Hillary Clinton is out with an open letter to Wells Fargo customers, pledging to protect the consumer watchdog set up by Sen. Elizabeth Warren (D-Mass.) that uncovered the bank’s massive scam.
“Our economy depends on a strong and safe banking system to help keep it moving,” Clinton writes in her letter. “But even after Americans spent years working hard to recover from the Great Recession, the culture of misconduct and recklessness that preceded that crisis too often persists.”
This month, Wells Fargo was slapped with a $185 million fine for using customers’ personal information and money to sign them up for online banking services that the customers never asked for. Over at least the past five years, bank employees created more than 1.5 million sham checking accounts and applied for 565,000 credit cards. Many customers found out about the new accounts after they started accumulating fees.
The largest part of that penalty, $100 million, was imposed by the Consumer Financial Protection Bureau, which led the investigation of the bank. Elizabeth Warren proposed the agency in the aftermath of the financial crisis. Republican senators blocked her from becoming the agency’s full-time head; they now have the privilege of serving with her in the Senate.
In a speech on Sept. 8, CFPB Director Richard Cordray explained that Wells Fargo allowed a culture to flourish where bank employees could misuse customer information to inflate their sales figures. Workers were under intense pressure to meet quotas.
“Unchecked incentives can lead to serious consumer harm, and that is what happened here,” Cordray said.
CFPB ended up being that final check. And in her letter to Wells Fargo customers Tuesday, Clinton said she will preserve the agency that Republicans are constantly trying to get rid of.
“The unfair and abusive practices at Wells Fargo remind us that we need tough watchdogs looking out for customers,” Clinton states. “The CFPB worked with local authorities and enforced the law – assessing its highest penalty ever, and bringing the bank’s illegal activity into the national spotlight.”
GOP presidential nominee Donald Trump has promised to dismantle the 2010 financial regulatory law known as Dodd-Frank ― which created CFPB.
“I won’t let them put the CFPB under their thumb,” Clinton writes. “I’ll protect the CFPB and make sure it can continue its essential work on behalf of the American people.”
Wells Fargo, both the bank and its foundation, have given generously to the Clinton Foundation over the years. The bank has given between $10,001 and $25,000, and the foundation has given between $100,001 To $250,000. In 2011, former President Bill Clinton gave a speech to Wells Fargo for $200,000.
“This is classic Hillary Clinton: publicly criticizing a company because it’s good politics while the Clinton Foundation quietly accepts hundreds of thousands of dollars from that same company,” said Jeff Bechdel, communications director of the conservative America Rising PAC. “If Clinton truly meant what she wrote, her letter would have been accompanied by a check from her family foundation returning the money from the company she is hypocritically complaining about.”
Wells Fargo CEO John Stumpf, along with Cordray and other officials, will testify before the Senate Banking Committee Tuesday at 10 a.m. In his testimony, published by The New York Times, Stumpf says he is “deeply sorry” and takes “full responsibility” for the scandal.
Read Clinton’s full letter:
Dear Wells Fargo Customers,
In America, we have faith that when we open up a checking account, we aren’t opening ourselves up to being scammed. Whether you use a local credit union or community bank or one of the big national chains, we take it for granted that those institutions are fulfilling this basic responsibility to their consumers.
That’s why I was deeply disturbed when, last week, we found out that Wells Fargo had engaged in widespread illegal practices over many years. The bank secretly opened up millions of accounts for customers without their consent – betraying their customers, misusing their personal information and leading many to be slapped with unjust fees and other charges. Today, Wells Fargo’s CEO will appear before Congress. He owes all of you a clear explanation as to how this happened under his watch.
There is simply no place for this kind of outrageous behavior in America.
Our economy depends on a strong and safe banking system to help keep it moving. But even after Americans spent years working hard to recover from the Great Recession, the culture of misconduct and recklessness that preceded that crisis too often persists.
I have a plan to address it.
First, we need to defend the Consumer Financial Protection Bureau. The unfair and abusive practices at Wells Fargo remind us that we need tough watchdogs looking out for customers. The CFPB worked with local authorities and enforced the law – assessing its highest penalty ever, and bringing the bank’s illegal activity into the national spotlight.
Donald Trump, the Republican Party, and Wall Street lobbyists are desperate to dismantle this effective agency, which is dedicated solely to protecting consumers from unfair and deceptive practices. I won’t let them put the CFPB under their thumb. I’ll protect the CFPB and make sure it can continue its essential work on behalf of the American people.
Second, we need real consequences when firms on Wall Street break the law. This past week, we learned that one of the Wells Fargo executives that oversaw the division that ripped off its customers left the bank – not with a pink slip, but with a $125 million payout. It’s hard to imagine that top executives were unaware of a problem that involved thousands of the firm’s employees. After all, they imposed sales targets and compensation incentives in ways that led to this behavior. And it’s frustrating that a bank can simply pay a fine and keep doing business as usual – with massive compensation for the executives responsible. That compensation should be clawed back.
I’ve put forward an agenda to enhance accountability on Wall Street. Executives should be held individually accountable when rampant illegal activity happens on their watch. Their compensation should take a hit if their companies pay major fines. And they must face appropriate legal consequences if they break the law.
Third, we need to make sure that no financial institution is too big to manage. I’ll put additional safeguards in place to address the risks that the big banks continue to pose to our system. And if any bank can’t be managed effectively, it should be broken up.
I’ll appoint regulators who will stand with taxpayers and consumers, not with big banks and their friends in Congress. I’ll fight hard to make sure that Wall Street is working for Main Street – not the other way around.
We need to keep pushing to make the financial system safer and fairer. Let’s do it together.
This piece has been updated with comment from America Rising.