1.4mn more bogus Wells Fargo accounts emerge with Congress asleep at the wheel
As the tally of fake Wells Fargo accounts balloons to 3.5 million, Congress has yet to discipline the executives, while the financial giant has only paid fines. A coalition of 33 groups is now demanding new hearings and for the bank to be held accountable.
Wells Fargo and Company increased its estimate of how many accounts were created by 67 percent Thursday. The mega bank issued shocking new disclosures, showing 1.4 million more bogus customer accounts had been created, a significant increase from previous estimates, the New York Times reported.
In addition, Wells Fargo admitted to yet another impropriety, stating that they enrolled more than a half-million customer accounts into their online bill pay service without notifying them. The embattled bank has since agreed to pay out $910,000 to customers who accrued fees or charges related to the unknown accounts.
“We are working hard to ensure this never happens again and to build a better bank for the future,” Wells Fargo CEO Timothy J. Sloane said in a statement, the Times reported.
There has not yet been word if executives with the bank will be summoned back to Washington to face lawmakers for yet another round of questioning following last year’s Capitol Hill hearing with then-CEO John Stumpf.
During that hearing, Wells Fargo and their former CEO paid big bucks, but no other actions have been taken by Congress to thwart future offenses by the company. Now, 33 organizations have banded together to call for new congressional hearings relating to Wells Fargo’s questionable practices.
Two groups, Americans for Financial Reform and Public Citizen, are leading the charge to stage new hearings, The left-leaning organizations sent a letter Thursday to the Senate Banking Committee and the House Financial Services Committee, asking to bring Wells Fargo executives back to Capitol Hill to answer for the newly found malpractices.
US Senator Sherrod Brown (D-Ohio), head of the Senate Banking Committee, tweeted, “Wells Fargo harmed millions more customers than originally disclosed, and continues to avoid accountability.”
And Representative Maxine Waters (D-California), suggested in a statement that Wells Fargo’s wrongful acts may be too big to manage.
“This disgraceful, illegal, and widespread misconduct is exactly why I will be introducing legislation that breaks up banks – like Wells Fargo – that repeatedly engage in consumer abuses, so that they can never harm consumers again,” she said, according to Bloomberg.
Progressive firebrand US Senator Elizabeth Warren (D-Massachusetts) called Wells Fargo’s new disclosure “unbelievable” in a tweet Thursday.
The new infraction joins a list of questionable business practices revealed in the past few months, including charging 500,000 people for auto insurance they didn’t need or asked for.
“Have you discovered other types of misconduct involving other products aside from credit cards or basic banking; such as misconduct related to applications for mortgages or personal or other loans, or lines of credit, insurance or other investment areas?” Senate Democrats asked Stumpf at the end of the September 2016 hearings.
Stumpf’s reply may run contrary to recent findings in the bank’s new disclosures.
“We believe that the activity at issue here was limited to certain team members within the Community Banking Division,” he said, according to the Times.
Several lawmakers lashed out at Stumpf during the hearings.
Representative Gregory Meeks (D-New York) didn’t hold back in his criticism of the former CEO. “You should be fired,” he said.
Representative Jeb Hanserling (R-Texas) also had harsh words for Stumpf at the proceedings.
“To the American people, this kind of feels like déjà vu all over again,” he said the Times reported. “Some institution is found engaging in terrible activities. There is a headline, fine, and yet no one seems to be held accountable.”
Following the bank’s first round of misdeeds, Stumpf eventually agreed to give up $41 million in stocks, along with his 2016 salary and bonus. He resigned shortly thereafter and walked away with millions in severance pay.
Among the shady practices, Wells Fargo employees transferred money from a customer’s bank account and placed it into another account the employee created and that the customer did not know about, regulators say, according to CNN Money.
The bank paid out $185 million after three government lawsuits relating to the illegal banking activity. Wells Fargo employees admitted that thousands of workers created the false accounts in an attempt to meet the bank’s sales targets and in order to receive a bonus, CNN Money reported.
Last year, the bank only reported 2.1 million unwanted accounts that it had created without customers’ consent.
Wells Fargo has since stated that it has stopped this particular sales target initiative.