March 5 (UPI) — After a year-long investigation, the House financial services committee has concluded that Wells Fargo operated as a “reckless megabank” that’s failed to change its culture of abusing customers — even after major scandals and punishment.
The panel chaired by Rep. Maxine Waters, D-Calif., released a 113-page report titled “The Real Wells Fargo,” which details the examination of how the bank responded to five consent orders from federal regulators following the high-profile scandals.
One, in which the bank opened millions of customer accounts without permission, resulted in Wells Fargo agreeing last month to pay a $3 billion fine to settle investigations by the Justice Department and Securities and Exchange Commission. Weeks earlier, former CEO John Stumpf was ordered to pay a $17.5 million fine for his role.
In a statement accompanying the report, Waters excoriated the bank’s leadership, saying the inquiry showed an institution run by “an ineffective board and management,” one that’s incapable of change and one that’s still a risk to consumers.
“Wells Fargo has clearly demonstrated an unwillingness and inability to stop harming its customers,” she said. “So this committee is working overtime to make sure consumers are never subjected to the types of abuses and failures committed by this megabank again.”
Rep. Al Green, D-Tex., chairman of the panel’s investigations subcommittee, blamed federal regulators for not adequately enforcing their consent orders.
“Unfortunately, those who pay the price of these failures are those least able to pay and most in need of protection — customers initially victimized by the bank,” he said.
Among the committee’s findings were emails among top executives at Wells Fargo that investigators say show “an unwillingness to take seriously the bank’s obligations” under the consent orders, and a reluctance to follow them. Other emails, they said, showed the executives’ own doubts about their ability to make the ordered changes.
Wednesday’s report also said financial regulators knew for years about “serious, enterprise-wide deficiencies” at Wells Fargo, but didn’t take public enforcement action.
Wells Fargo CEO Charles Scharf and Chairwoman Betsy Duke are scheduled to appear before the committee next week. The hearing, set for 10 a.m EST on March 10, is titled “Holding Wells Fargo Accountable: CEO Perspectives on Next Steps for the Bank that Broke America’s Trust.”