Rep Cmte Financial Services

Internal Documents Withheld from Committee Show CFPB Rushed to Settle Case Against Wells Fargo Without Investigation

Washington, Sep 19 -

The House Financial Services Committee released a second interim staff report on its investigation into the Wells Fargo fraudulent account scandal and the Consumer Financial Protection Bureau’s (CFPB) enforcement action on the matter.

An internal CFPB “Recommendation Memorandum” for the Director – improperly withheld from the Committee for over a year – reveals the Bureau failed to fully and adequately investigate Wells Fargo.  Instead, the Bureau rushed to settle with Wells Fargo for less than 1 percent of the Bureau’s own estimate of the bank’s statutory civil monetary penalty.  

Not only does the Recommendation Memorandum fail to justify the CFPB’s settlement, it calls into question the accuracy of CFPB Director Richard Cordray’s testimony before Congress and his claims that the Bureau had conducted an “independent and comprehensive investigation.”

“The CFPB’s handling of this matter and its refusal to fully comply with the Congressional subpoena are a slap in the face to millions of Americans who were harmed by Wells Fargo and further evidence of the CFPB’s unaccountable structure and leadership.  The premature suspension of its investigation means that the CFPB also potentially lost the opportunity to discover recently revealed instances of further consumer harm,” said Chairman Jeb Hensarling (R-TX).

Rep. Ann Wagner (R-MO), Chairman of the Oversight and Investigations Subcommittee, said, “Today’s report confirms what everyone already knew -- the CFPB lacks accountability and oversight.  While everyday Americans suffered at the hands of Wells Fargo, Director Cordray evaded the truth before Congress and the CFPB settled for pennies on the dollar after being caught asleep at the wheel. Additionally, this second Interim Majority Staff Report confirms that the CFPB is willfully obstructing this Committee from conducting our oversight responsibilities.”

Regrettably – as with the first interim staff report, which was released earlier this year – the Committee remains unable to complete its investigation of the Wells Fargo fraudulent account scandal because Director Cordray remains in default of the Committee’s April 2017 subpoena.

Background and Summary:

NOTE:  To read the second interim staff report, click here.  To read the supporting documents, click here.