As earlier expected, Democratic candidate for next month’s presidential election in the United States, Hillary Clinton, has hit out at Wells Fargo over an ongoing scandal at the bank, promising action against it for “egregious corporate behavior.”
Clinton made this disclosure while speaking at an event in Toledo, Ohio on Monday. She expressed shock that a bank of Wells Fargo’s status could be found committing fraud against millions of its unsuspecting customers.
The bank has come under intense scrutiny and criticism after regulators accused its employees few weeks ago of opening accounts without permission or knowledge of its customers. As many as two million accounts were believed to have been opened in this manner over a period of about five years, starting from 2011.
Addressing the crowd in an area that has seen many manufacturing jobs lost in recent years, the Democratic presidential candidate said she would like to get a message across to all companies scamming their customers, exploiting employees or ripping off tax payers that they would be held accountable for their actions.
“To understand why this is so important, consider the recent examples we’ve seen of egregious corporate behavior,” Clinton said, in reference to Wells Fargo.
She said she found it greatly shocking that years after “a cowboy culture on Wall Street” led to a financial crisis powerful bankers are still “playing fast and loose” with the law.
Wells Fargo Chief Executive John Stumpf has been seriously criticized for the scandal by both Democrats and Republicans in House and Senate hearings. He has, however, maintained occasionally that the blame for the unauthorized openings of accounts should be on the bank’s employees who failed to “do the right thing” and were dismissed as a result.
Clinton disagreed with Stumpf’s claim saying the Wells Fargo employees were bullied into committing the fraud against the bank’s customers.
The bank employees were opening and funding unauthorized accounts so as to meet sales targets and be rewarded under the institution’s “incentive-compensation program,” according to the Los Angeles City Attorney. The Consumer Financial Protection Bureau also stated that the sales goals were imposed on staff by the bank, which sought to distinguish itself as a cross-selling leader in the market.
The Democratic presidential candidate promised to work with customers to get around mandatory arbitration clauses inserted in their account agreements. These clauses make it practically impossible for customers to take legal action against Wells Fargo if they feel cheated. The only resort would be to a private, closed-door arbitration process. Many customers are trapped by these clauses because not everyone has the time to through the fine print before opening an account.
Clinton plans to request the Congress to grant certain agencies, including the Department of Labor and Federal Trade Commission, power to prevent forced arbitration clauses from being inserted in agreements.
A $190 million settlement was reached between Wells Fargo and regulators in September. The bank’s customers, however, were not able to sue the institution in court because of the agreements they had with it which make that impossible.
Clinton’s campaign revealed a plan that would help consumers file lawsuits against companies instead of settling for private arbitrations.