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Elizabeth Warren Calls Out Wells Fargo

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Wells Fargo has had a rough couple of years in the public eye, and things don’t seem to be looking up anytime soon, as Elizabeth Warren is again publicly taking them to task. All’s Not Well Last week The New York Times reported that, for the past five years, the banking giant was charging overdraft fees on empty accounts, even after customers thought the accounts were supposedly closed. Wells Fargo has a policy that closed accounts can be reopened if they incur a positive or negative balance, while most banks stop transactions after the accounts have been closed. Many former customers were unaware their account had been reopened until they were sent to Wells Fargo’s collections department. Cover Me The Consumer Financial Protection Bureau was set up in part by Senator Elizabeth Warren in the aftermath of the 2008 financial crisis. The Presidential candidate made her name as a consumer rights advocate, gaining national attention for fighting legislation intended to severely restrict consumers' right to file for bankruptcy. In a letter to Wells Fargo interim chief executive C. Allen Parker, Warren asked how much money the company had collected from the overdraft fees on the supposedly closed accounts. She also asked how widely known the issue was inside the bank, when employees first realized it was a problem and whether it had been described to regulators. Warren has asked for a response by September 3rd. Fargone Wells Fargo has had to pay $15 billion in settlements since the financial crisis for a variety of misdeeds, most notably the creation of 1.4 million “zombie accounts,” or fake accounts created in a customers' names without their permission, hitting customers with unfair mortgage fees and charging people for car insurance they didn't need. After the public outcry, Wells Fargo came to be seen as a symbol of big business run amok, and a target for Warren and other lawmakers looking to hold companies accountable. Former CEO Timothy Sloan stepped down, and the company is still operating under restrictions imposed by the Federal Reserve that bar it from increasing its assets until it improves its oversight practices. This latest scandal is being seen as a sign that Wells Fargo needs to work much harder to regain customers' trust, as Warren called it “still fundamentally broken.” -Michael Tedder Photo by Alex Wroblewski / REUTERS