Wells Fargo Fined $24M For Illegally Seizing Military Members' Cars

Federal investigators have said Wells Fargo employees were coerced by supervisors to secretly create millions of credit card and banking accounts without customers' knowledge to boost the bank's sales figures.

US lawmakers called on Thursday for Wells Fargo Chief John Stumpf to resign and a top House Democrat demanded the bank be broken up because it is too big to manage.

Sens. Warren, Jeff Merkley (D-Ore.) and Robert Menendez (D-N.J.) said Wells Fargo executives may have "violated laws by misleading investors and firing whistleblowers while the bank oversaw the creation of millions of unauthorized, fraudulent accounts". What happened at Wells Fargo over the course of many years can not be described any other way, "said Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee".

Commenting Thursday on California State Treasurer John Chiang's suspending business ties with Wells Fargo for a year, Nevada State Treasurer Dan Schwartz said in a statement, "Wells Fargo has had a presence in Nevada for well over a century".

Wells Fargo's share price has lost more than 9 percent since the fines were announced on Sept 8. Stumpf was asked by Rep. Al Green, D-Texas, whether other banks use aggressive sales tactics to urge employees to open accounts for existing customers, which Stumpf said he did not know.

Rep. Michael Capuano, D-Mass., said Wells Fargo has faced 16 enforcement actions over the past five years, including an $85 million fine from the Fed in 2011 for mortgage lending abuses. Several called for Stumpf's resignation, and others asked why he shouldn't be jailed, like a bank robber.

Stumpf insisted customers' loyalty to Wells Fargo remains as strong as ever.

The consumer banking giant, which is also the nation's biggest mortgage lender, has fired about 5,300 employees over the sales practices.

Stumpf replied, "I serve at the pleasure of the board".

A lawyer for the National Guardsman requested information from Wells Fargo but never received a response, the DOJ said, sparking the review that uncovered a pattern of violations. Stumpf said the sale was unrelated. Stumpf will also be denied his 2016 bonus and will receive no pay during an internal investigation into the fraud.

Wells Fargo apologized for the repossessions saying, "We have been notifying and fully compensating customers and will complete this work in 60 days".

"I, sir, think you ought to submit a resignation and your board can not hold off action on that", he said.

Heck questioned how the board couldn't see Stumpf is "no longer the correct" person to lead the company. "Wells Fargo should be broken up". "If I could, I'd pay it back", said Hensarling. He and the other Democrats on the panel asked Stumpf on Wednesday to answer a series of 58 questions, including almost two dozen that they said he failed to answer at the hearing last week or for which he promised to provide fuller information.

  • Anthony Vega