Today, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee, gave the following opening statement at a hearing entitled, “Holding Megabanks Accountable: An Examination of Wells Fargo's Pattern of Consumer Abuses” with Timothy Sloan, President and Chief Executive Officer of Wells Fargo and Company.
As Prepared for Delivery
Today, we examine Wells Fargo’s egregious pattern of consumer abuses.
Our witness today is Mr. Timothy Sloan, President and Chief Executive Officer of Wells Fargo and Company. I would like to begin by recounting some of Wells Fargo’s recent harmful actions that we are aware of.
Between 2011 and 2016, Wells Fargo fraudulently opened millions of unauthorized accounts, costing their customers millions of dollars. In September 2016, the Consumer Bureau, the Office of the Comptroller of the Currency (OCC), and the Los Angeles City Attorney imposed a collective $185 million fine.
From 2006 to 2016, the bank charged servicemembers illegal fees, failed to disclose their active duty status in eviction proceedings, and unlawfully repossessed their vehicles, resulting in a $20 million fine and $10 million returned to servicemembers.
From 2005 to 2016, the bank charged customers for auto insurance policies they did not need, resulting in some customers going into default, and losing their vehicles. From 2013 to 2017, Wells Fargo inappropriately charged prospective home loan borrowers fees for extending the period for a mortgage interest-rate lock. Together, these abuses led to a collective fine of $1 billion by the Consumer Bureau and OCC.
In 2015 and 2017, the OCC and Securities and Exchange Commission (SEC) respectively found that Wells Fargo or its subsidiary failed to comply with anti-money laundering laws.
The SEC also found that, from 2009 to 2013, Wells Fargo Advisors unlawfully sold complex financial products to retail investors, reducing their investment returns.
Recently, Wells Fargo self-reported that between 2010 and 2018, the bank erroneously denied or failed to offer loan modifications to customers, resulting in over 500 people losing their homes.
What this long - but only partial - list makes clear is that Wells Fargo is a recidivist financial institution that creates widespread harm with a broad range of offenses. What’s more, this misconduct appears to persist, with the New York Times reporting Saturday that Wells Fargo’s employees continue to see internal rule-breaking to meet aggressive sales goals.
In 2018, the Federal Reserve Board imposed a cap on the bank’s growth, which remains in place today. But, this punishment and the fines imposed have not changed the bank’s behavior, and Wells Fargo continues to rake in huge profits.
Also concerning is that Wells Fargo’s regulators seem unwilling to take forceful actions against the bank, but instead are weakening Dodd-Frank safeguards protecting consumers and the economy from large firms like Wells Fargo. This includes diluting big bank capital, liquidity, leverage and stress testing requirements, and the Volcker Rule’s ban on gambling with taxpayer deposits. This Committee will scrutinize what is happening at megabanks like Wells Fargo and at the regulators who oversee them.
Wells Fargo’s ongoing lawlessness and failure to right the ship suggest the bank, with approximately $1.9 trillion in assets and serving one in three U.S. households, is simply too big to manage.
Mr. Sloan, this Committee is putting consumers first and holding financial institutions accountable. We expect you to be forthcoming.