Republican chairs of the committee and the subcommittee that
would head any congressional investigations into insurance
sales, Senators John Thune and Jerry Moran, along with those
panels' senior Democrats, Senators Bill Nelson and Richard
Blumenthal, wrote to Wells CEO Timothy Sloan with questions
about the scandal as basic as how many customers were affected.
They also requested copies of the bank's internal report that
first identified the problem.
The group sent similar questions to Barry Karfunkel, CEO of
National General Holdings Corporation, which provided the
Last week Moran said he was seeking additional information from
Wells about reports the bank charged 800,000 borrowers for
insurance without their knowledge or consent, but did not give
specifics. Many borrowers already had cheaper insurance with
The letter asks Sloan when the bank, which paid $190 million in
fines and penalties last year over creating phantom bank
accounts, first learned about the insurance sales practices and
also what steps it is taking to prevent a recurrence and to
refund the erroneous charges to customers.
The letters do not mention possible hearings or subpoenas, but
the senators have the authority launch an investigation using
both if they are not satisfied with responses to their letters.
Wells and National have until Aug. 23 to answer the questions.
The Wells letter shows senators are concerned with reports that
thousands of borrowers fell into delinquency because they could
not afford the premiums on top of their monthly payments and the
possibility bank management pushed employees to sign customers
up for insurance with incentives or special benefits.
Incentives are at the heart of last year's scandal, where
employees said they created accounts in customers' names or
pushed account holders to buy additional products they did not
need in order to meet high sales targets.
The senators are also seeking information about possible
commissions paid or revenues shared between Wells and National.
Wells spokeswoman Jennifer Dunn said the bank is committed to
addressing the lawmakers' concerns.
"Customer harm is not acceptable at Wells Fargo," she said. "We
are committed to fixing these mistakes and earning back trust.”
(Reporting by Lisa Lambert; Editing by David Gregorio)
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