Sen. Brown and Cong. Sherman Introduce Legislation to Help Victims of Wells Fargo Fraudulent Account Scheme
Washington, D.C. – Today, Congressman Brad Sherman (D-CA), senior member of the Financial Services Committee and Senator Sherrod Brown (D-OH) Ranking Member on the Senate Banking Committee introduced the Justice for Victims of Fraud Act. Joining Sherman in introducing the House bill are Ranking Member of the House Financial Services Committee Congresswoman Maxine Waters (D-CA) and Ranking Member of the House Judiciary Committee Congressman John Conyers (D-MI).
The legislation would prevent Wells Fargo from using forced arbitration clauses in the fine print of contracts of legitimate accounts to prevent customers from suing over fraudulently opened accounts.
From at least 2011 to 2015 Wells Fargo opened millions of fake accounts (two million bank accounts including 565,000 credit card accounts) in its customers’ names. Now Wells Fargo is preventing these customers from seeking justice in court through mandatory arbitration clauses.
“I want to thank Senate Banking Committee Ranking Member Sherrod Brown for working with me to introduce the Justice for Victims of Fraud Act. This bill will give defrauded Wells Fargo customers the opportunity for their day in court,” said Congressman Sherman. “If customers never authorized the opening of a phony credit card or checking account, there is no reason they should be bound by the arbitration agreement they were forced to sign when they set up a legitimate account.”
“Forced arbitration is shielding Wells Fargo from being held accountable for harming its customers, directly and indirectly,” said Sen. Brown. “Wells Fargo’s customers never agreed to sign away their right to fight back against fraud and deceit. We need to give customers back their ability to seek justice in court so they can be made whole again.”
The bill is cosponsored by U.S. Sens. Patrick Leahy (D-VT), Patty Murray (D-WA), Ron Wyden (D-OR), Richard Durbin (D-IL), Jack Reed (D-RI), Robert Menendez (D-NJ), Bernie Sanders (I-VT), Robert Casey (D-PA), Sheldon Whitehouse (D-RI), Mark Warner (D-VA), Jeff Merkley (D-OR), Al Franken (D-MN), Richard Blumenthal (D-CT), Brian Schatz (D-HI), Mazie Hirono (D-HI), Elizabeth Warren (D-MA), Heidi Heitkamp (D-ND), and Chris Van Hollen (D-MD). The bill is cospondored by U.S. Reps: Maxine Waters (CA-43) , John Conyers (MI-13), Hank Johnson (GA-4), Suzanne Bonamici (OR-1), Steve Cohen (TN-9), Matt Cartwright (PA-17), Raul Grijalva (AZ-3), Colleen Hanabusa (HI-1), Sheila Jackson-Lee (TX-18), Pramila Jayapal (WA-7), Ted Lieu (CA-33), Zoe Lofgren (CA-19), Stephen Lynch (MA-8), Sean Patrick Maloney (NY-18), Eleanor Holmes Norton (DC-AL), Donald Payne Jr. (NJ-10), Jamie Raskin (MD-8), Rep. Jan Schakowsky (IL-9).
The bill has been endorsed by Americans for Financial Reform, Public Citizen, NAACP, American Association for Justice, Allied Progress, Center for Responsible Lending, Economic Policy Institute Policy Center, California Reinvestment Coalition, Consumers for Auto Reliability and Safety, National Consumers League, Public Justice, Franciscan Action Network, Media Voices for Children, Woodstock Institute, Tennessee Citizen Action, National Consumer Law Center (on behalf of its low-income clients), National Association of Consumer Advocates, The Impact Fund, Consumer Watchdog, Alliance for Justice, Workplace Fairness, Homeowners Against Deficient Dwellings, Consumer Action, Consumers Union, and Communications Workers of America (CWA).