As it turns out, Wells Fargo will answer to more than just the Consumer Financial Protection Bureau for the "widespread unlawful" practices of more than 5,000 former employees who opened more than two million fake accounts in order to get sales bonuses.
The megabank will now have to one of the most powerful committees on Capitol Hill, as Wells Fargo’s CEO, John Stumpf, will testify before the Senate Banking Committee on September 20 about the bank’s actions.
The news of Stumpf’s trip to Washington comes courtesy of CNN, which reports that Stumpf will be called to testify, a request that Stumpf intends to comply with.
The powerful Senate banking committee plans to hold a Wells Fargo hearing on September 20, according to the office of Senator Richard Shelby, the committee's Republican chairman. Wells Fargo CEO John Stumpf will be invited to testify, a spokesperson from his office told CNNMoney.
Wells Fargo signaled it plans to cooperate. "We are prepared to provide the committee with information on this matter and to discuss steps we have taken to affirm our commitment to customers," a Wells Fargo spokesperson told CNNMoney.
The news comes just one day after several of the Senate Banking Committee’s prominent Democrats, including Sen. Elizabeth Warren, D-MA, called for hearings on the $185 million fine levied against Wells Fargo by the CFPB, the Office of the Comptroller of the Currency, the City and County of Los Angeles for opening up millions of fake accounts in customers’ names without their knowledge.
In a letter addressed to Shelby, Warren, along with Sens. Bob Menendez, D-NJ; Sherrod Brown, D-Ohio; Jack Reed, D-R.I.; and Jeff Merkley, D-Ore.; the Democrats request immediate committee hearings to investigate the matter further.
“The magnitude of this situation warrants a thorough and comprehensive review,” the Democrats said.
“As members of the Senate committee of jurisdiction, we should undertake prompt action to fully investigate the cause, scope, and impact of this event, as well as understand and consider implementing any lessons learned,” the Democrats continued.
“Specifically, the committee should thoroughly examine this issue, including: how it is possible that more than 5,000 employees could bilk customers over the course of five years; the timing, extent, and disposition of customer complaints; whether Wells Fargo’s sales and compensation structure incentivized employees to engage in deceptive and abusive practices; and what additional safeguards may be needed to prevent this type of behavior,” the Democrats added.
Also given Warren’s co-authorship of the letter, it shouldn’t be a surprise that the actions of the CFPB are heralded.
“We applaud the CFPB’s swift enforcement action,” the Democrats write. “Thursday’s announcement is yet another indication that the CFPB is making consumer financial markets safer for consumers and protecting hard-working American families from abusive financial practices.”
It should be noted that Wells Fargo already announced plans to revamp its compensation plan in the wake the “cross-selling” scandal.
But that won’t stop the Committee from questioning Stumpf on how the bank allowed its employees to open more than 1.5 million fake deposit accounts and more than 500,000 fake credit card accounts.
“As members of the United States Senate Committee on Banking, Housing, and Urban Affairs, we should accept nothing less than a full and transparent explanation of what went wrong, who is responsible, how to fix it, and how to prevent such fraud in the future,” the Democrats concluded.