Hillary Clinton slammed Wells Fargo today, holding up the bank’s ongoing accounts scandal as an example of “egregious corporate behavior,” and pledging to strengthen consumer protections and further scrutinize corporate America if elected.
The remarks, made in Toledo, Ohio, bring renewed scrutiny to the bank, which has been in damage control mode since regulators alleged nearly a month ago that its employees may have opened as many as two million accounts without customers’ knowledge or permission over an approximately five-year period beginning in 2011.
Clinton attempted to draw a connection between the financial crisis of the last decade and the accounts scandal that has seen Wells Fargo CEO John Stumpf lambasted by Republicans and Democrats alike in hearings in both the House and Senate.
“Look at Wells Fargo,” she said as the crowd booed. “Really shocking, isn’t it? It is outrageous that eight years after a cowboy culture on Wall Street wrecked our economy, we are still seeing powerful bankers playing fast and loose with the law.”
While Stumpf has — at times — placed blame for the unauthorized account openings on the 5,300 employees who “did not do the right thing” and were terminated, Clinton placed blame on the bank, saying it was “bullying thousands of employees into committing fraud against unsuspecting customers.”
According to the Los Angeles City Attorney, employees were opening and funding accounts without customers’ permission or knowledge in order to “satisfy sales goals and earn financial rewards under the bank’s incentive-compensation program.” The Consumer Financial Protection Bureau has said the bank imposed the goals on its staff because it “sought to distinguish itself in the marketplace as a leader in ‘cross-selling’ banking products and services to its existing customers.”
Clinton did not only defend employees ensnared by the scandal, but also called out the bank for its use of forced arbitration clauses in its customer account agreements. Those agreements bar customers with claims against the bank from taking it to court and instead require that they enter into arbitration, the proceedings of which are often kept private.
“When the scam’s victims, people like you and me who had accounts there, tried to sue, they were shocked to learn there was a provision in the very fine print of their contracts that kept them from going to court to sue the bank for being cheated,” Clinton said. “Instead, they are forced into a closed-door arbitration process without the important protections that you get in a court of law.”
Saying, “you know, who reads all that fine print? I don’t,” Clinton pledged to “reign in that abuse.”
Clinton is not the first to criticize forced arbitration. On Sept. 23, six senators sent Wells Fargo’s CEO a letter with concerns over the clauses.
Clinton’s comments about Wells Fargo came as part of a larger speech in which she called out Donald Trump for the alleged revelations about his taxes in The New York Times and pledged support for regulation of Wall Street — notably, controversial legislation that was passed in the wake of the crash.
“We should build on the Dodd-Frank financial reforms and go even further because Wall Street can never, ever be permitted to threaten Main Street again,” she said.
In a statement, Wells Fargo spokeswoman Jennifer Dunn said, “Our priority is to ensure customers have the products and services they want and value. If any customer has a product or service they don’t want or need, we are working to make things right. In cases where customers have received a product that they did not want or authorize, we are providing free mediation through an impartial third-party. This is fast and free to the customer.”
ABC New’s Liz Kreutz contributed to this report from Toledo, Ohio.
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