The true depth of Wells Fargo’s accounts falsification scandal is forcing a top lawmaker and friend of the industry to be on alert.
Sen. Mike Crapo (R-Idaho) last week declined a New York Times request to comment on revelations about millions more unauthorized sales by Wells. But the Senate Banking Committee Chair promised on Thursday that he is looking into the matter, when prodded by Elizabeth Warren (D-Mass.).
“I will keep you informed as I learn more and, as I said, your request is under consideration,” he told Warren at a committee hearing on Thursday.
Crapo said he was personally seeking information from the bank and regulators, and said that “Wells Fargo’s opening of unauthorized accounts was inexcusable.”
“The fundamental trust they had with their customers was broken,” he added.
Last week, the bank admitted that it had actually opened 3.5 million accounts, without the consent of its customers, between 2009 and 2016.
In September 2016, as part of a multi-agency $185 million settlement, Wells conceded that it had improperly opened only 2.1 million accounts, between 2011 and 2015.
Wells Fargo also admitted last week that, without asking, it sold an online bill payment service to 528,000 customers.
The news came after July revelations about Wells hawking auto insurance to customers who didn’t want it—a practice that led to 274,000 loan delinquencies and 25,000 wrongful car repossessions.
The bank, in recent months, has also been accused of adjusting the terms of mortgages without the prior consent of borrowers.
In early August, after the car insurance news rose to the fore, Senate Banking Comimttee Democrats asked Crapo for another hearing featuring testimony from Wells Fargo executives.
Officials from the bank appeared before the committee last year, in the immediate aftermath of the initial phony accounts settlement. Now-former CEO John Stumpf tried to minimize concerns, claiming that “only one percent” of the bank’s total workforce was involved in illicit behavior, despite the imposition of aggressive sales targets from above.
“This mess at Wells affects people in every one of our states, and it also raises substantial concerns about what’s going on at one of the biggest banks in this country,” Warren said on Thursday. In late July, she called on the Federal Reserve to use its authority to remove board members from the bank.
Crapo would, undoubtedly, rather be doing favors for large banks like Wells Fargo—the second largest bank in the country, according to Fed statistics. The committee chair is the lead sponsor on the senate version of legislation that would undermine rules making it tougher to hold banks accountable in court.
The legislation–targeting the Consumer Financial Protection Bureau rule on forced arbitration–is stalled in the senate, after passing the House. Republicans are reportedly struggling to cobble together the simple majority they need to pass the bill, with objections from four members of their caucus, according to Bloomberg.
Wells Fargo has used forced arbitration clauses to obscure the proliferation of phony accounts at its branches.
“Customers first sued over these accounts in 2013, but Wells Fargo then forced them into secret arbitration proceedings, keeping this scam under wraps and blocking consumers from any relief,” Sen. Sherrod Brown (D-Ohio) said in late July, in defense of the CFPB rule.
“And they’re still using these forced arbitration in their contracts,” he added.
