On August 31, just hours after Wells Fargo revealed that employees had created at least another 1.4 million unauthorized consumer accounts, a coalition of 33 consumer groups fired off a letter to two congressional banking committees charging the bank may have lied to Congress last year about its fraudulent auto insurance sales.
The coalition, led by Public Citizen & Americans for Financial Reform, suggest top-ranking executives at Wells Fargo may have misled lawmakers during an active investigation last year. During congressional hearings held in September 2016, the executives “may have knowingly and deliberately withheld information” about the bank’s fraudulent auto insurance sales practice, according to the coalition.
The auto loan scandal, broken by the New York Times earlier this month, revealed an internal Wells Fargo report that showed the bank had charged more than 800,000 people for auto insurance they did not need, leading 274,000 customers to become delinquent on their car loans and nearly 25,000 to have their vehicles repossessed. Some of them had their credit damaged, including enlisted military personnel who stand to lose security clearances as a result of damaged credit scores.
The consumer coalition reports that the bank’s own timeline showed it was aware of the 800,000 customers sold unnecessary insurance in July 2016, several months before when the executives testified before the two banking committees in Congress. “Yet Stumpf’s testimony made no mention of this misconduct, even when he was asked directly whether fraudulent activity might exist in other business lines,” the coalition pointed out.