Banking

Lawmakers Request Information From Prudential On Latest Wells Fargo Scandal

Rep. Elijah E. Cummings (D-MD), Ranking Member of the House Committee on Oversight and Government Reform, and Sen. Elizabeth Warren (D-MA) sent a letter to the chief executive of Prudential Financial requesting a briefing and documents having to do with press reports that Wells Fargo branch bankers signed up customers for life insurance policies without their knowledge or permission.

In the letter to Prudential Financial, the lawmakers said they have launched inquiries into Wells Fargo’s practices after the fake account scandal came to light. “It appears that the extent of Wells Fargo’s fraudulent business practices is still unknown and the bank preyed on low-income customers through numerous schemes in an effort to line executives’ pockets,” Rep. Cummings and Sen. Warren said in the letter. “We need a complete picture of how far Wells Fargo’s abusive business practices stretch in order to hold executives accountable and prevent such fraud from ever happening again.”

In the letter, Rep. Cummings and Sen. Warren requested information about Prudential insurance policies sold through Wells Fargo branches between Jan. 2013 and the present.

Earlier this week, reports surfaced that California has joined in the lawsuit bandwagon, ordering an investigation into claims retail bankers at Wells Fargo signed customers up for life insurance policies without their consent. Dave Jones, the insurance commissioner for California, said in an interview with Reuters that retail bankers allegedly signed up customers without their knowledge for life insurance from Prudential Financial. Jones said his office will launch an investigation. Prudential Financial, for its part, has reportedly suspended sales of low-cost life insurance policies via Wells Fargo until it can investigate how the insurance product was sold.

Earlier this fall, the Consumer Financial Protection Bureau fined Wells Fargo $185 million, the largest fine levied from the government agency. It also ordered Wells Fargo to refund $5 million in fees that the bank wrongly charged customers. According to an investigation by the CFPB, Wells Fargo employees not only made fake deposit accounts but also submitted 565,443 unauthorized credit card account applications on behalf of unknowing customers. It’s estimated that 14,000 of those accounts accrued $403,145 in fees. Through its own independent investigation, the bank discovered a total of $2.6 million in unauthorized fees. Since then, the company’s CEO, John Stumpf, was forced to step down.

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