WASHINGTON — The Democratic chair of the House Financial Services Committee is calling on the nation's financial regulators to "escalate" their scrutiny and punishment of Wells Fargo, pointing to the bank’s "history of repeat offenses."
In a
"As I have made clear in the past, Congress has given regulators like yourselves significant tools to properly penalize Wells Fargo for its continuous wrongdoing," Waters wrote in the letter, which was addressed to top officials at the Federal Reserve, the Department of Housing and Urban Development, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp. and the Consumer Financial Protection Bureau.
"Wells Fargo and other mega-financial institutions must face real consequences to curb their recidivism," Waters wrote.
Waters pointed to recent regulatory actions, including a
Waters' plea came on the heels of a similar letter by Senate Banking Committee Chair Sherrod Brown, D-Ohio, in May. Rather than writing to regulators, however, Brown addressed his letter to Wells Fargo CEO Charlie Scharf, demanding that the chief executive address the bank's compliance shortcomings "
A Wells Fargo spokesperson said in a statement Wednesday that the bank was "disappointed to see Chairwoman Waters' letter, which does nothing but rehash legacy issues that occurred under prior leaders who left the company years ago and repeat the unproven allegations of recent news reports that did not present the full facts."
"We firmly disagree with Chairwoman Waters' portrayal of Wells Fargo. We are a different bank today than we were a few years ago, with a new management team that has the skills and experience necessary to successfully implement the enterprise-wide transformation Wells Fargo is undergoing," the spokesperson said. "Meeting our regulators' expectations — as well as our own — remains our top priority."
In her letter, Waters highlighted a Bloomberg report from March that alleged Wells Fargo had disproportionately denied Black homeowners' mortgage refinancing applications, as well as a New York Times report from June that found the bank was interviewing diverse candidates for jobs that had already been filled. Federal prosecutors
In a letter Tuesday to CEO Charlie Scharf, Senate Banking Committee Chair Sherrod Brown pointed to recent media reports and said he expected Wells Fargo to develop a plan addressing “weaknesses that have plagued the bank for almost a decade.”
Waters said she felt "profound disappointment" that regulatory action to date had apparently not been enough to force Wells Fargo to improve its performance. She also indicated that she plans to introduce legislation that would direct "banking regulators to use their severe authorities to immediately stop Wells Fargo from harming customers."
"The need for warnings and ‘cost of doing business fines' have long passed," Waters wrote. "The asset cap imposed by now-Treasury Secretary Janet Yellen has failed to force the bank to change its behavior. Despite Mr. Scharf’s leadership, Wells Fargo continues to display a troubling pattern of bad behavior with an inability to competently redress such patterns."
A CFPB spokesperson declined to comment on Wells Fargo specifically but said: "We appreciate Chairwoman Waters' focus on problems in the consumer finance marketplace and we will remain in dialogue with the committee about our supervision and enforcement work."
