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From Banking and Finance Law Daily, September 29, 2016

Banking Committee Democrats press Wells Fargo for more answers

By Stephanie K. Mann, J.D.

Democrats on the Senate Banking Committee pressed Wells Fargo Chairman and Chief Executive John Stumpf to respond to dozens of questions stemming from his testimony on September 20 on the bank’s unauthorized accounts scandal. The written questions were jointly submitted by the panel’s 10 Democrats: Ranking Member Sherrod Brown (D-Ohio), Jack Reed (D-RI), Charles E. Schumer (D-NY), Bob Menendez (D-NJ), Jon Tester (D-Mont), Mark Warner (D-Va), Jeff Merkley (D-Ore), Elizabeth Warren (D-Mass), Heidi Heitkamp (D-ND), and Joe Donnelly (D-Ind).

The senators’ questions consist of at least 20 inquiries that Stumpf was unable to answer, or promised to provide more information during the hearing, as well as additional queries that emerged following his testimony. This includes requests for basic information on the precise dates of when Stumpf, Wells Fargo’s board of directors, and Carrie Tolstedt, who led the firm’s community banking unit, learned that thousands of the bank’s employees were defrauding customers nationwide.

Specifically, the legislators pushed for more details on the timeframe and scope of wrongdoing at Wells Fargo, the locations of the branches where the 5,300 employees were fired, state-by-state information on the customers who may have been harmed by this misconduct, details on the bank’s aggressive sales culture, and the firm’s plans for restoring the credit scores of affected customers.

More answers needed. Additional questions posed by the senators include:

  • What steps will Wells Fargo take to ensure that customers with fraudulent accounts created before 2009 are compensated?
  • Are you confident that this type of fraudulent activity does not exist in other Wells Fargo business lines?
  • What was Wells Fargo’s policy on the employees who reported concerns to their managers or human resources division or used the hotline and were fired?
  • Has Wells Fargo contacted and instructed TransUnion, Equifax, and Experian, and any other credit bureaus, to determine and remediate any possible harm resulting from the opening of, and activity on, unauthorized credit cards?
  • How will you confirm that inaccurate information on your customers’ credit files has been removed?
  • Please provide any Board or Compensation Committee minutes describing: (1) discussion of the pending Wells Fargo settlement and any impact it had on Tolstedt's decision to retire; (2) discussion of termination or any other penalty for Tolstedt in relation to her role in the Wells Fargo actions that resulted in the Consumer Financial Protection Bureau settlement; (3) the impact of Tolstedt's decision to retire on her final compensation.
  • As was requested at the hearing, will Wells Fargo commit to permitting customers bringing disputes related to these actions to bring their claims in court, rather than forcing them into arbitration?

Companies: Equifax; Experian; TransUnion; Wells Fargo

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