Sen. Elizabeth Warren said she thinks the Federal Reserve needs to break up Wells Fargo over what she referred to in a letter on Monday (Sept. 13) as repeated instances of misconduct.
Warren wrote that the massive bank has failed to “eliminate abusive and unlawful practices that have cost consumers hundreds of millions of dollars.”
Warren noted that Wells Fargo has been facing scrutiny from Chair of the Federal Reserve Janet Yellen since 2018, for alleged widespread consumer abuses and various compliance breakdowns.
In summary, Warren said that the problems are ongoing and nothing has changed with respect to the situation in the three years that followed.
The bank has been reprimanded over “inadequate controls, insufficient independent oversight and ineffective governance related to loss mitigation activities” in terms of mortgage foreclosures and how the bank has responded to the agency’s past notices.
She said that the bank has failed “to timely detect, prevent and quantify inaccurate loan modification decisions” and noted that the “ability to fully and timely remediate harmed customers” was diminished, according to the letter.
In addition, she writes that there have been other issues, as employees have reportedly used fraudulent means to meet sales goals and opened accounts in customers’ names without their knowledge, creating fake personal identification numbers and other radical measures.
She goes on to list Wells Fargo’s habit of repossessing vehicles of military service members, charging people for unneeded auto insurance, changing information on bankers’ customer documents and similar abuses, like falsifying signatures and unauthorized account closures.
In conclusion, Warren recommends that drastic action be taken.
“Every new report of scandal and ongoing noncompliance by Wells Fargo represents a giant financial institution squeezing consumers to pad profits for its executives. The Fed must revoke Wells Fargo’s FHC status and order the company to develop a plan to ensure that the 65 million customers that currently rely on Wells Fargo’s consumer banking and lending services are protected through the transition. Every single day that Wells Fargo continues to maintain these depository accounts is a day that millions of customers remain at risk of additional negligence and willful fraud,” Warren wrote.
On Monday, a civil trial by the Office of the Comptroller of the Currency (OCC) began against three Wells Fargo executives for their reported roles in the scandal of the misappropriated identities used to make accounts.
Read more: OCC Begins Public Civil Trial Against Former Wells Fargo Execs
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