Sen. Elizabeth Warren (D-Mass.) sent a letter to the Federal Reserve on Monday urging it to disband Wells Fargo and take “immediate action” regarding its “immoral and anti-consumer conduct.”
In a letter to Fed Chairman Jerome Powell, Warren noted that widespread corruption within the scandal-plagued bank poses “substantial risks” to both consumers and the financial system, and added that the Fed considered Wells Fargo’s position as a financial institution. as a holding company and requires the company to separate its traditional banking activities from its other financial activities.
“I urge the Federal Reserve Board of Governors to take immediate action in response to the repeated, ongoing and unforgivable failure of Wells Fargo & Co. to eliminate abusive and illegal practices that cost consumers hundreds of millions of dollars. are,” Warren wrote.
The Fed, led by Janet Yellen, kept Wells Fargo under an asset cap below $1.95 trillion in 2018 until it reformed its governance and risk controls after widespread consumer abuse and other compliance breakdowns.
This came as the financial service made millions by creating fake accounts for customers without their knowledge, on some occasions even charging unnecessary fees.
Warren noted that several disclosures had come to light regarding Wells Fargo’s “unethical and anti-consumer conduct” even though the cap was imposed, and urged the Fed to take action to protect consumers.
“These new revelations make it clear once again that allowing this massive bank to do business in its current form with a broken culture poses substantial risks to consumers and the financial system,” Warren wrote.
For this reason, the Fed must use its longstanding authority under the Bank Holding Companies Act to rescind Wells Fargo’s status as a financial holding company (FHC) and require that it sell its bank subsidiary. Separate it from your other financial activities.”
“Wells Fargo is an irreparable criminal; the Fed must act,” she said.
Last week, regulators in the Office of the Comptroller of the Currency (OCC), a banking regulator within the Treasury Department, fined Wells Fargo $250 million for failing to compensate victims who suffered from the bank’s past abusive practices regarding mortgage loans. was slow.
Despite this and firm assets caps imposed by regulators, Warren said Wells Fargo is “actively working to expand its investment bank,” and is conducting “risky activities” such as Lending to hedge funds “looking to raise the stakes” which he said could potentially lead to more losses among clients.
“Every single day that Wells Fargo continues to maintain these depository accounts is a day when millions of customers are at risk of additional negligence and willful fraud,” Warren continued.
“The only way to keep these consumers and their bank accounts safe is through some other institution – whose business model does not rely on duping customers for every last penny. The Fed has the power to put consumers first, and that It should be used,” she said.
“By invoking its full authority to protect consumers and the financial system, and requiring Wells Fargo to separate its consumer-facing banking arm from the rest of its financial activities, the Fed can ensure that Wells Fargo is protected by its Long-lasting intolerable behavior must be met with appropriate consequences.”
While Wells Fargo did not directly respond to Warren’s letter, the banking service issued a statement Tuesday saying it is committed to serving customers with the “highest standards.”
“We are a different bank today than we were five years ago because we have made significant progress,” the bank said, before sharing a list of changes that were made to create “greater oversight and transparency.”
The bank also noted that it has made “significant progress in reducing the total number of customer treatments and expediting remedial payments to our customers.”
This News Originally From – The Epoch Times