House committee launches Wells Fargo probe

Will Investigate bank's improper sales tactics

The sign outside the Wells Fargo & Co. bank in downtown Denver April 13, 2016.  REUTERS/Rick Wilking
The sign outside the Wells Fargo & Co. bank in downtown Denver April 13, 2016. REUTERS/Rick Wilking

The House Financial Services Committee has launched an investigation into improper sales tactics at Wells Fargo & Co. and plans to call the bank’s chief executive to testify at a hearing this month.

Rep. Jeb Hensarling, R-Texas, the committee’s chairman, said Friday that the probe would look into “alleged fraud that led to the opening of unauthorized customer accounts at Wells Fargo and the role of Washington regulators in monitoring and investigating this activity.”

The panel’s investigation comes as the Senate Banking Committee is looking into the matter and will hear testimony from Wells Fargo Chief Executive John Stumpf at a hearing on Tuesday. The Justice Department also has started an investigation that could lead to civil or criminal charges.

The probes come after the bank agreed last week to pay $185 million to settle investigations by Los Angeles City Attorney Mike Feuer and federal regulators.

The sales tactics, first uncovered by the Los Angeles Times in 2013, involved thousands of bank employees opening as many as 2 million accounts that customers did not authorize in order to meet aggressive sales goals.

Wells Fargo has fired 5,300 employees for improper sales tactics since 2011.

In a letter to Wells Fargo general counsel James M. Strother, Hensarling said that “the committee is very concerned by these serious allegations.”

He requested “all records related to the questionable sales tactics” that were produced or made available to Los Angeles and federal officials.

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The committee also requested documents from the federal regulators involved in the settlement: the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency.

Reps. Maxine Waters, D-Calif., and Al Green, D-Texas, had requested on Sept. 9 that Hensarling hold a hearing.

“We need answers as to how this happened and why this happened. We need answers about who’s being held accountable for this fraud,” Waters told reporters on a conference call Friday.

In addition to calling Stumpf to testify at the hearing, Hensarling requested that four Wells Fargo executives be made available for interviews with committee staff.

They include Carrie Tolstedt, senior executive vice president for community banking, who headed the unit in which the unauthorized accounts were opened. Wells Fargo announced in July that she was retiring at the end of the year.

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