Teaneck—New Jersey’s senior senator visited Cedar Lane’s pedestrian plaza last Friday to discuss the Wells Fargo community banking scandal with reporters. Sen. Bob Menendez (D-NJ) called the press conference, held across from the Wells Fargo branch at 465 Cedar Lane, after the bank was hit with a $185 million fine by the Consumer Finance Protection Bureau for personnel who created 1.5 million fake bank accounts and 565,000 fake credit card accounts, using real customer information. The customers were then left to pay overdraft fees on their own secret accounts (where their real money had been moved) or fees on credit accounts they hadn’t opened and, in many cases, did not even know they had. The identity thefts have left many customers’ credit ratings compromised as well, as credit bureaus reported out their accrued late fees or failure-to-pay notices on accounts opened in their names.
Sen. Menendez said that in the wake of the fraud, his role as a senior member on the Senate’s Banking Committee was to investigate and work to prevent future abuses from happening. “The bank that literally promises in its promotional literature to its customers that ‘it will never put the stagecoach ahead of its horses,’ in fact, sat back while the stagecoach rolled over two million customers,” he said. As a case in point, Sen. Menendez invited Rumson resident Linda Edwards to the podium to share her experience; Edwards told the assembled that her then-18-year-old daughter received collection notices and harassing phone calls regarding debts on a credit card, even though her daughter had never opened a credit card in her name. Before she was exonerated, her credit rating was destroyed and it’s not clear if the credit rating can be cleared, her mother said.
According to many reports, the sham accounts were allegedly created because of aggressive sales goals and incentives for staff to open new customer accounts. Some 5,300 staff members of Wells Fargo’s consumer banking division were fired over the past five years as a result of these abuses, but Menendez alleged that more senior-level stuff must have been involved for the fake accounts to have been created by so many people on such a large scale. “I want to know how high up this goes at the bank. The response so far is that it was the employees. But how can this happen without senior staff knowing about it?” he asked.
“This is truly unconscionable. They fired 5,000+ workers and what they said was ‘They all did it on their own’?” he asked.
On hand at the Cedar Lane pedestrian shopping plaza, between Rocklin’s Newsstand and Dovid’s Fish Market, were news reporters, curious balabustas going about their Friday-morning pre-Shabbat shopping (present company included), and Cedar Market merchants who popped their heads out of their shops to check out the hubbub of television cameras, news vans and reporters. One merchant wanted to know whether any of the violations had occurred in the Wells Fargo community banking branch across the street. Sen. Menendez told The Jewish Link that this was not the case; the Cedar Lane location was chosen simply because it was outside a bank branch with the appropriate space for a news conference, but he added as part of his remarks that 2,673 customers in New Jersey had been affected, and they were set to be refunded approximately $70,000.
With the scale of the thefts much greater, however, this return of funds seemed like a drop in the bucket, especially considering that thousands of residents may have had their credit destroyed due to these actions. Sen. Menendez added that the ripple effects of these accounts being opened might not yet be fully understood, and indicated he thought that the $185 million fine may not be sufficient to prevent future abuse since the bank maintains $2 trillion in assets. Regardless, he added, the scope of the scandal is staggering and he shared that he intended to bring up his concerns with Wells Fargo CEO John Stumpf, whom he was set to interview at the Senate Banking Committee hearing on Tuesday, September 20.
By Elizabeth Kratz
