Today, the Center for Responsible Lending (CRL) lauded a group of U.S. Senate Banking Committee Democrats for calling on Wells Fargo Chief Executive Timothy Sloan to explain the recent boost in revenue from overdraft charges and whether the increase is connected to the bank’s practice of opening fraudulent accounts.
In a letter, led by U.S. Senator Sherrod Brown (D-Ohio), ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, members expressed concern with reports the bank’s income from overdraft charges grew by more than seven percent between July and September 2016--five times faster than the rate of Wells main U.S. competitors. Additional members who called on Wells Fargo for an explanation included U.S. Senators Elizabeth Warren (D-Mass.), Brian Schatz (D-Hawaii), Robert Menendez (D-N.J.), Jack Reed (D-R.I.), Mark Warner (D-Va.), and Chris Van Hollen (D-Md.).
"Unfair bank penalty fees cost consumers billions every year, and too often they push families out of the banking system altogether,” said CRL Policy Counsel Courtney Robinson. "Wells Fargo is not only notorious for deliberately opening fraudulent accounts or manipulating transactions in order to charge excessive overdraft fees, but Wells is also well known to deceive their customers into forced arbitration. We commend Senators Brown, Warren, Schatz, Menendez, Reed, Warner, and Van Hollen for putting the interests of consumers first and working toward eliminating abusive financial practices."
The lucrative revenue from overdraft fees keeps banks from offering lower-cost, responsible banking and credit products for low-income account holders and other vulnerable populations.
CRL has consistently fought against abusive financial practices and products that hurt consumers across the country—such as payday and high cost installment loans, debt collection, overdraft fees, unfair prepaid card penalties, and student loan debt. In December, CRL came out in support of Justice for Victims of Fraud Act of 2016, a bill to give Wells Fargo customers who were victims of a fraudulent account opening scheme their day in court.
For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Ricardo Quinto at firstname.lastname@example.org.