Wells Fargo's Stumpf Urged by Rep. Maloney to Extend Accounts Review

Sep 30, 2016
In The News

Sept. 30 — Rep. Carolyn B. Maloney (D-N.Y.) urged Wells Fargo Chairman and Chief Executive John Stumpf to “formally extend” Wells Fargo’s review of problem accounts back to 2007 at least, saying a lawsuit by bank employees shows that “abusive and illegal practices under investigation may date back to that time.”

Maloney's Sept. 30 letter came the day after Stumpf heard criticism and calls for his resignation during a hearing before the House Financial Services Committee. Stumpf defended Wells Fargo after the bank earlier this month agreed to pay $185 million to the Consumer Financial Protection Bureau and other regulators for creating roughly 2 million unauthorized consumer accounts.

According to Maloney, Stumpf in his testimony pledged to look for problems prior to 2009 if presented with credible evidence. Maloney, ranking member on the Capital Markets Subcommittee, said documents from the lawsuit meet that test, asking him to push the review back to 2007 at least.

“As you told me directly that you will `leave no stone unturned' in your search for evidence that customers were harmed by the actions of your bank, I ask that you consider this evidence a stone, and turn it over,” Maloney said, citing the court documents.

Wells Fargo did not immediately respond to a request for comment on the letter.

The court case involved a lawsuit originally brought in a Montana court by former Wells Fargo employees who said they were wrongly discharged in June 2008 after one plaintiff, Georgia Arnold, reported a possible violation of public policy by using an ethics hotline.

The case was later removed to federal court, where in 2009 the plaintiffs filed an amended complaint saying they reordered debit cards as directed by a supervisor, but were later accused of wrongdoing.

The plaintiffs, all of whom are women, alleged discrimination by the bank and said Wells Fargo knew that in fact they were following the bank's procedures in making the report.

Settlement discussions began in September 2010 after the plaintiffsasked the court to compel testimony by a Wells Fargo official.

The case was settled and dismissed in 2011.