at the local diner living paycheck to paycheck who had to pay fees associated with a fraudulent account created, the cost is big. To the Wells Fargo employee with kids to support who lost her job because she refused to participate in theft and fraud, the cost is big. We will make sure those betrayed by Wells Fargo are not forgotten. It is on their behalf that our committee has launched an in-depth investigation of your bank’s practices, Mr. Stumpf. And let me be clear: today’s hearing is just the beginning of our investigation, not the end. As I speak, our committee is gathering thousands of pages of records and documents from Wells Fargo and the relevant regulators. In the coming weeks, we will be questioning Wells Fargo executives. If necessary, I will not hesitate to issue subpoenas because we will do what is necessary to get to the bottom of this. Mr. Stumpf, we don’t yet know what you knew and when you knew it, but we know it happened on your watch and we hold you accountable for the answers to how and why this happened. At last week’s Senate hearing you were uncertain of many matters. In the intervening week we trust you have checked relevant records and refreshed your recollection of events. Therefore, we expect you to provide more complete answers to the questions presented today. We need to know today exactly when and how you and other executives at Wells Fargo found out about this endemic fraud? We need to know today what you directed others to do about it when you found out? We need to know today who in management is being held accountable? What we already know is that as far back as 2009, former Wells Fargo employees starting filing wrongful termination lawsuits alleging fraudulent accounts and improper sales tactics were taking place. Approximately 5,300 Wells Fargo employees were fired over a five-year period for these improper sales practices – and perhaps up to 2 million unauthorized accounts were fraudulently opened. Based on these facts we will also be asking serious questions of our regulators. If OCC had examiners on site at Wells Fargo during the time when these fraudulent accounts were opened and the CFPB was conducting regular examinations, why did it take the LA Times to expose it? And once exposed, why did it take almost 18 months for the CFPB to initiate a “supervisory review?” It is impossible at this time, based on the information we have, to draw firm conclusions about the performance of our regulators, but all this does raise serious questions. Maybe our Federal regulators deserve a pat on the back; but maybe they deserve a swift kick on the backside. We’ll find out which. We launched this investigation because it is our job to hold both Wall Street and Washington accountable, and to protect consumers from the excesses of both. True consumer protection is the preservation of competitive, innovative and free markets that are vigorously policed for fraud, theft and deception. Mr. Stumpf, I know Wells Fargo is an iconic brand, a bank with a proud heritage. I know you have hundreds of thousands of dedicated employees who were not involved in these activities and who do good work in building their communities and serving their customers. But this sordid affair reminds me why I trust markets but not individual businesses. Mr. Stumpf, I have a mortgage with your bank. I wish I didn’t. I wish I was in the position to pay it off because you have broken my trust as you have broken the trust of millions and it’s going to take a long time to earn it back. ###