Fraud

This is Why We Need a Consumer Protection Agency

Wells Fargo announced yesterday that is has fired over 5,000 employees for creating fake bank and credit card accounts in customers' names without their consent and then charging fees for those accounts. In total, these employees created over 2 million fake accounts generating massive amounts of money for themselves and the company.

After being tipped off by the Los Angeles Times, the Consumer Financial Protection Bureau conducted their own investigation and has now fined the bank nearly $200 million.

"Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses," Richard Cordray, director of the Consumer Financial Protection Bureau, said in a statement. [...]

Wells Fargo is being slapped with the largest penalty since the CFPB was founded in 2011. The bank agreed to pay $185 million in fines, along with $5 million to refund customers.

Republicans have fought tooth and nail against the Consumer Protection Bureau since before it was even began protecting consumers. You may recall that Republicans in Congress blocked the confirmation of Elizabeth Warren as the agency's director for an entire year, forcing President Obama to make a recess appointment of Richard Cordray.

Republicans in Congress have continued to fight against the agency, inserting language into various unrelated bills that would defang the agency.

The Consumer Protection Bureau was created under the Dodd–Frank Wall Street Reform and Consumer Protection Act, which even some liberals have criticized or called for its dismantling.

  • muselet

    Charlie Pierce:

    Apparently, it is the position of WF that 5,300 of its employees all had the same great idea for massive consumer fraud largely independent of one another. The problem is, even if this were true, and it’s not entirely implausible that some variation of the argument might be, this says something truly awful about the company’s upper management and the culture that has developed at all levels of the institution. A den of thieves, with elevators and Christmas bonuses. The truest thing that Bernie Sanders said in his stump speech always was that the basic business plan of this industry is fraud. It also was one of the few examples of understatement he allowed himself.

    Also, Ted Cruz is gearing up to lead the charge to dismantle the Consumer Financial Protection Bureau because reasons. Besides, he wants to run for President in 2020 and anticipates Republican voters will be even more ready to vote against their economic interests four years from now.

    –alopecia

  • Aynwrong

    Badgerite said it all in comment the below. I just want to add some kudos to the L.A. Times for their role in this. This is probably one of those quotes that’s too good to be true but it describes the need of a free, honest and aggressive press succinctly:

    “The job of the newspaper is to comfort the afflicted and afflict the comfortable.”

    Amen.

  • Badgerite

    Anyone who tries to pretend that there is no difference between the GOP and the Democratic party, behold.
    The Consumer Protection Bureau would simply not exist were it up to the GOP. It exists only because the Democratic party passed legislation over Republican opposition, to create it and a sitting Democratic President signed it into law. And ever since, the GOP has been trying to kill it. Elections matter.
    This one in particular matters.

    • Aynwrong

      Exactly right and well said.