For years, Republicans have criticized Elizabeth Warren for creating a Banking Agency to keep watch over the banks. But Wells Fargo just made the case for the Massachusetts senator’s regulatory agency.
On Thursday, the Consumer Financial Protection Bureau (CFPB) ― the watchdog group proposed by Sen. Elizabeth Warren (D. Mass.) in the aftermath of the financial crisis ― exposed a massive Wells Fargo scam, several news outlets reported.
The revelation proves, once again, that no scam is beneath America’s financial institutions. And no institution is above being watched by a federal agency.
Wells Fargo will pay a total of $185 million as a penalty for perpetrating a huge scam on its customers, which it had been going on for years. According to CFPB, the bank made $86.1 billion in revenue and $22.9 billion in profit last year alone.
The fine the CFPB levied in response to the fraud is the largest the agency has ever imposed. The remaining millions will go to the Office of the Comptroller of the Currency and the city and county of Los Angeles, which helped to uncover the scam.
The bank also must refund all fees to customers, including overdraft charges and penalties for falling below minimum balances on sham accounts. Unfortunately, the bank won’t feel much pain from this penalty. The fine is peanuts to an institution that makes billions of dollars. In fact, “Wells Fargo stock price hardly changed from when the news of its wrongdoing broke,” Huffington Post reported.
This is not the first time the agency has uncovered extensive banking fraud. Last year, the CFPB fined Citibank for illegal credit card practices after the bank was found to be charging customers for benefits they didn’t receive. It’s uncovered student loan fraud and financial products that take advantage of the elderly, and is looking to crack down on the payday loan industry.
Despite the positive work CFPB does on behalf of consumers, Republican presidential nominee Donald Trump and his running mate, Indiana Gov. Mike Pence have said they would like to see the agency abolished as part of their intended dismantling of the 2010 Dodd-Frank legislation passed to prevent another economic meltdown.
H/T: Huffington Post.