Democrats want to grill Wells Fargo executives about auto insurance: letter

Reuters News
Posted: Aug 01, 2017 4:03 PM

By Patrick Rucker

WASHINGTON (Reuters) - Democratic lawmakers on Tuesday pushed for another chance to grill Wells Fargo & Co's leadership about sales practices after the scandal-hit bank said it forced auto insurance on borrowers who did not need it.

Democrats on the Senate Banking Committee plan to ask Republicans in leadership to summon Wells Fargo Chairman Stephen Sanger and Chief Executive Tim Sloan to answer how sales abuses went unchecked at the bank for so long, according to a draft letter viewed by Reuters.

That letter would follow one sent on Tuesday by Representative Maxine Waters, the top Democrat on the House Financial Services Committee, who wants to know how Wells Fargo wrongly charged roughly 570,000 customers for auto insurance they did not need, leading to unwarranted delinquencies and car repossessions.

Unwanted auto insurance is the latest wrinkle in a months-long scandal over sales practices at Wells Fargo, where employees also created as many as 2.1 million deposit and credit card accounts in customers' names without their permission.

"Members should have the opportunity to question Mr. Sloan about the bank's progress in addressing the damage it did to its customers," said the Senate letter, signed by Democrats including ranking member Sherrod Brown.

A spokeswoman for Wells Fargo said the bank looked forward to answering questions from Washington.

"Wells Fargo understands and is committed to addressing policymaker concerns," said Jennifer Dunn. "We are committed to fixing these mistakes and earning back trust."

Employees have said they created unauthorized accounts to hit sales goals handed down by management. The creation of fake accounts and misplaced insurance charges went on for years before the bank's management took action.

After Wells Fargo reached a $190 million settlement with regulators over the fake accounts in September, its then-Chairman and CEO John Stumpf appeared before both committees to face questions from lawmakers at heated hearings. He left the bank shortly after, to be replaced by Sloan and Sanger.

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Whether Stumpf's successors will be hauled before Congress publicly is uncertain. Only Republicans can summon witnesses, since that party controls Congress.

The draft letter urged Idaho Senator Mike Crapo, who chairs the banking panel, to call a Wells Fargo hearing in September.

Democrats want to know how the auto insurance and unauthorized accounts practices went on undetected, and Wells Fargo plans to compensate customers who were wrongly charged for insurance, according to the letter.

(Reporting By Patrick Rucker; Editing by Lauren Tara LaCapra and Meredith Mazzilli)