Today, in response to the announcement that the Federal Reserve Board has moved to restrict the growth of Wells Fargo until it sufficiently improves its governance and controls, and that the bank will replace three current board members by April and a fourth board member by the end of the year, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, made the following statement:
“I applaud Janet Yellen for her leadership in taking strong action to penalize Wells Fargo for its egregious pattern of consumer abuse. I am particularly pleased that the Federal Reserve Board has chosen to restrict the growth of the bank and that several members of the bank’s board will be replaced. Since 2016, I have been calling for Wells Fargo to face real penalties such as these. Such action is warranted and necessary in light of the bank’s many misdeeds, and sends a strong and resounding message to all megabanks that they must not abuse consumers.
“Wells Fargo is a repeat offender with a terrible track record of harming consumers. They have opened millions of fraudulent accounts without their customers’ consent, enrolled consumers in life insurance policies without their consent, fraudulently modified mortgages to collect government subsidies, delayed mortgage closing dates in order to charge customers additional fees, and forced nearly a million Americans to purchase auto insurance they didn't need. They deserve the punishment that they have been handed by the Federal Reserve, and more.
“In 2017, I introduced the Megabank Accountability and Consequences Act to require the federal prudential banking regulators to fully utilize existing authorities—such as the ability to shut down a megabank and ban culpable executives and directors from working in the banking industry—to stop megabanks like Wells Fargo that clearly and repeatedly engage in practices that harm consumers. I am encouraged to see Chair Yellen put some of the Federal Reserve’s existing authorities to use. We need more regulators to be willing to use all of the regulatory tools at their disposal to deal with bad actors like Wells Fargo.”
In October, Ranking Member Waters introduced the Megabank Accountability and Consequences Act, which requires federal prudential banking regulators, such as the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve Board, to fully utilize their authorities to shut down megabanks that repeatedly harm consumers and hold culpable executives accountable.
In September, Ranking Member Waters released a Democratic staff report detailing a pattern of abusive business practices by Wells Fargo and finding that prudential regulators have not utilized the full extent of their authorities to end unlawful practices at megabanks like Wells Fargo.