Five Democratic senators on Monday called for hearings into the aggressive sales tactics by Wells Fargo & Co. employees that led to a $185 million settlement package with federal and state regulators last week.
“The magnitude of this situation warrants a thorough and comprehensive review,” the lawmakers, led by Sen. Robert Menendez of New Jersey, wrote to Sen. Richard C. Shelby (R-Ala.), chairman of the Senate Banking Committee.
The five senators requested a committee investigation into pressure-cooker sales practices first uncovered by the Los Angeles Times in 2013 that pushed thousands of Wells Fargo employees to open as many as 2 million accounts that customers never wanted.
The committee probe should include hearings and testimony from Wells Fargo Chief Executive John Stumpf, Los Angeles City Attorney Mike Feuer, as well as the heads of the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency, the Democrats said.
As members of the committee with oversight over the banking industry, “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 senators wrote.
In addition to Menendez, the letter was signed by Sens. Sherrod Brown of Ohio, Jeff Merkley of Oregon, Jack Reed of Rhode Island and Elizabeth Warren of Massachusetts.
A spokesman for Shelby did not immediately respond to a request for comment.
On Thursday, Feuer, along with CFPB Director Richard Cordray and Comptroller of the Currency Thomas Curry, announced they had reached settlements with Wells Fargo and hammered the bank for “a major breach of trust.”
Feuer said his office began investigating Wells Fargo’s practices after the Times story and sued the bank last year. The suit alleged Wells Fargo “victimized their customers by using pernicious and often illegal sales tactics,” including unrealistic quotas and policies that have “driven bankers to engage in fraudulent behavior.”
Wells Fargo did not admit any wrongdoing in the settlements. But the bank apologized to its customers and announced it was changing its sales practices.