Wells Fargo Subject of Probe by House Panel Over Alleged Fake Accounts

SAN FRANCISCO, CA — The House Financial Services Committee has launched an investigation into the alleged fraud committed by Wells Fargo, in which millions of accounts were opened without the consent of customers, reportedly to meet the bank's aggressive sales goals.

In a statement issued Friday, Financial Services Committee Chairman Jeb Hensarling, a Texas Republican, said that as part of the investigation, the committee would be calling on CEO John Stumpf to testify at a hearing later this month. The committee is also requesting that Wells Fargo and regulators provide internal documents relating to the discovery and timing of these practices and is asking at least four top company officials to appear for transcribed interviews, the statement said.

Hensarling said the committee will consider further actions, including subpoenas, as warranted.

The bank reached a settlement with regulators last week and was ordered to pay $185 million in fines. According to the settlement, Wells Fargo said it has hired an independent third party to identify potentially unauthorized accounts opened between May 2011 and July 2015 and has started refunding customers.

As a result of the alleged illegal practices, the bank has terminated 5,300 employees who worked in the community banking division. Some of the practices in which the bank engaged, as alleged by the Consumer Financial Protection Bureau, include: opening deposit accounts and transferring funds, as well as applying for credit cards and issuing and activating debit cards, all without consent. The CFPB alleged that such practices resulted in insufficient fund fees and annual fees, as well as associated finance or interest charges and other late fees for some consumers.

In the wake of the settlement, the bank also announced it will end all product sales goals in retail banking beginning Jan. 1, 2017.

Stumpf is also being called as a witness to a separate hearing being held by the Senate Banking Committee Sept. 20.

Image Credit: Mike Mozart via Flickr Creative Commons