Bank Fraud as a Business Plan

Former Wells Fargo Employees Call for Elaine Chao’s Senate Nomination Hearings to Explore What She Knew About Systemic Fraud Scandal at Bank

 

New Letter Asks Senators to Explore What Elaine Chao, Member of Wells Fargo Board of Directors Since 2011, Knew About Systemic Fraud at Wells Fargo

 

Washington, DC – Former Wells Fargo employees have issued a new letter to the U.S. Senate asking that the upcoming Senate confirmation hearings for Secretary of Treasury nominee Elaine Chao include questions to explore her knowledge of the fraud scandal at Wells Fargo, in which up to two million fake accounts were created by Wells Fargo bankers in order to meet sales targets and for which the bank has been fined more than $180 million. Ms. Chao has been a member of the Wells Fargo Board of Directors since 2011.

 

The letter, from the Committee for Better Banks, states, “We believe that Ms. Chao’s confirmation hearings should address this issue to provide the American public with a fuller and truer sense of when, exactly, members of Wells Fargo’s board became aware of this systemic fraud and why it took them so long to act to rectify the problem. In particular, we hope that you will use the opportunity of her nomination hearings to ask her directly when she was made aware of the allegations raised by workers prior to the action taken by the CFPB. Getting this information is also crucial as you assess whether Ms. Chao has the appropriate management approach to lead an effective and responsible Department of Transportation.”

 

Ms. Chao is scheduled to have a confirmation hearing before the Senate Commerce, Science and Transportation Committee on Wednesday, January 11th. The letter from the Wells Fargo employees to the Senate is pasted below:

 

“As former employees of Wells Fargo, we are writing you regarding the nomination of Elaine Chao to serve as Secretary of Transportation. As you likely know, Ms. Chao has served on the Board of Directors of Wells Fargo since 2011, which we believe merits your attention as you consider her nomination.

 

Much attention has rightfully been paid to the scandal in which up to two million fake accounts were created by Wells Fargo bankers in order to meet unrealistic and unfair sales targets. We are grateful to banking regulators, particularly the Consumer Financial Protection Bureau, for their work exposing this scandal and to rectify the harm done to consumers. We are similarly appreciative of the members of Congress and the U.S. Senate who have supported efforts to rectify consumer harm and hold Wells Fargo executives accountable.

 

Unfortunately, former Wells Fargo CEO and Chairman John Stumpf and other members of Wells Fargo leadership have worked to evade accountability and to shift blame to the very same workers whom they forced into the pressure cooker environment that ultimately led to this scandal. In particular, we do not believe that there has been an honest accounting regarding when and how Wells Fargo leadership became aware of the widespread creation of fake accounts.

 

We can personally attest that Wells Fargo supervisors directed bankers to meet unrealistic sales quotas by any means necessary. These same supervisors were fully aware that it was exceedingly difficult for any banker to hit these targets while treating customers fairly, and it is implausible that many of these supervisors were totally unaware of the fraud resulting from their own directives. Yet, Mr. Stumpf and others have insisted that they had very little knowledge of the scope of this problem until recently.

 

We are members of the Committee for Better Banks (CBB) a coalition advocating for improvements in the banking industry. We identified unreasonable and excessive sales goals, quotas and metrics as a significant issue in the industry and supported a petition started by Wells Fargo workers several years ago. In both 2014 and 2015 members of CBB went to Wells Fargo shareholder meetings delivering the petitions and a message about the impact of the excessive sales goals on employees and customers. We did demonstrations and protests around the country that received a great deal of publicity and we were part of a congressional briefing on the issue. It is hard to imagine the members of the Wells Fargo board was not aware of this festering problem.

 

We believe that Ms. Chao’s confirmation hearings should address this issue to provide the American public with a fuller and truer sense of when, exactly, members of Wells Fargo’s board became aware of this systemic fraud and why it took them so long to act to rectify the problem. In particular, we hope that you will use the opportunity of her nomination hearings to ask her directly when she was made aware of the allegations raised by workers prior to the the action taken by the CFPB.

 

Getting this information is also crucial as you assess whether Ms. Chao has the appropriate management approach to lead an effective and responsible Department of Transportation. So, we hope that you will consider this issue strongly as you evaluate Ms. Chao’s nomination.

 

Thanks in advance for your consideration of our request.”

 

###

Advertisements