[Congressional Record (Bound Edition), Volume 163 (2017), Part 9]
[Senate]
[Pages 12406-12407]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   WELLS FARGO AND FORCED ARBITRATION

  Mr. BROWN. Mr. President, a number of Wall Street banks, car title 
lenders, big corporations, and payday loan sharks have two things in 
common: They have a record of ripping off consumers, and they have 
armies of expensive lawyers and lobbyists in Washington, in Columbus, 
and in State capitals all over this country who protect them from 
facing the consequences.
  That is why it is so important that ordinary American consumers have 
their own cop on the beat--the Consumer Financial Protection Bureau. 
The recent abuses by Wells Fargo are the latest proof of how necessary 
the Consumer Financial Protection Bureau's work is.
  Less than a year ago, we learned that Wells Fargo secretly opened 
millions of phony bank and credit card accounts without customers' 
permission. The CEO of Wells Fargo had to resign as a result. This was 
an outrageous abuse of American consumers. The sheer size and scope of 
this scam are breathtaking. In total, Wells Fargo may have opened as 
many as 3.5 million unauthorized accounts--meaning, it opened these 
accounts without the accountholders even necessarily knowing that they 
did it, without permission--costing customers some $2.5 million in 
fees.

[[Page 12407]]

  The abuses are bad enough. To make matters worse, Wells Fargo tried 
to keep this scandal hidden from the public, and it used something 
called the ``forced arbitration clauses,'' which are buried in the fine 
print of customers' contracts, to deny them their day in court. There 
is hardly anybody in this country who has not confronted small print in 
a contract when signing that contract, especially with a financial 
institution. Customers first sued over these fake accounts back in 
2013, but Wells Fargo then forced them into secret arbitration 
proceedings, keeping this scam under wraps and blocking consumers from 
obtaining any relief.
  Last year, the Consumer Financial Protection Bureau and other 
watchdogs blew the lid off of this scandal. Customers sued once again, 
and, once again, the bank tried to block them from getting relief in 
court. This time, because of the Consumer Financial Protection Bureau, 
the LA Times, and others who shone a light on the scandal and on all of 
the bad press that went with it, Wells Fargo relented. So, after two 
congressional hearings and a flood of bad headlines, Wells Fargo is 
cutting a deal in its phony account scandal. Yet now we have learned 
that this is not the only scam that one of America's largest banks has 
pulled.
  Just last week, we learned that the bank forced unwanted insurance on 
800,000 auto loan borrowers, potentially pushing tens of thousands into 
default and repossession, and it is still using these forced 
arbitration clauses in its contracts in order to cheat future 
consumers, including in the contracts in this auto loan scam.
  The only thing more outrageous than the fact that Wells Fargo 
continues to cheat its customers is the fact that Members of Congress--
a lot of Members of Congress in this body and down the hall--are trying 
to make it even harder for those customers to seek justice in their 
overturning the arbitration rule. They think that forced arbitration 
and the fine print, which most people do not read and most people do 
not understand if they do read it, is legitimate. No wonder so many 
hard-working Americans believe that the system is rigged against them 
in Wall Street's favor.
  These scams have caused real damage for hundreds of thousands of 
Americans as 275,000 Wells Fargo customers have been forced into 
delinquency by being charged for unnecessary insurance, and 20,000 
vehicles have been unfairly repossessed because of this bank's 
behavior.
  Wells Fargo is not alone. Santander has used forced arbitration 
clauses against servicemembers. It is a Spanish company that does 
business in the United States and uses forced arbitration clauses 
against American servicemembers--again, for illegal car repossessions. 
In 2015, Santander used forced arbitration to block an Army National 
Guard sergeant from seeking justice after the bank illegally 
repossessed his car while he was serving our country overseas.
  I see that kind of thing happening at Wright-Patterson Air Force Base 
in Dayton. Air Force men and women are not always making big salaries, 
to put it mildly, as they are serving their country. They do not make a 
lot of money, and a lot of these young families struggle. Yet 
predators--companies like Wells Fargo and payday lenders--continue to 
prey on them. The Consumer Financial Protection Bureau stands with 
them. The CFPB is looking out for folks like the Army National Guard 
sergeant, like those at the Wright-Patterson Air Force Base, and like 
those at the Air Force bases in Springfield and Mansfield and Toledo 
and Youngstown.
  Yet, with all of this happening, some Members of Congress, again, are 
doing the bidding of Wall Street lobbyists. The Bureau just finalized a 
new rule that limits the arbitration clauses that allow big 
corporations to get away with ripping off servicemembers, students, and 
other hard-working Americans, but the ink is barely dry on this new 
consumer protection, and big banks and their allies in Congress--and 
God knows they have a lot of allies in Congress and allies in the 
administration--are already trying to overturn this rule.
  Last week, Republicans in the House voted to overturn this rule that 
ensures that all Ohioans who have been ripped off by banks or payday 
lenders are able to have their day in court. Despite promising during 
his campaign to look out for the little guy, President Trump's Acting 
Comptroller of the Currency, who is also--alas--a former Wells Fargo 
lawyer, is trying to get the Consumer Financial Protection Bureau to 
back off that rule.
  It is unconscionable that Washington politicians are undermining the 
rights of consumers to have their day in court when they are cheated by 
banks and payday lenders. Folks in Washington who want to dismantle the 
Consumer Financial Protection Bureau and gut its rules seem to have 
collective amnesia about the devastation that Wall Street greed has 
wreaked on communities across the country, but most Ohioans do not have 
that luxury. They are still recovering.
  I and my wife, Connie, live in the city of Cleveland, with the ZIP 
Code 44105. At this time 10 years ago, during the first half of 2007, 
there were more foreclosures in that ZIP Code than in any ZIP Code in 
the United States of America. So I have seen the aftermath. I have seen 
what has happened with Wall Street greed and the kind of collective 
amnesia in this body whenever Wall Street wants something, whenever the 
payday lenders want something, whenever the big banks want something, 
and Congress rushes in to help them and to respond to their lobbyists 
and their lawyers who lobby this body.
  It is pretty simple. Gutting the Consumer Financial Protection 
Bureau's arbitration rule means banks get away with cheating their 
customers.
  So I ask Senators in this body to ask themselves: Whose side are you 
on? Are you on the side of the payday lenders and Wells Fargo when they 
defraud the public or are you on the side of service men and women and 
the side of people who have lost their cars, which were repossessed 
because of the unilateral actions by this bank?
  Those are the same big banks that preyed on working families before 
the crisis wrecked the economy and handed taxpayers the bill. Is that 
whose side we are on or are we on the side of consumers?
  Mr. President, I yield the floor.

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