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From Banking and Finance Law Daily, September 19, 2016

Hensarling launches investigation into Wells Fargo activities, regulatory oversight

By Katalina M. Bianco, J.D.

House Financial Services Committee Chair Jeb Hensarling (R-Texas) has begun a committee investigation into alleged fraudulent practices by Wells Fargo Bank, N.A. that resulted in enforcement actions by the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency (see Banking and Finance Law Daily, Sept. 8, 2016). The committee will investigate not only Wells Fargo’s practice of secretly opening two million unauthorized deposit and credit card accounts but the role of federal bank regulators in monitoring and investigating the activities.

Representative Robert Pittenger (R-NC), who has joined Hensarling in launching the investigation, noted that Wells Fargo is "vital to Charlotte’s economy," but "the serious allegations of fraudulent accounts warrant oversight from the House Financial Services Committee." Pittenger added, "Washington bureaucrats should also be held accountable in their role as a watchdog for the American people."

The committee intends to call Wells Fargo Chairman and CEO John Stumpf to testify at a hearing later this month. The committee also is requesting that Wells Fargo, the CFPB, and the OCC provide internal documents relating to the discovery and timing of these practices, and is asking company officials to appear for transcribed interviews. Hensarling said the committee will consider further actions, including subpoenas.

Letter to Wells Fargo. Hensarling wrote to Wells Fargo counsel to advise the bank of the investigation, stating that the committee is "very concerned by these serious allegations and is investigating Wells Fargo’s questionable sales practices and corresponding agreements with federal regulators in order to evaluate the application, administration, execution, and effectiveness of Federal laws." In the letters, he requests all documents related to the Wells Fargo sales practices by Sept. 23, 2016. In addition, Hensarling requests that certain corporate officers be made available for interviews with the committee during September.

Letters to regulators. In his letters to the CFPB and OCC, Hensarling reiterated the committee’s concerns about the serious allegations against Wells Fargo and requested specific documents necessary for the investigation. The committee chair requested that the agencies produce:

  1. All records relating to the allegations of fraudulent or improper activity by Wells Fargo and its officers, employees, or directors;
  2. Any documents or communications including, but not limited to, e-mails, between the agencies and Wells Fargo employees, officers, and directors, during the review of Wells Fargo’s sales practices; and
  3. Any documents detailing supervisory policies and procedures of the agencies intended to detect fraudulent or improper activity that were in place when Wells Fargo was initially alleged to have engaged in the fraudulent or improper activity in 2011.

Companies: Wells Fargo Bank, N.A.

MainStory: TopStory BankingOperations CFPB CrimesOffenses DirectorsOfficersEmployers NorthCarolinaNews OversightInvestigations

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