published on September 16, 2016 - 9:35 AM
Written by The Business Journal Staff

WASHINGTON (AP) — A House panel is starting an investigation of Wells Fargo amid a growing scandal over its opening of millions of unauthorized accounts.


The House Financial Services Committee on Friday announced an investigation of the allegedly illegal activity by Wells Fargo employees to meet aggressive sales goals as well as the role of federal regulators in the debacle.

California and U.S. regulators fined San Francisco-based Wells Fargo & Co. a combined $185 million last Thursday. The bank says it has refunded to customers $2.6 million in fees charged for products that were sold without authorization.

The committee says it will summon Wells Fargo CEO John Stumpf to testify at a hearing this month. Stumpf and several regulators are appearing before the Senate Banking Committee at a separate hearing on Tuesday.

The House panel also is requesting internal documents from Wells Fargo and the regulators related to the timing and discovery of the sales practices.

The consumer banking giant, which is the biggest U.S. mortgage lender, has fired about 5,300 employees over the sales practices.

Wells Fargo sales employees opened more than 2 million bank and credit card accounts that may have not been authorized by customers, according to the regulators. Money in customers’ accounts was said to have been transferred to these new accounts without their authorization. Debit cards were issued and activated, as well as PINs created, without telling customers.

In some cases, bank employees even created fake email addresses to sign up customers for online banking services, the regulators said.

Wells Fargo said in a statement last week: “We regret and take responsibility for any instances where customers may have received a product that they did not request.”

In a letter Thursday to Stumpf, several Democratic members of the Senate Banking Committee asked whether Wells Fargo’s board will exercise its power to take back compensation paid to senior executives responsible for the sales program.

A top executive, Carrie Tolstedt, who ran the consumer banking division, in July announced her retirement from the bank this year. Tolstedt, 56, is expected to leave with as much as $125 million in salary, stock options and other compensation.


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